If you are trying to avoid foreclosure, a pre-foreclosure sale may be the answer. There are two ways to sell a home in pre-foreclosure, either a traditional sale or a short sale. Both are means to prevent foreclosure.
If you are trying to avoid foreclosure, a pre-foreclosure sale may be the answer. There are two ways to sell a home in pre-foreclosure, either a traditional sale or a short sale. Both are means to prevent foreclosure.
When your lender has send you a Notice of Default or a Notice of Sale, you know the foreclosure process has begun. During this time, you still own the home and can sell it to pay back your debt, protect your credit score and perhaps have some left over. The time you have to sell depends on the state in which you reside.
Typically, you have a grace period of 90 days to either catch up on missed mortgage payments or sell your home. If you owe more on your home than it is worth because the market value has dropped, ask your lender if you can do a short sale. If the lender agrees, it will accept a payoff that is less than you owe. It will also usually give you more time to sell. If you do have a short sale, ask your lender for a written waiver of the deficiency balance, which is the difference between your mortgage balance and your sale price.
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If your real estate value has not dropped, you may be able to sell for what you owe on your mortgage. You probably want to hire a real estate agent who specializes in pre-foreclosure sales because you have little time to sell before foreclosure. These agents can also handle negotiations between your lender and your buyer if you are doing a short sale. To find an agent in your area, go to Reply! now.
To get the best price in either type of pre-foreclosure home sale, make sure to make needed repairs, clean it and the yard, and make the property look. Your real estate agent should advertise your home sale on multiple home listing sites and markets. Depending on how long your home has been on the market, your lender may only approve a certain offers. If you offer a short sale through the Home Affordable Foreclosure Alternatives (HAFA) Program, offers must meet specific ratios to your home value in each sale period.
For the first month, the offer must be at least 88 percent of fair market value. In subsequent months, offers must be 86 percent, then 84, then 82 of your home value. For example, if your home's Fair Market Value price is $100,000, the minimum a lender will accept as an offer is $88,000 in the first month.
When want to sell your home in pre-foreclosure, it's best to seek professional help in addition to doing your own research to make sure you get the most value for your property.