7 Options For You When Your Home Will Not Sell

A for rent sign in front of large beach house after the owner could not sell.
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Home sellers can get discouraged if they have their home on the market for a long time and have yet to get a single buyer to make an offer. Maybe you've spent a lot of money on home advertising, made a number of price reductions, and still, nobody calls you. After a time your home will become an expired listing. Do not despair because there are still actions you can take when your home does not sell.

Postpone Selling Your Home

It could just be the case that it's not a good time to sell. If it's a buyer's market, perhaps you should take your home off the market and wait for inventory to drop. When there are fewer homes for a buyer to choose from, your home may be snapped up.

Timing can be everything, too. Selling during the holidays is especially tough because so often buyers expect bargains. You may lose money if you try to negotiate during holiday stresses. Selling in the winter is overall more difficult than during warmer months because there are typically fewer buyers. (It's often a good time to sell a troubled home by comparison.)

If you can afford to wait, selling in spring might bring an offer because spring months bring more buyers into the marketplace. But if every other home is better than yours, waiting until spring will not help.

Consider Taking Out a New Mortgage

If you need to sell is based on financial reasons, it might make sense to take out a home equity loan, providing you can afford to pay a higher monthly payment. If your existing loan is an adjustable-rate mortgage, and a higher interest rate has raised your payment to the extent that you can no longer afford to pay it, you might be able to renegotiate a loan modification plan with your lender or convert that ARM into a fixed-rate mortgage at a lower interest rate.

Before you decide to borrow more money through a refinance of your existing loan or by taking out a second mortgage, first meet with a trusted advisor to discuss your financial situation. Don't talk with any real estate professional who has a vested interest in your affairs. Speak with a tax accountant or your real estate lawyer.

Rent Out Your Home Instead

Some home sellers have no choice. For a variety of reasons, from job promotions to family-related matters, a home seller might be forced to relocate to a new area and leave an existing home behind.

Even if you can't receive enough rent to cover your mortgage payments, paying a small amount of negative cash flow every month might be easier on your wallet than forking over thousands of dollars for a vacant house.

Some sellers make a killing through Airbnb or other short-term rental sites. If you can rent the home for more by the night, consider it.

Here are a few tips about renting:

Be aware that many homeowner insurance policies do not cover a vacant house for more than 30 days; however, you may want to talk with your insurance agent about changing the policy to insure only the structure without contents.​

Some HOAs prohibit renting or limit the type of rental periods you can negotiate.

Hire a reputable real estate management company to screen tenants and hire tradespeople if repairs become necessary. You don't want midnight calls from tenants if a toilet leak.

Ask neighbors to keep an eye on your home and to notify you if they suspect problems. Give them your e-mail address or cell phone number to call in the event of an emergency. Encourage them to call the police and report suspicious activity. 

Consider a Short Sale

If you've purchased your home before a market downturn and the market has since tanked, you may owe more than your home is worth. A real estate agent who specializes in short sales might be able to negotiate with your lender to accept less than your mortgage balance. Before you consider doing a short sale, here are a few things you should know:

Discuss the ramifications with a real estate lawyer to make sure you understand the consequences. Moreover, not every seller qualifies for a short sale, and not every lender will accept a short sale.

Realize that short sales affect credit, and redeeming a pre-foreclosure on your record could prevent you from buying another home for a while.

You may owe the IRS taxes on a short sale. You may receive a Form 1099 from the lender for the amount of forgiven debt, but that is considered standard protocol. Talk to your accountant about it. It might be nothing. 

Offer Your Home on a Lease Option

You might talk to your real estate agent about doing a lease option purchase versus an outright sale. Lease options are appealing to borrowers who, for a variety of reasons, might not be in a position to purchase a home through conventional financing. Maybe they can't decide whether to buy or rent. Make sure your lawyer reviews all documents before you agree to a lease option.

Lease options give a tenant the opportunity to purchase your home at a predetermined price later. For a tenant who is on the fence about buying a home, it lets them live there while deciding whether to buy.

Typically, lease option payments are higher than a regular rent payment, which might eliminate negative cash flow for you. A tenant who has a stake in the home might take better care of the home, and sometimes lease option agreements make the tenant responsible for all repairs. 

Ask Your Employer About Relocation

If your employer is transferring you out of town, you might ask about a guaranteed purchase program. Many employers hire relocation companies that offer buyouts for employees. You might not even know that your employer has a relocation program if you don't ask. It could be free money for you. 

Lower the Price to Under Market Value

This option is referred to as a "fire sale" in real estate marketing lingo. It means reducing the price to a rock-bottom value that is attractive to the equity purchasers and cash investors who are always on the hunt for a steal. Anything will sell for the right price. Find out what that right price is by slashing it and then strongly consider whether you can live with the results. Sometimes the benefits outweigh the negatives.

And every so often, this strategy will result in multiple offers. Everybody wants what somebody else wants, even the home that you could not sell previously.