I have a property that I owned by myself, when I got married I started renting it to a family member but it has now been vacant since April and the mortgage on it adjusted. I cant refi it because of our current financial position and am out of money to keep up the monthly payment.

I owe about 50k less than the market value on it... and I have had it listed for about a month with ZERO action. I am not yet delinquent on my mortgage payment and a lawyer friend said to call and ask about a Deed In Lieu of foreclosure option since my husband and I have made the decision to just let the house go and lose it in Foreclosure.

Does anyone know what the long term effects of a DIL is on my credit. We will be ok with his credit for auto purchases and our current home is just in his name ... but I want to know what I am looking at. I have always been in a financial position to help myself .. so this is all new to me...

advice???

Disclaimer: I am NOT a Realtor

However it seems to me that if you owe 50k less than market value, you have some serious room to play with the asking price and generate yourself some action before you consider a deed in lieu (Which basically is when you deed the property back to the lender prior to foreclosure) - If you are able to sell the property and avoid foreclosure, that is ideal is it not? Also if you have a solid offer on the property, there are many financial institutions that will entertain bridge financing options until closing.

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Also, with the property priced less say 20-35k lower than market value, you will likely get a lot more action, perhaps (No promises here) multiple offers in which case they make bid up the price in order to win the property - Hey you Realtors am I off base here?

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Want to save up to 50% off Real estate webmasters product websites & common upgrades? Check out my latest blog post regarding our end of the year sale.

The issue is there is ALOT of new construction in the area.. with the same value. We have the property listed 10 k less than market AND are offering a 10k seller credit toward closing costs.. and still NOTHING!

Then follow Morgan's advice and bottom out your price. I'm a Realtor and an investor. If you are not getting traffic then you are probably fooling yourself about your current price. Not to be rude, everyone thinks their house is worth a lot of money. Get another opinion of value. How are you marketing your property?

As far as deed-in-lieu, you can try that route if you have not yet missed a payment. If you have missed payments, then you can look at a short sale. Finally, there is foreclosure. All three of these are lousy options. The last two will destroy your credit for at least seven years. I personally have not seen the impact of a deed-in-lieu on a credit report, but I expect it will be treated negatively by any future lender.

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R,
David Phillips
A Marietta Real Estate Agent, 678-521-4680
The Georgia Mortgage Broker, 678-370-0190

Also consider posting your location (city, state) in a reply. There is probably a member on this forum that works in your area. They might be able to provide you with options particular to your region.

Best of luck!

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R,
David Phillips
A Marietta Real Estate Agent, 678-521-4680
The Georgia Mortgage Broker, 678-370-0190

Property was appraised to establish value and we are 10k below that... plus the 10k seller credit .

Property is in Ventura County CA

Nonetheless, lower the price. If you have 50K between the loan and the market value lower it 10K every 2 weeks until you reach break even! This assumes it is being marketed correctly. Is it listed?

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Dan Connolly
Atlanta Georgia
Atlanta Georgia Real Estate
Atlanta Foreclosures
Search for Atlanta Real Estate

Yes I have it listed with a ReMax realtor. It has had an open house and was on "caravan" today.

I just had a buddy who was trying to sell his home for 4 months with no success and not making his payment. He was going to let his house go but we are thinking that the market may be better in the spring. So he had his mortgage adjusted to include payments missed (slightly higher payment)and got a renter to hold off 6 months. Its worth a shot if you see a light at the end of the tunnel in the next year.

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Ryan Loofboro
Friendswood TX Real Estate
League City TX Real Estate
Clear Lake Texas Real Estate