By refinancing and spending all her equity, she's seriously jeopardized her ability to successfully sell her home. That basically leaves her with three options:
• Keep trying to sell it at the same price for as long as it takes;
• Drop the price and take a loss; or
• Give the home back and suffer the consequences.
"What she needs to be doing is talking to her lender to work a way to avoid taking it back," Patterson said.
Sometimes, Patterson said, a bank will take a "short" payoff, meaning it will accept less than the mortgage balance.
Talking with a bankruptcy attorney to check out her options wouldn't be a bad idea for your sister, either.
Q: I own a two-bedroom, 1-¾-bath condo in Lynnwood. The master bath has a phone-booth-sized shower stall in a room too small to actually open the door all the way. I'm considering a remodel that would combine both bathrooms. How would going from two small bathrooms to one luxurious bath affect my resale value?
A: Any owner considering an interior condo remodel first needs to confirm that it would be allowed in the building. Some upgrades, such as changing the type of floor covering, may need board approval. Others are out because of the building's design.
"Once the plumbing is established in a condo, there's almost no way to move it," said Rick Spellman, an agent in John L. Scott's Lynnwood office.
Even if you can carry out your plan, Spellman doesn't suggest it from a resale standpoint.
"Bathrooms have become a key ingredient with buyers," Spellman said, and most who want a two-bedroom unit also want two baths. "Units that have fewer sell for less money."
However if you can figure out a way that a buyer could easily undo your remodel, it might work.
Finally, Spellman says that resale is only part of the equation. If you love your condo, you plan to stay there for a good while and the bath situation really bugs you, by all means do the remodel. Just know you're doing it for your own enjoyment, not for any financial gain.
Q: Years ago a friend sold her house on a real-estate contract at a high interest rate to create income for her retirement. It contains a prepayment clause that says the buyer can't pay off the balance ahead of time unless he sells the home to someone else. The buyer, without my friend's knowledge, refinanced the home at a lower interest rate with the intention of paying her off early. My friend believes he violated the contract. What are her rights in this matter?
A: "Absent a specific provision in a promissory note or real-estate contract, there is no legal right to prepay off a debt prior to its maturity," said Seattle attorney Joseph Rockne. "She doesn't have to accept payment or reconvey the deed."
She also doesn't need to send the buyer a letter telling him he's still obligated to pay her. Their original contract is still in effect, and he has no choice. However, if she accepts the payout, she waives the contract and cannot later try to reinstate it. |
