There were just under 300,000 foreclosures in the first half of 2019. This is a significant drop since the height of the financial crisis. Unfortunately, that number means that there are still people going through the devastating experience of losing their home.
One way to avoid foreclosure is by selling a home in pre-foreclosure. But the process is a bit more nuanced than just selling your home. Use this guide to know what you can and can’t do when selling your home during pre-foreclosure.
You Can Sell at Any Time
For most states, you can avoid foreclosure by selling your home at any time before the home is sold at auction or the bank takes possession. You’ll then need to use the sale proceeds to repay the lender everything you owe plus any additional penalties and fees.
You Might Be Able to Use the Take-Back Option
Depending on where you live, you may or may not be able to use this option. If your state allows it, you can repurchase the home within a specific time period after a foreclosure. For some states, it’s as short as 30 days, while others you have up to two years.
You Can Avoid the Hit to Your Credit
The most significant advantage of selling your home in pre-foreclosure is that you can avoid foreclosure and the hit to your credit.
You Can’t Force Delay Foreclosure
While you can let the lender know of your intentions to sell, the lender doesn’t have to delay foreclosure and give you additional time. In some states, the lender can auction off your property in as little as 30 days.
You Can Sell Your House for Cash
If time is running out and the foreclosure is imminent, then start looking for a local we buy houses company. These companies can give you an immediate cash offer and process the sale paperwork quickly. Just be sure your offer is enough to cover the amount you owe.
If it doesn’t, you need to contact your lender first. Negotiate with them to accept the sale amount as satisfaction for the loan. You need to have this agreement in writing before the sale, or you risk still owing the remainder after you hand over the short sale proceeds.
You Can’t Avoid the Lender
The worst thing you can do is avoid the lender completely. You need to keep them informed of your intentions to sell. If the lender can’t get a hold of you or can’t find you, then they’ll move forward with foreclosure proceedings.
You risk missing your window to sell because you failed to communicate with the lender, and they foreclosed before you sold.
Expertly Navigate Selling a Home in Pre-Foreclosure
By keeping these things in mind, you can expertly navigate selling a home in pre-foreclosure. This will help you avoid going through the entire foreclosure process or selling your home and still owing money.
If foreclosure isn’t a problem on your radar, then browse our luxury listings and find the perfect property for you to invest in.