Buyers remorse - need help and guidance

Atlanta, Georgia
First-Time Home Buyer
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Buyers remorse - need help and guidance

John Smith
Member since 2022 · 2 posts · 0 votes

Hello, I recently purchased a property as a first time home buyer and regret the decision. I now have the home up for sale attempting to get someone else to buy it. I haven't had any requests to view it in a week since posting it, I am hoping it will just take some time, a couple weeks to get some showings in. or it may be that the market has changed and I am screwed and will have to live here for the unforeseeable future

If I sold the home at a loss, say 10k , can I pay the difference to the bank/mortgage company , I know if you sell a home at a loss, its called a short sale, but I don't know if that would apply to me? if I pay the difference at closing? 

I don't think I could rent the place out, as the mortgage payments are quite high so rent might be out of someone's budget, plus I would then responsible for any issues that come up and if they wreck the place, even worse. If I am not mistaken, the home owner in GA is responsible for all the systems in the home and can't rent it out for the renter to handle everything. not sure if there is a way around that, like a rent to own situation?


Do I have any options except wait for someone to buy and stay in the home until I can get it paid off to an lower amount where I can sell it for a lower price?

Any comments, opinions, advice is appreciated. thanks!

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Greg WeikBusiness Member
Property Manager · Denver, CO · Member since 2020 · 263 posts · 327 votes
4y

Hi John, have you spoken to a property manager regarding the likely rental rate?  It may be more than you expect, and a consideration for you is that even if you end up subsidizing your mortgage by a little bit each month, this is far better than giving away the home.  If you can even rent it out for a year or two (hopefully mortgage interest rates will settle and the market will bounce back), you would pay down some of your mortgage and hopefully eek out some appreciation.  

A good PM company with high standards will put solid tenants in your home who are extremely unlikely to cause damage.  The risks of damage or default are always there, but they are reasonably small risks. 

I find very often that people who can't cashflow on a property think it's a bad investment, out of hand.  I would take a more nuanced approach and consider the return on investment differently: If you have to subsidize your rental $100 every month, but at the end of the year it's worth $5,000 more, you still come out ahead, right?   Losing $10k out of hand on a short sale does not seem like the smart play, IMO. 

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  • James Alderman
    Realtor · Plain City, OH · Member since 2022 · 82 posts · 58 votes
    4y

    Hey John, sorry to hear that you are in this situation. Interest rates are hitting recent highs, and some markets are experiencing minor corrections. One week without any showings isn't something I'd be extremely concerned with. I would check with your realtor for local market dynamics.

    I would ask the bank about covering the difference if the sale is less than the principal amount. You'd need to bring that cash to closing.

    You'd still be responsible for major fixes in most rent to own situations. The title would still be in your name and the renters could just stop payments and leave. Unless you can find an investor willing to purchase subject to the existing mortgage, renting it out yourself or selling seem like the likely options.

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  • John Smith
    OP
    Member since 2022 · 2 posts · 0 votes
    4y

    Understood thanks.

    Any other options that I have other than wait it out? I am thinking about paying for closing costs to help the sale

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  • Greg WeikBusiness Member
    Property Manager · Denver, CO · Member since 2020 · 263 posts · 327 votes
    4y

    Hi John, have you spoken to a property manager regarding the likely rental rate?  It may be more than you expect, and a consideration for you is that even if you end up subsidizing your mortgage by a little bit each month, this is far better than giving away the home.  If you can even rent it out for a year or two (hopefully mortgage interest rates will settle and the market will bounce back), you would pay down some of your mortgage and hopefully eek out some appreciation.  

    A good PM company with high standards will put solid tenants in your home who are extremely unlikely to cause damage.  The risks of damage or default are always there, but they are reasonably small risks. 

    I find very often that people who can't cashflow on a property think it's a bad investment, out of hand.  I would take a more nuanced approach and consider the return on investment differently: If you have to subsidize your rental $100 every month, but at the end of the year it's worth $5,000 more, you still come out ahead, right?   Losing $10k out of hand on a short sale does not seem like the smart play, IMO. 

    303-586-5560
    Real Estate Solutions4.3379 Reviews
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    3Reply
  • Yoon Chong
    Member since 2022 · 12 posts · 6 votes
    4y

    There are a lot of variables here.  If you rented the home at market rate, how much of a profit/loss is there?  Is the loss more than principle gained each month?  Are you in a good market for the home to appreciate?

    Depending on the cost of the home, you are not only losing 10k in the purchase price but also 6% commission fees and anything else the seller may request.  IMO, you are not in a good position to negotiate with a potential buyer. 

    1Reply
  • Michael Dumler
    Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
    4y

    @John Smith, need more information. Do you have any equity in the home? What was your downpayment? What are your current monthly payments? We are definitely starting to see a shift in the market and buyers are getting away with more favorable terms, as opposed to what we've essentially seen over the last 7-8 years (a strong seller's market). Depending on location, Greg is correct, rental rates have risen significantly over the past year and this may be enough to at least cover your mortgage. I'll shoot you a separate pm to see if I can help. 

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  • Joseph BeilkeBusiness Member
    Real Estate Agent · Palm Coast, FL · Member since 2018 · 364 posts · 244 votes
    4y

    @John Smith

    As some have said, you might be surprised what the rental rate is for your home.  You might be better off than you think.  I would try to contact a few different Property Managers and see what they think you could get for rent and then have them provide you with a net sheet after fees.  You can also depreciate the property and you might make up some lost it tax savings/refunds.  

    If you do end up renting it, you could also have a lease with the tenants that makes them responsible to pay for repairs up to a dollar amount.  I have one property set at $150. Basically it's double the 75$ home warranty flat service fee.  

    Here is a crazy curve ball I saw a few times happen after the 2008 crash.  Now of course you have to have a some what desirable property, but what a realtor did to get a home sold was partner up with a charity.  Then over the course of 6 months the charity and the realtor pushed the property as a raffle.  People bought tickets for 100$. The money was held in escrow and only once all the tickets were sold would there be a drawing.  The money raised paid off the principle of the house.  The winners paid all closing fees and taxes.  The realtor did not take a commission because of all the cross marketing to them and all ticket sale went through them so they got a ton of leads from the campaign.  The set amount of tickets sale also provide the charity with a check for $25K. 

    I really wish I could remember the name of agent and brokerage that did this outside of Baltimore.  Maybe you could pull something like this off and help our some people or animals.  

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  • Jake Handler
    Real Estate Agent · Morristown, NJ · Member since 2020 · 206 posts · 128 votes
    4y

    John feel free to give me a call to discuss this further.  I am far from Georgia so cannot help in any capacity hands-on but I can try to provide my best advice given your situation.  My phone number is in my bio.

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  • Minna Reid
    Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 633 votes
    4y

    I would highly recommend you NOT become a landlord unless you are making a profit (and there are expenses to consider rather than just the mortgage payment here). I've seen too many people choose that road when they lacked the equity to sell, only to end up as unwilling landlords and losing money monthly for the privilege, and only to end up short selling later. 

    The market has turned. It will only head down from here. You don't want to chase a declining market. Take that price down as far as you can afford to as fast as you can and hope to find a buyer quickly. If that fails your other alternative is a short sale. However, a short sale will require you proving a financial hardship, will take 4-5 months (or more), and you will take a credit hit. You will also not qualify for a new loan until about 3 years after a short sale, assuming you successfully get approved for one. In a short sale your excess debt will generally be forgiven. 

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