Would you sell if mortgage owe is higher than house value?

jr_morris

Hi all,

Hope you're all well. Me and my husband are first time sellers and could do with some advice and opinions.

Basically my husband and his sister brought a flat together about 3yrs ago and about a year ago his sister decided she wanted her own place so left my husband and I with the flat and mortgage to pay.

We both no longer live in the flat because it is very far from where we work and was costing us a lot of money on travelling cost etc.

As we don't live there, we really want to sell it so can use the money we would normally pay towards the mortgage to save up for our own home. We are really trying to get rid of it as we feel its just a burden we've both been left with and have no choice but to deal with it.

The problem we have is that the outstanding mortgage is around £81,500 and the property is only valued at around £78,000 although the estate agent said they will give it a guide price of £75,000 - £85,000. The agency and legal fees come to around £2450 + VAT and any disburstments.

We really want to know what your advice would be, would you sell the property even if you make a loss just so you don't have the burden of paying mortgage on a property which is just left empty?

The property has been on the market for well over a year now and we've not had many viewings so we're in the process of changing agency. Another problem is that there's a property in the same block of flats which has a new kitchen and bathroom refitted and is selling for £80,000. Thier apartment is in a better condition that ours (or shall I say the condition in which my husband's sister left it in).

Sorry if this seems like a rant but i've been left to deal with this and it is completley stressing me out. Your help/advice is very much appreciated.

Many thanks,

JR

Cannon_Fodder

You would need your lender to agree to selling for less than outstanding mortgage amount. They'd probably want you to fund the difference, immediately.

If the EA has put a guide of £75k-£85k, plan for £75k. Any more is a bonus.

A £5k-ish loss might sound like a lot, but how much a year are you spending on the mortgage? And how many years might this fester.

Your husband should give his sister a hint that there will be a bill for half the shortfall coming her way.

jr_morris

Thanks for your reply.

I know that we will have to fund the difference to make up the whole repayment amount on the mortgage and the £5k difference is less than what we pay towards the mortgage in a year so i guess it is better in the long run to make a loss than to keep paying for a place which is empty.

I think there wont be a chance of his sister paying us anything, she's expecting us to give her money back because she 'gave' the flat to us!! For the 3yrs she owned the place with my husband, my husband have spent less that 1 year living there due to travelling with work however he never failed to pay his half towards the mortgage and bills and yet when we just left, she expected us to give her money as 'her share'...i just can't seem to get my head round her thinking...

Thanks again for your advice

Cannon_Fodder

If she never got her name taken off the mortgage, she's still liable...

jr_morris

The mortgage is still in joint names with her and my husband and also the house deeds are also in their joint names but we pay for everything...

Mum_of_3_3

You may be looking at more of a loss than you think. If your EA is putting it on with a guide price of £75k-£85k then I would expect to pay £72 or £70k for it.

Take a look at RightMove to see how many flats are for sale in your area, how they compare to yours and then judge the opening price by that. I would also look at how much comparable flats in your area have sold for and be prepared to lower it to near a similar amount.

Good luck though.

M_o_3

PS As far as the sister goes I would give her some if you manage to end up with money at the end, if you don't then tell her to get stuffed!

jmt

You mention that the flat has been on the market for over a year. Does your current EA use Rightmove to advertise? I have noticed that some of the EA in my area that never used Rightmove in the past are now using it. I know it depends on area, but I now rarely use any other website to look for property.

jr_morris

I've just checked and it is on rightmove and also findaproperty...

Mum_of_3: the agent said that the guide price they've given is to attract more people through the door and that we can always say no to what we are offered but we really won't want to go any lower that £75,000 because then we'll probably have to get a loan to cover the difference to pay the mortgage company

Mum_of_3_3

jr_morris wrote: »

I've just checked and it is on rightmove and also findaproperty...

Mum_of_3: the agent said that the guide price they've given is to attract more people through the door and that we can always say no to what we are offered but we really won't want to go any lower that £75,000 because then we'll probably have to get a loan to cover the difference to pay the mortgage company

If I see a guide price then I'll offer under the bottom price & not near the top price. IMHO guide prices are silly unless the house is in an auction. Why don't you put it on at £80k - the midway price.

I really sympathise with you it's a horrid situation to be in. Can you not have a word with your sister-in-law and tell her that as she is ever so keen to get half of any money left over, she should also agree to go halves on the shortfall

As far as the kitchen goes can change the kitchen doors and give everywhere a lick of paint just to spruce it up a bit? Also if you are going with a new agent, make sure they take good photos that show off the flat's best assets.

M_o_3

jr_morris

Thanks for your advice. We're going to get someone to give us a quote of getting bits and bobs done like changing kitchen cupboard doors and will probably do some painting at the weekend.

I don't know why but the agent insists on the guide price because i did ask them to put the property on for around £83,000 but they said "we would only be prepared to market the flat at what we valued it £75,000 - £85,000." To be honest, i'm not sure what a guide price is and why they use a guide price rather than an acutal for sale price but she explained that it's to attract people through the door...

JQ.

I wonder if they are trying to placate you, ie. They think they should be marketing it at £75,000 but because you're aspirations were so much higher they just gace you the range of values to make sure they get the instruction.

As stated above, if I saw a house on the market at £75-£85k I would not be offering any more than £75k - seems pointless having the range.