Crossroads, Part 3: First Step

Today I took the first step in my newest journey. I called a real estate agent last week to come and take a look at my house and give me her expertise. I entered the meeting expecting bad news and ended up being presented with even grimmer choices than I had envisioned.

Two and a half years ago, I purchased the house that my ex and I shared for the previous nine years. Looking back, I know that the decision to buy the house was more emotional than thoughtful, and thus not a smart one. He and I had broken up just six months prior and I wanted nothing more than to be physically separated from him.

At first the deal depended on being able to consolidate whatever debt I'd had at the time into a second mortgage that would have made the purchase affordable for me. I'd still had student loans, a car loan, and a credit card that would've made paying the mortgage that much more difficult. What I hadn't counted on was the crash of the housing market. Within the two months from the start of the purchase until the week after I closed on the house, the home's value dropped about $50 thousand dollars. I was told there could no longer be a second mortgage. My money woes were just beginning.

Luckily, I have a job that pays well. I earn more money now than I ever did before and I have managed for two and a half years to keep up with all of my payments, but it's been a struggle. My disposable income has dwindled even as my income has risen, and such was a primary reason for my decision to sell the house. I no longer want to be saddled with a "money pit", with the bulk of my income going towards a home too big for me to even take care of alone.

The realtor arrived at my house this afternoon and within minutes of sitting down to discuss my situation, the words "short sale" came up. I had heard the term before, but never really knew what it meant. The phrase has become common within the housing market vernacular in the last two years since it crashed, and I am only just learning of its ever increasing use.

People who try and sell their home as a short sale do so because they owe more on their house than they could possibly sell it for. They usually do it because they've been affected adversely by the economy and can no longer afford their mortgage payment. There are a lot of variables involved in a short sale, which I will share once I've done some more research on them, but the bottom line is that it is far from a sure thing and it comes with consequences.

So I am now faced with new decisions as I begin this quest. If I go for the short sale, I walk away with nothing, except a stain on my credit rating, which is surely not desirable, and of course, no house. My other alternatives would be to stay put until the housing market upswings once again, whenever that may be (the realtor believes to be at least four or five years) or I may eventually get to a point where I need to be foreclosed upon, which to me is the scariest option of all.

At this point, I'm not sure how to proceed. Do I want to waste four or five years and live on in this seemingly hopeless financial and personal state, or am I willing to give it a shot and walk away from it all, in the hopes of improving my overall financial condition and risking the consequences of a hit to my credit rating? I know that I'm not in as dire a strait as many people out there, but it's my life and all I want is to be happy.

To be continued...

For previous pieces in this series:

Crossroads: Striving for a Change or Settling for Status Quo

Crossroads, Part 2: The Decision