Selling a home in foreclosure
When most people are notified by their lender that their home will soon be in foreclosure, they think all is lost. While it’s a tough time, the good news is that you still have options that won’t hurt you as much financially as a short sale. This will allow you to sell your home before foreclosure, and the bank will get all of the proceeds from the sale. While it may not equal the full amount owed, it will generally 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 home fast, here are some tips to keep in mind.
If you have a home in foreclosure due to divorce, illness, relocation, inheritance, or other life event, always be sure to get your lender’s permission before going short. By discussing your situation with them in advance, you will be able to show that you are not being irresponsible in repaying the loan, but that extenuating circumstances have occurred that led to the current situation.
In these situations, don’t go it alone. Instead, hire a real estate professional to help you. By doing so, they can help establish 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 today’s 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 sales price, meet with your lender. Since you will already have a buyer ready to take the property, the bank is likely to accept the offer, as long as it is reasonable. As additional insurance, be sure to inform the lender that if they decline the offer, foreclosure is unavoidable, as this will give you an additional incentive to approve it.
When you decide that it is time to sell your home quickly due to factors such as divorce or illness, be sure to get a promise in writing from your lender that they will not pursue a deficiency judgment against you once your home is sold. This would be the difference between what the property is selling for and the remaining mortgage balance, if any. By knowing that no legal action will be taken against you, it will be much less stressful to sell your home during what is already a difficult time in your life.