How can you sell your home for cash before you lose it in foreclosure?
Foreclosure can happen for a lot of reasons. Often it is due to falling behind on mortgage payments. It can also be the result of a divorce or separation, inheriting a home, past due property taxes, being hit with liens and judgements, or a home being condemned due to a disaster like a hurricane, flood or fire. Sometimes it is due to someone else committing fraud.
In fact, there a lot more foreclosures happening in some areas today than over the past few years. Many banks and authorities are speeding up the process. The courts are less bogged down now and lenders are more motivated to force foreclosure auctions take over properties than they used to be.
Foreclosure can hit any one. Even multi-million dollar earning celebrities. Don’t be embarrassed by it. Get proactive. As bad as it seems now, it can and will only get worse without immediate action.
Get a Handle on Your Situation
Start by understanding the situation you are in.
You can’t judge and guess your foreclosure timeline based on what others have gotten away with in the past. This is constantly changing. What used to take 3 years many now only take 3 months. As painful as it is, check your notices and be alert to any pending court dates. Remember, you can’t wait till the very last second. You need time to sign a sales contract, provide title to the new buyer, allow them an inspection, get payoffs and and sign the closing documents.
Find out how much you owe
You can speed up the process of finding a buyer and selling your home by getting clarity on how much you owe.
This will include:
- The unpaid principal balance on all mortgages
- Any interest, late fees and attorney fees accrued
- Property taxes
- Any other liens and judgements attached to the property
You can request a payoff from your bank and other creditors, check your statements and the most recent letters you’ve received.
Get to grips with the consequences of dragging your feet
Things may feel hopeless right now. They are not. Though it will get worse the longer you wait to sell. Your credit will get worse, the amounts you owe will get worse, your number of options will get worse and the number of years you will have to wait to start rebuilding credit again will get worse. We’re not just talking about having to pay a little more interest the next time you want to finance a new car. We’re talking about maybe waiting a decade or more to be able to finance something as small as a washing machine or fridge, and being able to get a decent rate on car insurance or a new phone.
If one of your neighbors sells cheap or loses their home in the meantime or interest rates go up and the market gets worse, you might get a lot less for your home or have far fewer buyers to choose from too.
Recognize the benefits of selling your home faster
The sooner you sell the less costs are going to eat up what you can get. Every day until a sale means losing money. Taxes, interest, utilities, insurance, association dues and fines are all being charged daily. Selling your home faster gives you more chance to sell and perhaps put more money in your pocket, while avoiding the worst consequences of foreclosure.
Get an idea of how much your home is worth
Most home sellers and even many real estate agents can be unrealistic about how much a home can sell for in a foreclosure situation.
What you paid for it, or it was worth a few years ago is irrelevant. That can be a tough pill to swallow, but it’s true. What matters is how much it is worth now. That typically relies on the condition of the property (structural soundness of roof, foundations, etc.), how much properties in your area have just sold for and the market. Ignore listing prices of other properties on the market – that is just what they hope to get.
Understand the Pros & Cons of Different Options for Selling Your House
Before you just default to sticking a for sale sign from Home Depot in your yard or listing with a real estate brokerage, make sure you know the pros and cons of different choices for selling your home when you are in foreclosure.
Offering Seller Financing
Advertising seller financing or being able to take over mortgage payments can help you get attention. However, you also have to make sure you can actually live up to your end of the deal. If you agree on a price you have to be able to sell it for that whenever you buyer wants to execute. If you are taking in rents or mortgage payments, you can’t just pocket it and not pay your debts. You’ve got to be able to maintain to avoid a whole lot of legal nightmares.
Listing with a Realtor
There are good Realtors out there. However, working with a Realtor means adding thousands of dollars in costs you have to pay at closing. You get locked into a long contract with no guarantee of a real sale. You may not be able to get out of that, even if you run out of time before the foreclosure auction. You may be required to make repairs, or inexperienced agents may not know how to handle tax, lien and title issues.
Selling Direct to a Cash Buyer
Cash buyers are often savvier. They will typically purchase your house in any condition, and can close in just a few days. There is no guessing, waiting or risking running out of time.
You can now connect with local cash buyers online and get almost immediate quotes to find out how much you can get for you home this week.