How to Spend Money Wisely » Real Estate

4 ways to deal with a home that won’t sell

4 ways to deal with a home that won’t sell

The rate of foreclosures down in the US is certainly bad news but some economists believe that before the housing market can rebound, the balance of the toxic mortgages has to be flushed out of the system.

Here in Canada where the real estate market hasn’t been quite as bad, you may not be close to foreclosure but you may be one of the homeowners who still have an underwater mortgage.

If you have a home that won’t sell or is underwater, you may be looking for options and sometimes, the options aren’t in your favor. I’ve put together a list of the best of the worst options when your home won’t sell.

Stay put

Why do you need to sell your home? Is it out of necessity or because of a want? It’s a tough question to ask but could you stay in your home for another five years or at least long enough to add value to your home if it is only slightly underwater? Other options may present themselves to you in the near future.

Rent it

Renting isn’t for everybody but for those who have to move, renting your property may not be a big moneymaker but it will at least lift the burden of second mortgage payment and you have the added benefit of making your mortgage a little less underwater with every rental payment.
Beware of the problem renters. Eviction proceedings can take more than a year, cost thousands of dollars, and result in no rent money coming in for that period of time. Can you afford that if it happens?

Lease it

Leasing is similar to renting except, much like a car, at the end of the leasing term the person leasing your home has the option to purchase your home at a set price that you two agreed on at the beginning of the leasing term. In exchange, you add a non-refundable premium into the rental payment. If they get to the end of the term and don’t want to purchase the home, you keep the premium.

If somebody really likes your home at the price you were willing to accept but the financing didn’t work out for them, they may lease your home to lock in the price while repairing their credit or saving more money for the downpayment. Similar to renting, do a thorough background check before committing to the deal.

Short sale

A short sale is when the bank or lender agrees to take less money for your home than what is owed on it. The mortgage company doesn’t want the expense of foreclosure so they may be willing to take a settlement if you’re in pre-foreclosure. Short sales can cause severe damage to your credit so they should be avoided whenever possible.

An underwater mortgage is a reality for many homeowners but there are options to help. Your home has the potential to be an income generator for you so think outside of the box before allowing your credit to be destroyed by a foreclosure.


  1. Glenn Cooke

    It’s only a problem if you’re moving. And a lot of times, people are moving because of ‘wants’ – it’s only the folks that have to move that may have a real problem right now.

    We’ve had our house for about 15 years now. Prices go up, prices go down. Sometimes there’s no houses for sale in the ‘hood, sometimes like now there’s about 10. It makes no difference to me because we’re not moving.

    It’s like investments – you only realize the loss when you liquidate.

  2. cashflowmantra

    We ended up renting ours out in 2000. We still own it and rent it out to this day.

  3. Krantcents

    In many cases, renting out your unsold home makes the most sense. It gives your theopportunity to wait out the market.

  4. Jane

    Our economies are so closely linked but it is really interesting to see huge differences between Canada and the United States. In the United States many properties end up in foreclosure rather than power of sale while foreclosures in Canada are not so frequent. I understand that banks in the US are mostly privately owned and are very interested in maximizing their profits. I just wonder how the government fails to notice that this system is inefficient.

  5. Richard Brown

    I always try not to sell out of fear or buy out of excitement. Planning ahead and evaluating if you can survive long period struggles really helps when making your decision.

  6. Emmy @ Club Thrifty

    We bought our house at the peak of the US market in 2004. In addition, in the beginning, we made some bad financial decisions. Because of all of this, we are “stuck.” I now tell everyone who is buying a house to look 10 years into the future to try and determine if this major decision is the best choice. Oh the amazing things we’d do if we could go back in time!

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