Selling a home in foreclosure
When most people are notified by their lender that their home is soon to be foreclosed on, they think all is lost. While this is a difficult time, the good news is that you still have options that won’t hurt you as much financially, such as a short sale. This will allow you to sell your home before foreclosure, and the bank will get all the proceeds from the sale. While it may not equal the full amount owed, it will usually be enough to satisfy the bank, as you don’t want to waste time trying to sell the property and possibly receive less money in the process. But if you’ve decided it’s time to sell your house fast, here are some tips to keep in mind.
If you have a home that is going to be foreclosed upon due to divorce, illness, relocation, inheritance, or another life event, always make sure you get permission from your lender before going ahead with a short sale. By discussing your situation with them ahead of time, you will be able to show that you are not being irresponsible in repaying the loan, but rather that there were extenuating circumstances that led to the current situation.
In these situations, don’t go it alone. Instead, hire a real estate professional to help you. In doing so, they can help set a reasonable price for the property, answer any questions you may have, and even act as a buffer between you and your lender if necessary. This will be especially important if the current housing market is weak, as it may take a bit more work to find a buyer.
Once you have a buyer willing to pay your asking price, meet with your lender. Since you will already have a buyer ready to take the property, the bank will likely accept the offer, as long as it is reasonable. As added insurance, be sure to tell the lender that if you turn down the offer, foreclosure is inevitable, as this will give them an added incentive to approve you.
When you decide it’s time to sell your home quickly due to factors such as divorce or illness, be sure to get a written promise from your lender that they will not file a deficiency judgment against you once your home is sold. This would be the difference between the sale price of the property and the remaining balance of the mortgage, if any. Knowing that no legal action will be taken against you will make it much less stressful to sell your home during what is already a difficult time in your life.
