Owing more than your home’s market value—also called being “underwater” or having negative equity—can feel like you’re trapped in quicksand. In Q1 2025, 3.4 % of Wisconsin mortgages were seriously underwater (one in 29 loans), slightly above the national average of 2.8 % attomdata.com. If you’re a Wisconsin homeowner staring at a payoff that’s bigger than any realistic sale price, this guide unpacks all your exit routes to explore selling your house—and why a fast, cash sale to Kustom Property Solutions often delivers the cleanest rescue.
Negative Equity 101
Negative equity happens when the outstanding mortgage balance exceeds the home’s current market value. Rising interest rates (7 % on a 30-year fixed in early 2025) and Milwaukee’s cooling appreciation create the perfect storm. While the median listing price inside the city still climbed to $230,000 in May 2025 (up 15.1 % YoY) realtor.com, many owners who bought or refinanced at the 2022 peak are now upside-down.
Reality check: Pull your latest mortgage statement, then compare it with three fresh value signals—recent neighborhood sales, a licensed agent’s CMA, and an instant‐value tool. If the gap is 5–10 % or more, you’re officially underwater.
Options When You Owe More Than the Home Is Worth
| Strategy | Timeline | Credit Impact | Out-of-Pocket Cost | Best For |
|---|---|---|---|---|
| Ride it out & pay down | Years | None | Extra principal payments | Stable income, no urgency |
| Refinance / loan-mod | 60–90 days | Mild pull | Up-front fees | Slight equity gap, strong credit |
| Rent & hold | Ongoing | Depends on payment history | Landlord costs | Cash-flow potential |
| Short sale | 90–180 days | 85–120 FICO-point hit | Possible attorney, repairs | Large deficit, lender cooperation |
| Deed-in-lieu | 60–120 days | Similar to foreclosure | Relocation fee paid by lender | Fast exit, minimal equity |
| Cash sale to Kustom Property Solutions | 7–21 days | Often smaller hit if payoff satisfied | $0 fees / repairs | Any underwater owner needing speed |
A Closer Look at Each Choice
- Wait & Pay Down – Works only if you can afford the payment, taxes, and rising insurance while values (hopefully) rebound.
- Refinance or Modify – FHA streamline or a rate/term mod may shrink payments, but closing costs roll into your already-high balance.
- Rent It Out – Milwaukee’s average rent hit $1,403 in May 2025 zillow.com. Cash flow can offset the deficit, but you’ll still owe the bank if major repairs pop up.
- Short Sale – You list for less than the debt and beg the lender to eat the loss. In Wisconsin, a lender can still pursue a deficiency judgment after closing unless it explicitly waives that right in writing.
- Deed-in-Lieu – You hand the keys back. Like a voluntary foreclosure, the hit to your credit lingers for seven years.
- Direct Cash Buyer (Kustom Property Solutions) – We negotiate pay-off with your lender, close fast, and often secure a written deficiency waiver—so you walk away debt-free.
Wisconsin’s Unique Twist: Redemption Period vs. Deficiency Judgment
Under § 846.10 Wis. Stats., most owner-occupied homes get a 12-month redemption period before the sheriff’s sale. However, if the lender waives any right to a deficiency judgment, that window can shrink to six months docs.legis.wisconsin.gov. Savvy homeowners leverage this trade-off:
- Shorter clock, but no lingering debt.
- Cleaner credit profile after the sale.
Kustom Property Solutions exploits this rule in your favor. We’ll present the bank with a market-supported payoff, conditioned on a formal deficiency waiver, and schedule closing well before the auction date—eliminating both the redemption countdown and the extra debt.
Real Numbers: How a Cash Offer Stacks Up
| Scenario | Traditional Short Sale | Cash Offer from Kustom Property Solutions |
|---|---|---|
| Marketing time | 3–6 months on MLS | None |
| Appraisal/repairs | Required | Sold as-is |
| Commissions | 5–6 % | $0 |
| Closing costs | 1–3 % to seller | Paid by Kustom Property Solutions |
| Deficiency risk | Yes—unless waived | Negotiated waiver |
| Time to funds | 4–6 months | 7–21 days |
Case Study – Riverwest Two-Flat (March 2025)
Balance owed: $261,000 • As-is value: $235,000 • Deficit: $26,000
Kustom Property Solutions offered $235,000 cash, obtained a deficiency waiver, and closed in 14 days. Seller moved to Madison with $5,000 relocation money from the lender—and no mortgage hangover.
Frequently Asked Questions
Q: Can I sell if foreclosure has already started?
Yes. Until the sheriff’s gavel falls, you retain title and can accept a payoff offer. We routinely close sales with auction dates less than 30 days out.
Q: What if I have two mortgages?
We negotiate junior-lien payoffs or use proceeds to settle them. Second-lien holders often accept pennies on the dollar once foreclosure looms.
Q: Will I owe taxes on forgiven debt?
Primary-residence mortgage forgiveness remains excluded from taxable income through the end of 2025 under current federal rules. Confirm with your CPA.
Q: How fast can Kustom Property Solutions close?
Our record in Wisconsin is seven calendar days—all-cash, no appraisals, no lender delays.
Why Kustom Property Solutions Is the Easiest Way Out
- Local Expertise. We buy throughout Milwaukee County, where the median sold price hit $254,260 in May 2025 rocket.com.
- Transparent Numbers. We walk you through a line-item comparison (list vs. cash) before you sign.
- Zero Out-of-Pocket Costs. Skip repairs, showings, and commission checks.
- Deficiency-Waiver Playbook. Our attorney team structures offers that satisfy the lender and erase the leftover balance.
- Pick Your Closing Date. Need 60 days to line up a rental? No problem—just circle your date on the calendar.
Key Takeaways
- Negative equity affects thousands of Wisconsin households, but you still have leverage if you act early.
- Short sales and loan mods can work, but they’re slow and often still leave you liable for the shortfall.
- Wisconsin law lets banks waive the deficiency in exchange for a shorter redemption window—a clause Kustom Property Solutions uses to your advantage.
- A direct cash sale to Kustom Property Solutions eliminates commissions, repairs, and months of uncertainty—often within three weeks.
Ready to Be Free of Your Underwater Mortgage?
Call (262) 432-1760 or fill out our form. We’ll deliver a written cash offer within 24 hours, negotiate any deficiency waiver, and close on your timeline—so you can turn the page without writing another check.