Can You Sell Your House Before Foreclosure?
It’s an unfortunate situation when any property goes into foreclosure. However, it can happen when homeowners are delinquent on enough mortgage payments. Eventually, the bank will legally have the right to seize the property, and you may have no choice but to move out. So, the big question is:
Do you have the option to sell your house before it is foreclosed upon?
The answer to this may vary depending on your specific mortgage situation (how much you owe on the loan, how far you are behind on payments, etc.) and the timing. If the bank or lender has officially started the legal process of foreclosure, you may be too late. If you are in “pre-foreclosure” and just getting warning notices that foreclosure may be imminent, you might have more options to explore.
What to Do if Foreclosure is Imminent
If you get a pre-foreclosure notice from your bank, the first thing you should do is contact them immediately. Ignoring the warnings and continuing to miss payments will not improve your situation. It is smart to contact them directly and let them know what’s going on. Maybe you lost your job recently or encountered other unexpected financial hardships (a major family medical emergency, for example). Talk with them and see if you have any options available to you. There may be relief programs offered by them or the government that can help you out temporarily. There may be restructured payment plans that will help you get caught up with something you can still afford from month to month.
It’s important to remember that the bank doesn’t want to foreclose if they don’t have to. They stand to lose money by the time they through the legal proceedings, seizing the property and then reselling it—usually at a very discounted price. They may be willing to work with you to find a solution if you are willing to work with them.
What is a Short Sale?
One option the bank may present is a “short sale.” This is a solution that allows you to sell your property with the bank’s assistance in order to pay off as much of the remaining mortgage loan as possible. This is common when the owner is upside-down on their mortgage, meaning they owe more than the house is currently worth. This is less common in today’s market where home prices have been going up steadily for many years.
Sell Before Foreclosure
Because the market is currently strong for home sellers, you may be able to sell your house before the foreclosure process begins. Whether you’ve gotten notices from your bank or you just know that you are falling too far behind on mortgage payments, you can preemptively sell your property to the highest bidder. This is a way to get out from under your debt and avoid the negative credit effects that come with a foreclosure.
You can spend some time and money if you want to sell your house on the open market. This will net the highest selling price. However, it will not be the fastest or cheapest option. Foreclosure could creep up on you before you have a chance to prepare the house, hire a real estate agent, list it, market it and listen to offers.
For a fast, easy and safe home sale, you will want to consider a cash transaction. Find a local real estate investor or work with a home buying company like PropertyLark. You may not get the highest sales price, but you will be able to close quickly and avoid foreclosure.
Whether you are in financial distress or want/need to sell your house as soon as possible, contact PropertyLark today. Fill out the contact form to the right to get started and receive a fair cash offer within 24 hours.