How to Sell Your House if You Owe More Than It’s Worth

House That Needs Repairs

Buying a home is often a good investment. On top of real estate being something that generally increases in value over time, it also has practical value since it is a tangible object. But unfortunately, this isn’t always the case. For a myriad of reasons, you may find yourself owing more on a house than it is actually worth.

When your house is underwater, you may decide to sit tight and wait until the market improves before you sell. However, there’s a chance that it’ll never rebound to the point where your home is worth more than what you owe. And if it does, it can take years. Sometimes, due to life circumstances, you just don’t have that kind of time to sit and wait around.

Your Options

If you are in this situation, there are several options you have when it comes to selling your home. You’ll want to be sure to look into each option carefully because some have lasting consequences.

Short Sale

In a short sale, you must prove to the lender that you can’t make the monthly mortgage payments and have them approve of your sale, which would be less than the balance on the mortgage. If the short sell is approved, the lender will write off the remaining balance. It may sound simple, but the truth is that the process is lengthy and unpredictable. Lenders don’t want to lose out, and deals can often fall through even if the homeowner and potential buyer agree to certain terms. Just because you have your property listed as a short sale doesn’t guarantee that the lender is going to accept the offer. Your credit score will also be damaged in the process— anywhere between 50 to 100 points, which may make it difficult to get a loan in the future.


This should be an absolute last resort that is avoided at all cost. In foreclosure, your lender will take possession of your home after failure to make payments. You’ll be evicted from the house, and though the home is no longer your problem, your credit will take a major hit. So much so that it’s unlikely that you’ll be able to get another home loan for seven years.

List Your Home On the Market

You can always list your home using a real estate agent. But as you probably know, homes can sit on the market for months without attracting any buyers. This just leaves you spending more and more on something that is never going to make you money. With this option, you are going to lose out on several fronts. For one, you are not going to make the amount of money you owe on the sale. On top of that, you’ll have to make sure that the house is in good enough condition to sell. This means that you will likely have to make home repairs and remodels, which can quickly add up to hundreds, if not thousands, of dollars. When the house does sell, you’ll also have to fork over some cash for the fees and commission for the agent, which usually run around 6% of the sale. Boo!  

Sell Your Home to a Direct Buyer

This option is definitely the quickest and easiest solution when you have a home that is underwater. Experienced buying teams know how to work with lenders to avoid a lengthy drawn-out negotiation. In as little as seven days, you can close and have a check in hand that will go towards paying off the mortgage. You won’t have to worry about paying any fees or commissions like you would for real estate agent or go through the trouble of making costly repairs on your house because cash home buyers purchase homes as-is. Homebuyer like Houndstooth Cash Buyers will also cover all the closing costs. It’s a win-win, no matter how you look at it!

How to Sell to a Cash Buyer

When you decide to sell to a cash buyer, you can be at closing in just four simple steps. Start by contacting the homebuyer to tell them a little about the property. You’ll provide basic information like the home address. If the property meets the buying criteria, you’ll set up a meeting with a buying professional at your property. After that, you’ll receive your no-obligation cash offer. There’s no pressure to take it; if you aren’t satisfied, you can walk away. But if you are happy with the amount, you can usually close within a week, or whenever is most convenient for you. Your credit won’t be damaged and you can move on quickly from the whole mess.

Making the Right Choice

Not all home buyers are created equally, though. It’s unfortunate, but there are some unscrupulous people out there who might try and take advantage of your situation and scam you. At Houndstooth Cash Buyers, you’ll find reputable professionals whose goal is to help the people in the Austin area. We understand your difficult situation and want to find solutions to your specific problems. You’ll always be treated with respect and given a fair, honest offer for your property.

Do you have a home that’s currently underwater and don’t want to take your chances waiting for the market to improve? Don’t hesitate to reach out to Houndstooth Cash Buyers. We will be happy to answer any questions you may have regarding our process or company!

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