Which will do the most harm to me financially?

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Which will do the most harm to me financially?

I have a 107 year old Victorian home that is literally falling down around me. I have tried several times to sell. It is much more home than I need and medical issues make it difficult for me to go up and downstairs. I have found an all-on-one level condo for rent that is less than 3 blocks from my job. I am literally swimming in doctor bills and because I have been late with 2 payments, my credit score isn’t great. I have never been late with mortgage payments, utility bills, or other monthly expenses. I have been told that if I allow the house to go to foreclosure, I will have no credit. I have been told that if I use one of those

Asked on July 25, 2017 under Real Estate Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

How much equity is realistically in the house, given the shape of disrepair and all the work that needs to be done, as well as the mortgage? E.g. if in its condition and given the work to be done, no one would buy it for more than, say $120k, your really only have around $10k; it would not be that bad to let someone take it from, getting you out from under the bills and costs, in exchange for losing at most $10k equity.
(Remember: it doesn't matter what the home might go for if in good condition, since it is not in good condition and you can't afford to fix it up.)
If there is alot of equity given the size of the home, its location, etc. even given all the issues and costs, then your best bet is to set a lowball price and sell it fast, given up some potential equity for a quick sale. 
E.g. say that if in perfect shape it's worth $250k; realistically, given the condition it is in, it is worth $200k; you could, after realtor fee, realize around $75k-$80k; if you set the price at only $170k-$180k, you will give up some potential equity but will likely get out of an expensive house you don't need quickly, while still making money.
So the answer to your question depends on what--realistically--the house is worth given its condition.


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