Did you apply for a mortgage forbearance on your home, or possibly on one of your rental properties? Let’s talk about your home selling options, then.
I’m Marcie Billen and I’m a real estate agent in Norman, Oklahoma with Keller Williams Mulinix and Ruya Team Realty. At the beginning of the pandemic in the U.S., congress passed a bill for mortgage forbearance, or what’s otherwise known as getting you a deferment on your mortgage payments. Check out my other video about potential factors, outside forbearance, that could affect the 2021 housing market.
Is selling a home in forbearance possible?
Is it possible to sell your home if you have forbearance or deferment on your mortgage for your home or your rental property? Yes – yes it is. Is it the right move for you? I don’t know, let’s find out! Ask yourself these questions:
What is your repayment plan?
The first question that I have is, “do you know what your repayment plan is?” Did your mortgage servicers say that you needed to pay a lump sum? Or were they going to tack it onto the end of your loan? Or did they have to redo your loan altogether? These are questions that you need to know the answer to in order to figure out what your payments are going to be. You need to figure out what your repayment plan is for your deferred mortgage, or your forbearance. The best way to do that is to get a hold of your mortgage service provider.
What if that forbearance repayment plan won’t work for me?
Second question. After reaching out to your mortgage servicer about your forbearance, you think “what if that repayment plan just isn’t going to work for me?” Or maybe you want out of your house, since all the changes that have happened in the past year? Are you concerned that you may be headed into foreclosure if you don’t do something about this repayment plan?
Remember at the time of filming, this is early 2021; we have a moratorium on foreclosures and also eviction, but what about when that moratorium ends on foreclosures and evictions? What are you gonna do? If you’re concerned about making your payments, it may be in your best interest to think about selling.
Selling Could be an Option
Maybe some people don’t know what’s going on in the real estate market right now in Oklahoma, but one thing I want to make clear – this is NOT 2008. The real estate market has not crashed, as of yet. It is early 2021; we don’t know what’s gonna happen with it, but what we know right now is, that homes are literally flying off the shelves! We are in an extreme seller’s market, meaning that there is not enough homes for people to buy.
We have more buyers than homes in the market, at this point. The average sales price for homes in the Oklahoma City metro increased by 3% over the previous year, 2019. So what does that mean? So in 2019, homes sold for 6% more than they did in 2018. Great! And then in 2020, homes sold for 9.3% more. Oh my gosh, that’s a crazy increase! This is much more than our usual appreciation on homes.
In fact, we’re seeing so many homes sell for more than their asking price and with multiple offers. I’m seeing some homes get around 20 offers, depending on the price range. Now let me be clear, this is not every single price range, but it is a big chunk of homes. Listings, or homes for sale, on the market are actually at an all-time low. They’ve decreased by a significant percentage; 30 to 40 percent, in some areas. That, coupled with extremely low interest rates, and people wanting to buy homes, means that your home in forbearance could be extremely saleable and you could make a nice profit.
Is this going to last forever? I mean probably not. I don’t have a crystal ball, I can’t tell you. So, this may be something that you want to take advantage of now. The profit from the sale of your forbearance home could completely cover all of your payments for your house, all your mortgage payments, including forbearance payments, plus give you a nice profit to walk away with. This also means you could have a lot of options in selling your home, even if it is forbearance.
Rentals too?
If you have a rental property and you have a tenant in there, and maybe they haven’t been making payments as well as they were in the past, or maybe just lower payments, and you really kind of want to sell that property, it’s possible you can sell it without having your tenants leave at all, because we have lots of investors who are wanting to buy properties like that.
Off Market Listings
There are also options for you to sell your personal home, or your investment property without even putting it on the market. I have buyers that are ready to buy off market homes right now and I know I’m not the only one that has those buyers. If you’re concerned about selling your personal home that’s in forbearance because you’re like “where am I gonna go?” We have options for that too.
Leaseback Options
We’re seeing more people use an option called a leaseback, where you sell your home, and then lease it from the person that you purchased it from. That way you have your money, you have the ability to maybe get another loan, or look for a rental, or you know, move out of the country. Whatever you want to do, and you can have that stability of having a house to live in while you make your next steps.
Long Closings
There’s also options for long closings – I’m writing more and more of those these days, meaning that you have a closing of 60 to 90 days instead of the regular 30 to 45. The point of this post is this – you may have applied for forbearance or deferment on your mortgage AND you may have the option of selling it!
If you want to talk more through your options, because every case is very specific and different, you can give me a call, email or text!
