Homeowners Cannot Afford to Sell Their Home

While the country continues to hear about the alarming rate of foreclosures due to the sub-prime mortgage crisis, lenders tightening their guidelines making it difficult to qualify for a loan and home values declining, little to nothing is said about how the aggressive loan products offered during the " boom" will affect a homeowner when it comes time to sell and they cannot afford their closing fees. Is the next shoe about to drop?

Imagine having your home listed " For Sale" during this housing slump. It's been months since you signed the listing agreement with the Realtor, and even though your home is relatively new, has great curb appeal, and you have dropped your asking price 3 times, there wasn't much activity. Finally, after 7 months you get an offer! It's not as high as you would like, but your Realtor reminds you that your actually quite lucky to have a buyer that not only is pre- qualified to purchase your home, but has in hand a Commitment Letter, which is defined as "a written offer from a lender to provide financing to a borrower stating the terms under which the lender agrees to provide financing to the borrower. It is also known as a " loan commitment". Your Realtor advises that you should seriously consider accepting the offer, explaining that since the sub-prime crisis, with lenders tightening up their guidelines making it harder for consumers to get mortgage loans, and home values dropping, you never know when you will get another. So you decide to cut your losses and agree to accept it. As the Closing gets closer, it becomes clear that you ( the seller) cannot afford to sell your home. What??!! I know your scratching your head and wondering, what in the world is she talking about? The homeowner cannot afford to sell? How? Why?

Everyone knows that buying a home comes with a lot of charges, but many forget how much a homeowner has to pay just to sell their home. Let's review some of the expenses that come with selling a home:

All Mortgages Paid off

Title Insurance

Water Certification Fee where applicable

Tax stamps- also known as deed stamps, transfer tax

Pro-rated Real Estate Taxes

Realtors Commission