Our house is for sale, lots of yucky stuff happening, ideas welcome. (long)

[hana]

Sell very cheap, rent, try to donate?

 

Background:

We paid $108,000 for our house 12 years ago, and put probably another $15,000 into it (new furnace, chimney work, hot tub, new appliances, etc.). For various reasons, including significant violence and other crime in our city, we decided to move, knowing that our house would not sell for much even though we are in one of the better areas of the city. The city's valuation of our house is about $59,000.

 

We have moved, very far away, and the house is empty. We have neighbors watching the house, we left lights on, etc. We do not have an alarm system, because, frankly, our very limited police force do not generally have time to respond to residential alarms.

 

We put the house on the market for $54,500. In the month the house has been for sale, there has only been one showing. There would have been a second, but when they arrived, they discovered the house had been broken into.

 

The copper pipes were stolen, and there is a little other damage. The insurance adjuster is very clearly working to get away with as little as possible.

 

In the wake of this, we lowered the price to $45,000. It's only been a couple days, but no interest.

 

So, now:

Theoretically, our insurance will cover 30 more days of the house being empty. After that, we can get vacant home insurance but it will cover ONLY wind, fire, smoke, and it costs about $3300/yr. (to only cover to the sale value, not the original value--that insurance was $8900/yr.). In all likelihood, our policy will actually be cancelled after this claim--they would still need to give us 30 days notice.

 

We will get the pipes replaced, but we're not sure how soon to do it, as we'll likely be broken into again at this rate.

 

Which of these options would you choose?

1. Keep the price at $40,000 or $45,000?

2. Lower the price to $30,000 or $35,000?

3. Lower the price even more?

4. Try to rent the house? The rental market here is so bad also, that beyond the regular risks of renting, we would likely would not make anything--maybe $50/month--above the cost of insurance and taxes (if we used a rental management service, as we would need to do), so there would be little money to repair damages or wear/tear. Our realtor would prefer that we not rent because it can be so hard to get tenants out.

5. Try to donate the house to a charitable organization and take the tax deduction? I don't know how realistic this is in our city (I've heard they accept only 10% or fewer of offered houses), but if it is possible, we would need to do it sooner rather than later (in case more theft/vandalism happens).

 

It's a lovely house, and it served us well, and we hate to see it fall apart. We really hope another family who has good reason to stay in the city will be able to live in it.

[OrganicAnn]

I would not go the rental route unless you were in the same city or could use some agency.

 

I have you done everything you could to make it sellable? Things that are inexpensive but help? Fresh coat of neutral color paint. Bright light bulbs in all the fixtures. Put deodorizers in closets and out of the way so it doesn't smell musty or vacant. Make sure the grass is cut and the landscaping it kept up.

 

I would ask the real estate agent how low to go and follow their advice.

[hana]

I would not go the rental route unless you were in the same city or could use some agency.

 

I have you done everything you could to make it sellable? Things that are inexpensive but help? Fresh coat of neutral color paint. Bright light bulbs in all the fixtures. Put deodorizers in closets and out of the way so it doesn't smell musty or vacant. Make sure the grass is cut and the landscaping it kept up.

 

I would ask the real estate agent how low to go and follow their advice.

 

Thank you. On our realtor's suggestion, we spent $1000 on having someone paint through several rooms. (We just didn't have the energy to do it ourselves, as our new house also requires painting.) We did replace all dim bulbs. I'll ask a friend to put some fresh-smelling deodorizers in the closets--good idea! (The downstairs closet has a lavender one, but I'll replace that with something more "fresh.") We have the grass and landscaping taken care of every time the man does our next door neighbor's (he does both every 7-14 days, depending on how fast the grass is growing). I sent an email to the realtor today about price.

 

The house is currently empty. We are going to borrow minimal furniture and "stage" the downstairs.

[staceyobu]

It's really hard to believe you can buy a house for over 100,000 and have it depreciate until you are considering giving it away. :grouphug: I'm curious as to where it is geographically, although I know you may not want to share that info.

[Little Nyssa]

Can a house be given to Habitat for Humanity? Could they refurbish it and give it to someone who needs a house?

[hana]

It's in Flint, Michigan, regularly at the top of "most dangerous" and "most violent" cities. Parts of it are wonderful, but the thugs have taken over.

 

My eight-year-old couldn't sleep at night, terrified that the house would be broken into. When he did fall asleep, he woke up wanting me every night. Since we moved, he sleeps peacefully. I don't regret moving because it's what our family needed, but I gave up a good job to leave, and I hate that a city that has some really great aspects is so unsafe for so many people.

 

I may delete this, so please don't quote.

 

 

And, yes, I can't believe how much it has depreciated, but no one wants to move there, and those who can't get out of the city have terrible credit ratings and can't get funding for even a low-priced house.

[joannqn]

It's really hard to believe you can buy a house for over 100,000 and have it depreciate until you are considering giving it away. :grouphug: I'm curious as to where it is geographically, although I know you may not want to share that info.

 

It doesn't surprise me. The house we used to live in appraised for $250,000 when we refinanced several years ago. We owed $165,000 on it. It sold for $62,000. The buyers went in and redid the entire house...new paint outside, new paint inside, installed french doors on the parlor, renovated the entire kitchen (new appliances, new counters, new cabinets, new sink, new flooring, took out a wall, filled in a wall), renovated the entire bathroom (all new fixtures), added an entire bathroom which required changing walls upstairs and plumbing, renovated the cellar entry, etc. TONS of work. It then sold for $141,000...still $24,000 less than we owed. Crazy!

[HollyB]

I have heard of people putting up signs that say "no copper" or something like that. That may deter any more break ins. Maybe your realtor has a better idea.

 

I've heard so many things about that city; I'm glad you were able to move.

[hana]

Can a house be given to Habitat for Humanity? Could they refurbish it and give it to someone who needs a house?

 

I'm going to try calling them (and St. Vincent dePaul) tomorrow and see what they say. Honestly, once we use the insurance to fix the pipes, the only refurbishing would be one bedroom that needs children's wallpaper taken down and to be painted (our realtor told us not to bother). The house is lovely, with a fireplace, a very nice new-ish kitchen, etc.

 

I would think they would want it, but I don't know how much they are currently investing (time and energy) in our city.

[hana]

It doesn't surprise me. The house we used to live in appraised for $250,000 when we refinanced several years ago. We owed $165,000 on it. It sold for $62,000. The buyers went in and redid the entire house...new paint outside, new paint inside, installed french doors on the parlor, renovated the entire kitchen (new appliances, new counters, new cabinets, new sink, new flooring, took out a wall, filled in a wall), renovated the entire bathroom (all new fixtures), added an entire bathroom which required changing walls upstairs and plumbing, renovated the cellar entry, etc. TONS of work. It then sold for $141,000...still $24,000 less than we owed. Crazy!

 

Wow. I'm sorry to hear that you've been there too. Yes, there's very little that this house could use for updating, but still....

[hana]

I have heard of people putting up signs that say "no copper" or something like that. That may deter any more break ins. Maybe your realtor has a better idea.

 

I've heard so many things about that city; I'm glad you were able to move.

 

I wondered how to indicate that the copper's already gone without looking too "ghetto." And I don't know that it would deter anyone from checking anyways.

 

Our realtor is shocked, even though she lives in this city. We are on a busy street. Even at night, there would never be more than five minutes that a car wouldn't pass by, so they are doing this even as people pass by. I'm less surprised--soon before we left, three people we held up at gunpoint in their own driveways (walking from car to house) over two nights, before dusk both nights.

[staceyobu]

Woah... I looked up the area on zillow. House prices there are less than what an empty lot is most places around here... and I live in an area I would consider to have cheap housing. I mean, under $20,000 for a 3 bedroom house! Is the whole town going to collapse or is it just become a completely impoverished area?

[tex-mex]

I hate to say it... but the market in Flint may not improve for years.

 

1.) Give the home back to the bank. A deed in lieu of foreclosure has fewer tax consequences and is less damaging to your credit than a forced foreclosure. You can do this only if you own it free and clear with no loans or leins on the property.

 

2.) Have you discussed with a lawyer your options about Foreclosure? It hits the credit for 7 years, tho'.

[hana]

Woah... I looked up the area on zillow. House prices there are less than what an empty lot is most places around here... and I live in an area I would consider to have cheap housing. I mean, under $20,000 for a 3 bedroom house! Is the whole town going to collapse or is it just become a completely impoverished area?

 

I just don't know what will happen. I taught at the University there, and so had a community of professional friends. Our cultural area is awesome--a historical museum, a planetarium, a beautiful auditorium (I actually cried because my daughter will no longer perform there with the youth orchestra), an art museum, a school of performing arts (again, my children benefited so much from this, and the public library. We were walking distance to all that, and to the University, and it could have all been idyllic.

 

BUT, the violence and poverty are terrible. There have been 40+ murders so far this year. Nearly every day, there is at least one shooting or stabbing. I can't even begin to guess how many "smaller" crimes, but most don't even make the news any more. Because of poverty (not many people paying taxes), the police force is constantly being cut, so police aren't available to catch criminals. The jail is overflowing, so, when they are caught, unless it is a homicide or sexual assault, they have to be set free with a summons.

 

And yes, our house is 1800 square feet, with four bedrooms. In many communities, I expect it would still be worth over $100,000. I know we spent more for less when we moved.

[hana]

I hate to say it... but the market in Flint may not improve for years.

 

1.) Give the home back to the bank. A deed in lieu of foreclosure has fewer tax consequences and is less damaging to your credit than a forced foreclosure. You can do this only if you own it free and clear with no loans or leins on the property.

 

2.) Have you discussed with a lawyer your options about Foreclosure? It hits the credit for 7 years, tho'.

 

Thank you. I agree that it will likely be many years before the market improves. We own the house--it's paid off.

[tex-mex]

Thank you. I agree that it will likely be many years before the market improves. We own the house--it's paid off.

If you can walk away from it and give it back to the bank... you might be able to write off the loss come tax time? Talk to a CPA.

[Tap]

What about giving it to a church to a use as a parsonage (tax write off for you)?

 

Or maybe they would also know someone who would be willing to live in the home temporarily while you are away. In lieu of rent, they can be your security and do basic maintenance like mowing the lawn.

 

Would it qualilfy for a HUD rental contract?

Edited July 27, 2012 by Tap, tap, tap

[mazakaal]

I would look into churches and ministries in the area. You could possibly donate it to someone who would look at the area as a 'mission field.' I have a friend in another part of the country who is moving into an inner city with a ministry that ministers to the drug addicts, prostitutes, and others.

[FaithManor]

It's in Flint, Michigan, regularly at the top of "most dangerous" and "most violent" cities. Parts of it are wonderful, but the thugs have taken over.

 

My eight-year-old couldn't sleep at night, terrified that the house would be broken into. When he did fall asleep, he woke up wanting me every night. Since we moved, he sleeps peacefully. I don't regret moving because it's what our family needed, but I gave up a good job to leave, and I hate that a city that has some really great aspects is so unsafe for so many people.

 

I may delete this, so please don't quote.

 

 

And, yes, I can't believe how much it has depreciated, but no one wants to move there, and those who can't get out of the city have terrible credit ratings and can't get funding for even a low-priced house.

 

:grouphug::grouphug: I can relate. A house we owned, only 30 minutes from Flint and in a nice neighborhood, appraised for $112,000.00 and three years later when the housing bubble burst in Michigan and the unemployment rate shot up, we were only able to get $45,000.00 for it! Michigan STINKS economically.

 

I doubt that holding onto it and paying $3300.00 for insurance, painting, and having to repair all of that plumbing (quite costly), plus drywall repair or replacement if copper was ripped out of the walls, is worth your effort or money.

 

I'd put it on the market for $10,000.00. Seriously, someone will buy it, do the minimum fix up, live in it for a couple of years, and if the market recovers, flip the house. The person who buys it will likely be someone who has a business flipping houses and will have cash. Cash is the only offer I'd take. If it doesn't sell rapidly that way, I'd donate it to a charity or give it to the city.

 

Flint and Saginaw are TERRIBLE cities for crime, tanking property failures, and "misery" index.

 

Faith

[FaithManor]

Woah... I looked up the area on zillow. House prices there are less than what an empty lot is most places around here... and I live in an area I would consider to have cheap housing. I mean, under $20,000 for a 3 bedroom house! Is the whole town going to collapse or is it just become a completely impoverished area?

 

 

Unemployment is well over 20% in Flint itself. The crime rate rivals inner city Detroit and a shrinking police force to deal with it. Whole areas of Flint now look like gettos as GM pulled out and left their buildings to rot. Houses are abandoned daily. So many people have pulled out of Flint (in 2009, they were losing at a rate of 2,000 people per month for several months, however, it seems that everyone who had the means to get out have done so and that tide has ebbed), that the schools have empty buildings. The schools are terrible, total war-zones.

 

The Flint Cultural Center was the haven in all of that. U of M and Mott had put together a wonderful area for the Arts and Sciences. It has been a real blessing to that city. However, the violence is encroaching on the area. DD is no longer going to take classes at U of M Flint and transfer to the Ann Arbor campus even though Flint still had classes to offer. She'll be driving a full 2 hrs. 20 min. to get to her classes now - that's one way. For the Mid-Michigan kids, living at home and commuting to the Flint campus, which offered a HUGE array of classes so many, many kids could get their entire degree or at least half of it while living at home and saving dorm costs. Many students are afraid to continue attending in Flint.

 

Saginaw, north of Flint, is fast taking the lead on violent crime and poverty and that is just sooooo scary because it used to never be remotely close to as bad as Flint. Now Mid-Michigan has two cities that are very dangerous to live in or near. :glare:

 

Michigan was very economically dependent on manufacturing and particularly the automobile industry and that ship sailed quite a while ago, leaving a gaping chasm behind.

 

Faith

[Mama Geek]

Have you considered auctioning it with no reserve?

[besroma]

I am sorry you are experiencing this, but am so glad you were able to move.

 

I think the ideas of donating it to a church, allowing the church to use it rent-free for missionaries, or having graduate students or a handyman live in it rent-free are good ideas. It is possible that you could have this type of arrangement long enough for the area to recover somewhat, if it does recover.

 

Have you asked the realtor about an auction , if you just want to be done with it no matter your loss?

[Soror]

No ideas but hugs. I would think perhaps a donation would be the best as far as taxes, even though it will shred your credit. It is my understanding(which may be wrong) when there is a short sale or foreclosure you have to claim the difference in value and actual cost on your taxes as a profit or such.

[Carrie12345]

I have no advice, but wanted to tell you I'm so sorry. :grouphug:

 

The real estate situation stinks here, but it doesn't involve anywhere near the same crime/safety levels, so prices are hovering just above *completely* ridiculous. I keep trying to remind myself that we are fortunate to be in a home that, while pathetically under valued, is safe and dry.

 

I hope you're able to find a resolution that isn't a complete and utter loss. :grouphug:

[Katy]

If you need cash, auction it.

 

But probably the best deal (assuming your income is still high) would be to donate it somewhere and use as a tax write off. My guess is even if you auctioned it it would sell for something like $10K or less.

[speedmom4]

I'm so sorry that you are dealing with this! I cannot even imagine the kind of decline parts of Michigan are experiencing. But I would try to sell the home. Since you own it outright you could lower it to a price someone will pay for it. Maybe your realtor has an idea of what $ amount it will take to get enough interest to sell it.

 

My concern about donating the home would be that organizations may not be able to afford property taxes, insurance, and maintenance on a home even if it is given to them.

 

I hope there turns out to be a silver lining in this situation for your family. Sounds like you all made the right decision to move out of the area for the sake of your children's safety.

 

Keep us updated on what happens!

 

God Bless,

Elise in NC

[KnitWit]

I would also suggest contacting the U and seeing if there are grad students or professors who would rent...or if there is a prof or pastor to whom you could donate the house.

 

I'm so sorry. There was a huge thread on Michigan a week or so ago and someone posted videos. It brought tears to my eyes. I went to Flint as a teen on a youth choir trip. I have fond memories of the families who housed us there. They were obviously very poor then, but they were so KIND! It is sad to see what has happened there. :(

 

:grouphug::grouphug::grouphug:

[mymonkeybug]

I will try to briefly describe our experience and see if it helps you at all.

 

Sold a house when market was good, bought a new one that was waaaayyyyy more than we felt comfortable with but we were approved so...fell behind on mortgage 3 times in 7 years and it went into foreclosure twice. We managed to work a modification both times to save it. When the third time came around we said to H*** with it because the stress it was causing our family wasn't worth it-the second time it had happened hubby and I separated for nearly a year and I wasn't going to risk my marriage and family again-nothing is worth that. We asked for help this third time because hubby's income went way down(working as an automotive technician and people stopped fixing their cars 2-3 years earlier because they couldn't afford a home and food and the car repairs so...)they said sorry he makes too much. WT*, no he didn't but. Asked again, they said we can only help if you fall behind 90 days so we did purposely. Low and behold after 90 days they tell us we don't qualify for any help(again he makes too much)and by then we were scr**ed because in order to get current it meant coming up with $6000 and fees to do so. Money we didn't have after he lost his job. By God's Grace he found another job quickly in a different profession and it has been fabulous since. So anyway, we moved out into a rental my mom owned(I realize not everyone would be so lucky)and listed the house for sale as a short sale. Owed over $300k and it appraised for less than $200k. Wound up selling in the sixth month for $170k. Mortgage company agreed to give us a release from the deficiency(money owed on mortgage)because we so willingly tried to sell it rather than letting it foreclose. Had we let it foreclose without helping the mortgage company by selling it then they would have legally come after us for the deficiency.

 

The IRS normally charges taxes on a release of a deficiency because it is viewed as a gift. We couldn't afford the taxes on a gift of over $100k. However the IRS has a program right now that is good through December 31, 2012 that states if you lose your home to foreclosure or short sale it(either of which is considered a gift since you are released from money owed)but after Dec. 31, 2012 they will begin taxing this type of thing again.

 

Sorry, story wasn't as short as I had hoped. LOL! My point being, do whatever you can to either get it sold in a short sale or let the bank foreclose but make sure anything is complete by 12-31-12 so the IRS doesn't tax you. Also make sure the mortgage co. will release you from the deficiency. If they won't then let them take the house and file for bankruptcy. A bankruptcy yes will hurt your credit for 7-10 years but it will prevent the mortgage co. from pursuing you as well as the IRS.

 

Hope this helps and don't worry, it will get better. The stress will ease eventually. ;)

[kokotg]

I'd do whatever it took to be done with it as soon as possible. As terrible as it is to lose that much equity, you're in a really fortunate position compared to most people who are trying to get rid of houses that have lost a lot of value in that you own it outright and CAN get out. If there IS a price at which it will sell quickly, I'd find it, whatever it is, and do it. From the way you describe the situation, I imagine being finished with the whole thing will be a huge relief.

[mymonkeybug]

Ahhhh, I missed the part about owning it outright. Well that makes your options easier to go forward with.

[Scuff]

How low can you lower it? I assume it's paid off, since you're talking about giving it away? I'd lower it as much as you can, letting buyers know that the pipes will be replaced with a contract. Move it fast and then replace the pipes when you know someone will be in it soon.

 

ETA- Read the other posts, now. :) Yes, sell or donate it. I'd probably lower it to what the realtor thinks is good, and donate at the end of the summer if it still isn't sold. Maybe try the auction idea. I wouldn't rent it or let anyone live there free. If you find someone who wants to live their free, give it to them. You don't want the liability of this still being in your name.

Edited July 27, 2012 by Scuff

[Scuff]

It's really hard to believe you can buy a house for over 100,000 and have it depreciate until you are considering giving it away. :grouphug: I'm curious as to where it is geographically, although I know you may not want to share that info.

 

Not unbelievable here in MI. My sister paid about $106K for hers and the best short sale offer she could get was $15K. The bank screwed around and it ended up foreclosing. Ours is probably worth 20K, but things aren't moving here. If we had to leave it, it'd probably go back to the bank. I doubt it would sell. (and then be broken into, gutted, and eventually catch on fire. That seems to be the cycle of things here these days.) There's a house around the block from us that the neighbor bought for less than $10. He plans to demo the house and make his yard bigger. A few years ago, someone bought it and fixed it up nicely. But it's been vacant and is now uninhabitable.

Edited July 27, 2012 by Scuff

[TranquilMind]

It's in Flint, Michigan, regularly at the top of "most dangerous" and "most violent" cities. Parts of it are wonderful, but the thugs have taken over.

 

My eight-year-old couldn't sleep at night, terrified that the house would be broken into. When he did fall asleep, he woke up wanting me every night. Since we moved, he sleeps peacefully. I don't regret moving because it's what our family needed, but I gave up a good job to leave, and I hate that a city that has some really great aspects is so unsafe for so many people.

 

I may delete this, so please don't quote.

 

 

And, yes, I can't believe how much it has depreciated, but no one wants to move there, and those who can't get out of the city have terrible credit ratings and can't get funding for even a low-priced house.

 

I know a well respected landlord who did business in Michigan for over 30 years who went out of business because the thugs ruined the property values and she couldn't get any decent tenants at all.

 

I'm really, really sorry. I'd probably unload it however you could, whether by auction or giving it to Habitat.