Most homeowners do not bother learning about foreclosed homes because they assume that they will never face foreclosure. Unfortunately, many homeowners deal with this burden and the struggle of selling a house that is facing foreclosure ever day. Foreclosure happens when someone who buys a house with a loan like a mortgage isn’t able to make their payments or is unwilling to. Once this happens, the bank will usually start sending warnings, and then will start adding penalties. If these additional warnings and penalties are ignored, or simply can’t be paid, then the bank will look to seize the property to cover the amount owed. Fortunately, homeowners facing this situation can stop the foreclosure process by selling their homes. Keep reading to learn how to sell a foreclosed home.
Learn How It Works
Up until the point that the house is sold at auction to cover the bank’s fees, you have the option to sell the house to cover the loan and any penalties that may have been accumulated. In some cases, you’re also allowed to get your house back by ‘repurchasing’ it in a time between 30 days and over a year, depending on your state. If you can cover all of the fees, you can either sell the house to a buyer, or take the home back.
One of the main benefits of selling your house to avoid the foreclosure going through is that it will prevent a significant negative impact on your credit rating. If the foreclosure goes through and you completely default on your loan, it will be tough to rebuild your credit score, so that you can lend again to purchase a new house. If you can sell your house before the foreclosure happens, you can at least look to buy again once your financial situation is in a more stable place.
Speak With Your Lender
After you understand the foreclosure process and how selling your home can stop it, you need to speak with your lender. Bring up the idea of a short sale. While most lenders try to avoid agreeing to short sales, many do in times of desperation. After all, a short sale entails selling property for less than what is owed. The reason that lenders sometimes agree to this term is because foreclosure leads to both a loss in capital and time. When a home is foreclosed on, lenders have to put time into that process itself along with selling the property themselves. Convince your lender to agree to a short sale by pointing out the time they can save. Then, you will sell your home without damaging your credit score. This is a key element to understand how to sell a foreclosed house.
Find An Estate Agent
The next step to sell a home facing foreclosure is to find someone that can help you sell. Hiring an estate agent will give you someone to ask questions and negotiate on your behalf. You’ll be able to speak to them about your situation and work out at what price you need to sell your house to cover your costs. They will also be able to negotiate with your bank to try to lower the amount that you need to pay if it can be done in a short amount of time.
Find A Cash Buyer
If you need to sell the house quickly, a cash home buyer may be the best choice. These companies will generally not have any fees to estimate the value of the house, and because they buy the property with cash, the sale can go through very quickly. They know how to buy a foreclosure properly and profitably. However, this choice needs to be thought through. A cash seller will usually buy the property at 10-15% under its market value. You need to be sure that the amount you’ll receive from the sale will be enough to cover your loan. Other options should be looked at before this if possible, so make sure to talk to your bank about restructuring your loan, or see if you can cut costs and get back on track with your payments.
Homeowners facing foreclosure avoid worsening their credit scores by selling their homes in the midst of the foreclosure process. In order to do so, first gain a clear understanding of how foreclosure work. Then, speak with your lender about agreeing to a short sale. Once you have your lender’s approval, find a talented estate agent to assist you in selling your home. Finally, find a cash buyer to purchase your property. Follow these steps to properly sell a foreclosed house to avoid bad credit.