Let’s start with the good news — there is plenty you can do to avoid long-term financial damage from foreclosure.
If you owe a lender money, it is a scary prospect to be forced out of your home. But is there a way to sell your own home while in foreclosure? In brief, yes.
This article will expand on everything you need to know, from how to sell your home to what to do in a tricky situation.
Learn the ins and outs of this process and everything you can do to come out on top. Kind House Buyers supports homeowners and is here to take the pressure off you.
Can You Sell a House in Foreclosure?
If you’re asking, can I sell my home in foreclosure?’ you have most likely missed mortgage payments and could even be incurring your lender’s attorney fees.
Do not ignore your mortgage late fee letters and do everything in your power to pay all your bills on time.
Remember, the bank that issued your mortgage only stands to lose money in the event of foreclosure. They would prefer you to sell your own home to pay them back quickly. Always communicate every step of this process with your bank and treat them kindly, and you may receive better treatment. It is easy to forget they are human beings too.
But before your real estate hits auction, you can sell the property and stave off financial disaster.
Can You Stop Foreclosure Once It Starts?
After receiving your first notice of foreclosure, it can seem like the start of a slippery slope, but it is possible to stop it in its tracks if you act quickly. Here are a few ways to halt this process and avoid foreclosure.
1) Pay Off Your Loan and Fees
A lender would always prefer to have your money than your house. If you can gather enough to cover all the late fees, attorney fees, and mortgage payments at once — you should be able to stop foreclosure and fulfill your entire loan.
Unfortunately, this costly option is not viable for most people. Remember that even in extreme circumstances, never take out a new loan to pay off an existing one, or you will enter a spiral of debt.
2) Declare Bankruptcy
Once you have declared financial bankruptcy, your bank lenders are required to give a stay on your loan — meaning they cannot collect on your mortgage until your case has been settled. However, once the case is over, the lender can still seize your home and demand the full mortgage payment.
Depending on the form of bankruptcy you file for, you may be able to set up a plan for payments with your lender to pay your debts over a longer period of time.
Never file for bankruptcy without consulting an attorney and weighing the pros and cons first.
3) HASP
The Homeowner Affordability and Sustainability Plan (HASP) is a government program in place to restructure mortgage payments. If your debt is higher than your income, apply for this program.
Not everyone will qualify, and the paperwork and bureaucracy make the HASP less efficient than it could be.
4) Sell Your House Fast
By attempting a short sale, you can recover your owed debts and pay off your lender instead of them selling your house. However, you must get permission from your lender before selling your home.
A short sale is a fast way to unload your home, but you will always receive less profit than a more traditional method.
What Happens if Your Home is Foreclosed On?
In general, there are about four steps that occur when you are facing foreclosure from your bank lender.
1) Default
When one mortgage payment is missed, a past due notice is sent to the homeowner. After two missed payments, a demand letter is sent, with a final deadline for total payments.
After 90 days, a Notice of Default (NOD) is placed on the front door, indicating a lender is beginning the foreclosure process.
2) Notice of Sale
A lender must publicly declare the foreclosed home will be up for auction at a specific date. Often a listing of the sale will be published in the local newspaper with the homeowner’s name and date of auction.
3) Foreclosure Sale
During the auction, the lender will award the real estate to the highest bidder. The deed is given to the bidder, who is granted possession of the home immediately.
If there is no acceptable bid, the lender will take possession of the property and work with a real estate agent to sell it on their behalf.
4) Eviction
Once the home is sold, the current homeowner will be given a notice of eviction several days in advance. The local sheriff will come by to make sure the homeowner has vacated along with all personal belongings.
How Long Does It Usually Take To Sell a Foreclosure House?
The clock starts ticking the moment your bank lender informs you your house has entered foreclosure. You will continue to own your property and be allowed to live there until the house is auctioned off and sold.
This period is known as pre-foreclosure, and during pre-foreclosure, you can sell your real estate. Speak to your lender and clarify when your property goes up on the auction block. Every state has different rules and regulations.
Some states do not allow lenders to auction your home until a year has passed, but other states give just a month. The amount of time you have will determine in which manner you sell your home.
But the longer you wait in the no man’s land of pre-foreclosure, the fewer options remain.
The fastest way to sell your property is to sell to an investor who has the upfront cash ready to purchase now.
Ways To Sell Your Foreclosure House
If you have reached the point where there is no turning back, you must figure out a way to sell your home before it is foreclosed upon. How you go about this will depend on your needs and time frame. Let’s break down all the ways you can sell your house.
1) Hire A Real Estate Agent
The advantage of working with an agent is that they will work hard to get you the most money possible for your home. After all, their commission is based on the home’s value!
A real estate agent will even be able to tell you if your property and house are worth enough to pay off your debts and mortgage.
On the other hand, real estate agents are expensive, and you will incur many fees plus their large commission. Plus, you will have to deal with the shifting currents of a buyer’s market.
2) Short Sale
A lender never looks forward to foreclosure. It ends up costing them money, legal trouble, time, and responsibility.
To avoid owning your property, lenders will occasionally agree to a short sale. This is when you sell the property for less than the amount that you owe. A short sale will prevent foreclosure and not damage your credit score as much as a foreclosure will.
If the short sale does not come up to match the debts, over time, you will have to pay the remaining mortgage loan balance to your lender.
Always speak to an experienced attorney before attempting a short sale.
3) Sell to A Private Investor
Investors have cash on hand to purchase your home. You can avoid foreclosure fast by selling your home within a matter of weeks to an investor.
An investor will usually give you a lower price than a buyer on the open market will offer, but there will be no hidden fees, and you will end up with money in your pocket fast. Since it is a lower price, often selling to an investor is a way to perform a short sale.
This short sale will put you at ease and remove the burden of large debts hanging over you.
Conclusion
If you face foreclosure or worry about making your upcoming mortgage payments, Kind House Buyers can help!
We are a fully accredited investment company, ready today to give you a FREE offer on your home. We will not waste your time. You get a single fair assessment without the stress of negotiation, the housing market, or agents.
This is a win-win financial situation, we will even cover any repairs your home needs, sell to us, and we will take care of the rest! We are the answer to the question ‘how can I sell my home fast?’ Begin a short sale, save your credit score, and avoid foreclosure — all Kind House Buyers now.