If you’ve received notice that your home is in pre-foreclosure, you don’t have to withstand the agonizing process that it starts. You may be able to sell your home up until the day it goes to auction. The actual pre-foreclosure phase lasts anywhere from three months to a year. This gives you ample time to sell your home and avoid a complete foreclosure.
Keep reading to learn how you can sell your home if it’s in pre-foreclosure.
Work With a Realtor
Your first step should be to work with a realtor experienced in foreclosure sales. The right agent will help you decide on a fair asking price. Your price should cover the cost of the past due payments, outstanding balance, and any legal fees you’ve incurred thus far.
If the agent determines that your home isn’t worth enough to cover this amount, you may have to ask your lender for a short sale. While it has the same idea as selling a home in pre-foreclosure, the lender allows you to sell the home for less than you owe.
You must work closely with the lender in a short sale, though. The lender must approve the chosen offer. If you do it right, the lender will accept the lower amount as payment in full. They then mark your credit report with a short sale rather than a foreclosure. The damage to your score may be less severe.
This is why working with a realtor is crucial. A realtor can give you honest feedback on the home’s value. He or she can also help speed up the selling process, ensuring that you sell the home before it goes to auction.
Find an Investor
If you are nearing your auction date, you may want to find an investor to buy your home. Investors are usually cash buyers. They don’t have to wait for the bank to provide underwriting approval. Banks can take anywhere from 30 – 45 days to approve a loan. A cash buyer, on the other hand, can close on a deal in a week or two.
Investors usually want to have an inspection completed as well as pull the title work to see what liens exist on the property. If everything looks good and cash buyers have the cash readily available, you can close on the purchase quickly. This can help avoid the full foreclosure process.
Work With Your Lender
If you are in the pre-foreclosure process, stay in contact with your lender. Let them know that you are trying to sell the home before it goes to auction. The lender will give you the full amount you need to pay in order to wipe the slate clean. A few of the fees you may owe include:
– Back mortgage payments
– Legal fees
Lenders often postpone the foreclosure process if they know you are actively trying to sell the home. They will do their due diligence as well. They can determine an estimated value for your home. This tells them if it makes sense to let you sell the home or if they will need to settle on a short sale. Lenders typically do whatever is necessary to avoid foreclosure, as it’s a lengthy and expensive process for lenders too.
Sell the Home As-Is
Since you didn’t have the money to keep up with your mortgage payments, you probably don’t have the money to fix up the home either. Advertise your home ‘as is.’ This eliminates the risk of attracting buyers that want everything in the home perfect before they buy it.
Your buyers may still have an inspection completed so they know what to expect out of the home. Advertising it as-is, though, lets them know that you won’t negotiate any repairs.
Selling a home in pre-foreclosure doesn’t have to be stressful. Get with the experts, including a reputable realtor and your lender to get the process going. Your lender may be more help than you realize because they want to avoid the foreclosure process too. If everyone works together, you can avoid letting your home go to auction and living with a foreclosure on your credit report for the next seven years.