Yes, you can short sale your house even with structural damage. Indeed, the lender may be more inclined to settle your loan because of the structural damage.
The bank does not want to own your house.
But who will want to buy my house with structural problems?
Someone will. Price fixes everything. The price will have to come down as an incentive for someone to take the risk and do the work.
But I owe too much on my house...
Once we, your short sale Realtors, submit the buyer’s offer to your lender for approval they will send an appraiser to your house. Your lender wants to confirm today’s current value in its as-is condition, including the structural damage. The appraisal should reflect the reduced value of the house.
Your lender does not want to foreclose and make your structural problem their structural problem. They should let the house sell at as-is market value regardless of how much you owe on your mortgage. If they take the house in foreclosure they will have to sell it cheap anyway.
But the buyer won’t be able to qualify the house for a new loan...
Plenty of solutions here:
- There are rehab loans available to buyers, such as HUD’s 203(k) loan
- Some buyers have cash, and don’t need a bank committee to approve the house
- If the damage is so great, only real estate investors will buy the house with the intent to fix and resell or fix and keep as a rental. Investors often have financing options that aren’t available to homeowners.
It is possible sell a house with structural problems, even if you owe more than the house is worth
You need the right short sale Realtor on your side. If you are in the Louisville KY area, please call me to help you out, the bank pays my commission out of their proceeds, so you don’t have to.