Can I sell a property for less than I owe on it?

I have a property that I have just given up on, my next step is foreclosure; I have simply ran out of ideas and am just not cut out for real estate investing.

I owe 122k, it’s worth 130k and needs repairs. I want to wholesale for anywhere from 60-90k just to get rid of the trouble of managing the trash that seems to vacate it. Is this possible or am I better off facing foreclosure and start reading up on how to fix my credit when it happens?

waves the white flag

If you sell for less than you owe, you will need to go to the closing table with a check for the difference…

You might try calling the mortgage holder and asking to settle for less than the balance – foreclosures cost them money, too.



I am really up a creek then, I was hoping to just sell for less and worry about paying the left over balance on my own. I will call my lender but wont hold my breath.

I assume my personal assets are also at stake here? I have a current home mortgage and other assets that are fine but don’t want this property to interfere with them.

What state are you located in?

Are you c urrent on your mortgage?? Do you have lates on this property?? you may consider a short sale??

Do you know what a short sale is?? if not, its when you sell the property for less than the mortgage balance, and the bank takes the loss. Generally that loss is not passed on to you and does not reflect on your credit. How does a short sale work is much more complicated, but you need to find an investor that can handle the short sale and deal with the bank. You will not have say in this, the investor will handle all this. As for price, they will determine it…

If you like, I can recommend someone that does short sales nationwide for situations like this that I just came into contact with.

If you are located in the New York area, I wouldnt mind helping you out.


I would try talking to the lender and explaining the situation. Ask them if they would allow you to sell the property for $90K and pay them back for the rest. If you have other assets and otherwise good credit, they might let you borrow the difference using your other assets as collateral. It is always best to be very upfront with the lender and try to work things out. It is best to do this before you get too far behind. I would also recommend talking to the banker in person, not on the phone. It is harder for people to say no in-person.

Good Luck,



I am nowhere near being behind at the moment, in fact I have never missed a mortgage or any credit payment in my life for that matter. I have 10,000left in savings (from 25k); I just simply cannot collect rent for this property it’s about 1 hour away from me and the thugs in the area know it. If the property is vacant it will get vandilized to the point of no return; it seems there is nothing I can do to get good people in there. I spent about 5k to fix all the windows (historic district) and they were stolen the very night they were installed. I put new front doors on, they were stolen, I put new floors in (to replace ones that someone burned down) and the friggen floors were stolen. The police have given up and it seems my property is the only one this is happening to. The most I have gotten a tenant to pay rent is 3 months in a row. My mortgage payment is 1200/month and my rents are 1400 but I keep losing and losing money and I just don’t have any idea what to do next. I want this property gone, I just can’t babysit it 7 days a week. I made a HUGE newbie mistake buying this and I am paying the price in a horrible, horrible way.

I can manage at least 8 more months paying the mortgage myself; I just don’t think I can sell it for what I owe (122k) even though it is appraised for 130k.


You are still in relatively good condition from a monetary perspective. Maybe you should try to market it at the REIA in the local area or advertise it in the newspaper as an investor special. I doubt that you can get $122K out of it, but there are still a lot of newbies out there paying full price. They won’t be able to make money at that price either, but they might be able to keep the bleeding to a minimum if they live in the area. The vast majority of people who buy investment properties pay too much for them, so there is a market out there for your property. Even if you can’t get $122K, maybe you could get $110K. You could advertise it with the applicable numbers. I see ads in the paper like this all the time:

Appraised $130,000.
Must Sell. $110,000 OBO.
You get $20,000 Equity!
Income $1,400
Mortgage $807

I would also make up some flyers and advertise at you the REIA that is nearest to the property.

Good Luck,


This is great advice, I will try this.

Thank you!