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6 Replies Last post: Apr 24, 2008 7:41 PM by LUCKIEST

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Can I ever sell my house?

Apr 21, 2008 7:57 AM

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keylaleigh 7 posts since
Apr 17, 2008

My sister and I currently own a house together, and are planning on opening a small store in a primarily tourist-oriented destination that's about 3 hours away. Our original plan was to sell the house in order to come up with about $20,000 to contribute to the business. Talking to a SCORE counselor, we were told that the bank will NOT let us sell the house, as that is their only true collateral, other than 2 cars. So we've decided that I will move up there while she will stay down here in the house. This will stretch us financially, and I'd also like her up there just to help out with the day-to-day running of the store. Will there be a point down the road where the bank would let us sell the house and just contribute the money instead? Or are we stuck paying for two different places for the entire life of the loan? If it makes any difference our company is an LLC. We will be talking to a banker about this in a few weeks, but I just thought I'd brace myself for the bad news early :P Thanks for the help.

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LUCKIEST 7,938 posts since
Aug 6, 2007

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1. Re: Can I ever sell my house? Apr 21, 2008 9:11 AM

Can I ever sell my house?? Ever is a lon long time.
It is great that you talk to your bankers and to SCORE.
Do you have a Lawyer??
As I read your question, you have a mortgage on your house (more that the $20,000).
When you sell your house you then pay off the morgage at the same time.
Again as I read this the mortgage and the loan are TWO separate items.
Good luck with the business. Hope this helps.
LUCKIEST

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DomainDiva 1,732 posts since
Oct 10, 2007

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2. Re: Can I ever sell my house? Apr 21, 2008 1:26 PM

Well now there may NOT be any bad news.

What if you were able to purchase a new home in the new location, with an agreement to purchase your existing home? You would have to make an agreement with your lender that the new house would be collateral as well. If you have a really good relationship with your banker its' worth it to go and lay all your cards on the table...honest and up front and see what happens. Tell your banker what you told us here in the forum..you may be surprised at the outcome.
By all means have Plan B as well, but don't give up on Plan A.

Good luck, let us know what if anything happens.....

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keylaleigh 7 posts since
Apr 17, 2008

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3. Re: Can I ever sell my house? Apr 21, 2008 4:53 PM

in response to: DomainDiva

Yes, the $20,000 would be the profit (probably a little more) we'd make after selling the house and paying off the mortgage.

I hadn't really considered purchasing a new home once we relocate just because I figured that by taking on all the debt of a new business, taking on another commitment such as a brand new mortgage probably would be next to impossible. Am I wrong about this? Would they rather I put myself further in debt by buying a house in my new location just so they have collateral?

We have every intention of working closely with our banker and being totally up-front about the situation. I was hoping after a couple of years of running the business (successfully, I hope!) the banks would trust us enough to let us sell the house and just give them the money.

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keylaleigh 7 posts since
Apr 17, 2008

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4. Re: Can I ever sell my house? Apr 21, 2008 4:56 PM

in response to: keylaleigh

P.S. We have about 20 years left on the mortgage, so I'm hoping the bank wouldn't make us keep it that long. Ideally we would earn enough money to pay the mortgage off early, but I'm sure that would still take at least 10 years or so.

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Winelight 10 posts since
Apr 24, 2008

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5. Re: Can I ever sell my house? Apr 24, 2008 7:29 PM

in response to: keylaleigh

Dear Keylaleigh,

Since the real estate market has slowed so much, right now is not the best time to be putting a house on the market. (Hence you only get $20K out of the deal.) I would look into renting or leasing your existing property. Do you have a good friend who is handy with minor fixes and might be able to "manage" the property for you on an interim basis for a modest fee each month? This way you still own the property for collateral if need be, and perhaps if your business plan is stellar, I would consider loaning you the $20K. Hope this helps.

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LUCKIEST 7,938 posts since
Aug 6, 2007

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6. Re: Can I ever sell my house? Apr 24, 2008 7:41 PM

in response to: Winelight

Winelight, Nice offer ( I would consider loaning you the $20K.)
Welcome to this web site
Go to members page and tell us more about yourself.
LUCKIEST

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