How to Get Great Results When Selling a House With No Equity in Santa Cruz

Selling a house can very often be a lengthy and complicated affair. And it only gets more difficult if you owe more on the mortgage than the current value of the house, especially when you have no equity at all. With no equity, the process can be delayed even further and become more overwhelming. But you do have options in such a selling situation. To help you out, here’s a brief guide on how to get great results when selling a house with no equity in Santa Cruz.

Brief Definition of Equity

The concept of equity is pretty simple really. It is the amount you have left after subtracting the unpaid mortgage balance from the current market value. As you pay off your mortgage, the equity, naturally, increases. It also rises with appreciation.

Typically, homeowners sell when they have some equity in their home. But even with no equity, you still have options for selling your house in Santa Cruz.

Options for Selling a House with no Equity in Santa Cruz

So let’s take a look at some of the best options for selling a house with little to no equity . . . 

A Short Sale

A short sale (sometimes known as a “compromise sale”) is probably the most commonly used method to sell a home with no equity

For a short sale to occur, the lender and owner must agree to sell the house in order to avoid foreclosure. And this typically means that the lender must agree in writing to take a loss on the sale. Ultimately, it’s better than a foreclosure, which can be very damaging to your credit.

Be aware, though, that a short sale can be complicated. First, you’ll have to find a buyer patient enough to wait while your lender whether to accept her offer. In addition, most sellers who go the short sale route should work closely with an agent with experience in short sales. To find out more about short sales, you can consult a Santa Cruz agent at 831-588-2334.

Working With an Agent

Another viable option (and perhaps a better) one is to work with a Santa Cruz agent toward a more traditional sale when selling a house with no equity. This is often the first choice (and best) for homeowners.

There will, however, be fees associated with working with an agent. An agent’s commission is usually right around 6% of the purchase price. But there will be other costs involved, and these can make the total costs closer to 8% to 10%.

You can, though, try to negotiate the agent’s commission. And just a percentage point or two shaved off can make a big difference when you’re selling with little to equity.

Doing a For Sale by Owner (FSBO)

You can also go the for sale by owner (FSBO) route when selling with no equity. Although it’s generally recommended that sellers work with an agent, if you are savvy enough you can do it on your own. While there is some risk involved, an FSBO deal is a good way to reduce costs and come out with more money in your pocket.

You can avoid paying an agent’s commission, but you also need to be aware of the risks. You also need to have a thorough understanding of the sales process, especially with respect to local laws and requirements. One area where FSBO sellers often make a misstep is in pricing. And then you’ll also have to do all the marketing on your own, and you may have to pay the buyer’s agent’s commission of 3%. 

So proceed with caution here. Consult a Santa Cruz agent at 831-588-2334 to determine whether this option is right for you.

Selling to an Investor

A final option that can provide great results for those selling a house with no equity in Santa Cruz is to sell to an investor. Investment companies and even individual investors may be willing to purchase properties with limited equity. But that’s certainly not always the case.

Many investors are not interested in “underwater” properties. If they are they may request a purchase subject to existing financing. In this scenario, you sign over the title to the investor who makes payments on the existing mortgage. But your name will still be on the mortgage, and this, and this has the potential for problems. 

The Best Option for Selling a House with No Equity

So, yes, you do have options if you want to sell a house that has little to no equity. But, ultimately, when all is said and done, the best option for many sellers is to work with an experienced local agent. There is the commission, but your risk will be reduced this way, and your job will be much easier. So if you plan on selling a house with no equity in Santa Cruz, be sure to contact us today at 831-588-2334.

Connect With Us!

If you're looking to buy or sell a property connect with us today!

How Can We Help You?

We would love to hear from you! Please fill out this form and we will get in touch with you shortly.
    (check all that apply)
  • This field is for validation purposes and should be left unchanged.

Call Us!
831-588-2334