Job Relocation When Your Home is “Underwater”

Despite a positive rebound of the real estate market, with home prices increasing in the first quarter of 2013, close to half of all homeowners with a mortgage are still considered to be “underwater”. Half of these homeowners owe significantly more than their home is worth and nearly 20% have less than 20 percent equity in their home. This equates to over 22 million homeowners in a position where they are likely not able to afford a down payment for a new home.

For homeowners who need to relocate for a new job,during a time when employment opportunities are increasing, being under water with your mortgage can leave you feeling overwhelmed. Here are some things to consider to assist you in making the decision on whether to relocate when you have a home to sell.

Talk to your boss. Underwater homeowners who need to relocate should first discuss the situation with their employer. It's not uncommon for a company to provide financial assistance for employees who are moving from one location to another. An employer might be willing to put some or all of the financial assistance toward helping a homeowner out out of a financial bind.

Contact your lender. Underwater homeowners who need to sell their home to relocate should speak with their lender immediately. By working with the bank, homeowners may be able to reach an agreement to assist you with getting out of the mortgage. The bank may consider short sale, where the lender accepts less than the outstanding balance on the loan. This can often times be a drawn out, long process. However, by being in contact with your bank you can at least begin the process of your relocation. 

Rent out your home. As long as your mortgage contract permits, a homeowner could rent out their home and put it up for sale when the real estate market recovers. This option may help you in moving forward with your relocation, but may also mean that you will have to rent in the area where you are relocating.Without the proceeds from a sale of your home, it is often difficult to come up with a down payment for a new home and also may be difficult to carry two mortgages (depending on the circumstances of your credit situation).

Contact a We Buy Houses Investor. Private home buyers/investors are typically the quickest solution. The have built their business around buying homes quickly, saving home sellers time (often able to close on your sale within as little as 7 days) and expense. Investors typically do not pay market value for homes, however they do shave months of time and the money required.  This option should be considered when deciding to sell your home fast when you are relocating.