Paying Off 2nd Lien

babbles

LoanSafe Member
Feb 11, 2009
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I am trying to sell my home for 145k and my 1st is 118k and 2nd 11k. I was thinking of paying off the 2nd or half maybe. Do you think I would be able to recoup some of those monies lets say if the home sold @ 140k with 6% sales commission and offer of 1k in closing costs? Newly installed roof in Aug 2015 if that will get me anything extra. Thanks for any advice or suggestion
 

Moe Bedard

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Hello babbles,

You probably do not have to pay down the 2nd mortgage.

$145,000-118,000(1st)-11,000(2nd) = $16,000 in equity

If you sell at $145,000 at 6% which equates to $8700+1,000 = $9,700 in costs to sell.

$145,000-118,000(1st)-11,000(2nd) = $16,000 in equity - $9700 to sell = $6,300 left over
 

babbles

LoanSafe Member
Feb 11, 2009
97
3
8
Hello babbles,

You probably do not have to pay down the 2nd mortgage.

$145,000-118,000(1st)-11,000(2nd) = $16,000 in equity

If you sell at $145,000 at 6% which equates to $8700+1,000 = $9,700 in costs to sell.

$145,000-118,000(1st)-11,000(2nd) = $16,000 in equity - $9700 to sell = $6,300 left over

Thanks Mo! What about Georgia closing costs? Where do they figure in? Is the 1k some of the closing costs? I've bought homes before but never sold one. I have a new roof just put on a month or two ago. Would I gain anything for that? I take it the appraisal would be what the local area can support regardless of the new roof? Is that correct? I appreciate your reply!!
 

Moe Bedard

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You are very welcome!

Most states are similar to what you pay in closing costs. They average anywhere from .75%-1% of the sales price for the seller. My understanding is that Georgia is on the low end about .75% which $145,00-x.75%= $1087.50 in approximate closing costs.

Unfortunately, a home is not worth more with a new roof. An appraiser can only give you value on year built, bedrooms, baths, home size, pool, lot size and remodels like new kitchens etc. But a new roof is definitely an added selling point for any smart buyer given the fact they won't have to replace the roof for many years to come.

Good luck with the sale and please let us know how everything turns out for you.
 

babbles

LoanSafe Member
Feb 11, 2009
97
3
8
You are very welcome!

Most states are similar to what you pay in closing costs. They average anywhere from .75%-1% of the sales price for the seller. My understanding is that Georgia is on the low end about .75% which $145,00-x.75%= $1087.50 in approximate closing costs.

Unfortunately, a home is not worth more with a new roof. An appraiser can only give you value on year built, bedrooms, baths, home size, pool, lot size and remodels like new kitchens etc. But a new roof is definitely an added selling point for any smart buyer given the fact they won't have to replace the roof for many years to come.

Good luck with the sale and please let us know how everything turns out for you.
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,840
466
1,000
48
Southern California
www.loansafe.org
My understanding is that they are only good for 60-120 days. Those termites work quick and can eat a lot of wood over a few months time ;)
 

babbles

LoanSafe Member
Feb 11, 2009
97
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8
My understanding is that they are only good for 60-120 days. Those termites work quick and can eat a lot of wood over a few months time ;)

Hi Mo,

I have a potential buyer whose asking for a carpet allowance. The carpet is 2 years old and I had it professionally cleaned and the home painted neutral throughout. I'm thinking they may not like the dark color. So how would an allowance work?? With my asking price of 145k, and lets say they want 5k for allowance. What if their bank's appraisal comes back much lower than what I'm asking?? So now they would want the price lowered, 5k allowance, and costs for whatever the home inspection results are, and maybe closing costs. And I'm thinking before I do anything, I would want to know if they are going to make a firm offer. 2 weeks ago a couple came in and I happened to be there and they asked could I install a microwave oven over the the stove and replace the small kitchen floor. I did those things and they haven't made an offer as of yet. I didn't want to keep sinking money into the home at a potential buyer's request only to have them not submit an offer.
 
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Moe Bedard

Call 1-800-779-4547
Staff member
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Aug 10, 2007
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Southern California
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Hi Babbles,

I would maybe say no because you have some good activity already on the home which shows there is buyer demand or you could give them $2500. If the bank's appraisal comes in lower, you would have to lower the price or see a new buyer.
 

babbles

LoanSafe Member
Feb 11, 2009
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What are the advantages and disadvantages of rent to own my home? Is it a viable option if I'm not able to hold out for months for it to sell with limited offers while keeping my head above water, meaning to income coming in?
 

Moe Bedard

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Legally, you cannot rent to own your home because you do not really own it outright. You can do what is called a wrap around loan for a new buyer, but if the bank finds out they will call the loan due and start foreclosure proceedings.

You can do what is called a lease option. You do this by setting a selling price, small down payment (nonrefundable) monthly payment for a set amount of time (1-5 years) that a lessor and buyer agrees to. This buyer/lessor then has the amount of time of the lease to make you payments and then secure their own financing to purchase your home at the agreed price.
 

babbles

LoanSafe Member
Feb 11, 2009
97
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8
Hello,
Just a quick update. I did close on one of my homes today. This home was about 60k underwater in 2009 and because I choose to stick it out and make the payments on time, I ended up with 11k in equity. Of course I had to give some to the realtor and for my next home on the other side of town in a great location, sure would like to sell it without a realtor! That one was about 116k under in about 2009 and it's about even now or maybe a few thousands in equity. Is it a large feat to sell a home on your own?
 

Moe Bedard

Call 1-800-779-4547
Staff member
Loan Safe Mortgage
Aug 10, 2007
26,840
466
1,000
48
Southern California
www.loansafe.org
Hello,

Congratulations on a job well done and having a lot of patience.

It is not very difficult to sell your home on your own, but there are a lot of legalities you will need to understand if you do. It is all about disclosure, meaning disclose and and all known defects and selling the property as is with no implied warranties. You can learn how to do most of it online.

Here is a couple good articles on how to do this:

http://www.wsj.com/articles/SB126280047965118177

http://www.wikihow.com/Sell-Your-Own-House