Pre Foreclosure Options?
Has your lender given you a 90 day notice? 30 day notice? Sheriffs sale date? Some of these are delayed lately, but lets break down your options. Don’t worry, in many cases you can still find a solution where your credit is restored, and the property is sold with some money in your pocket hopefully. Lets go over some options.
Typically after 90 days of missed payments, a lender will send a notice of default. This means that they can start the foreclosure process. In some areas, this can be quick, and in some areas of the country this can still take a year or more to iron out. This process gives the lender the ability to start foreclosure proceedings. Just be aware of timeframe so you can plan accordingly. Last thing you want to do is to be blindsided.
The pandemic did delay many of these situations, but if you want some certainty, its a good idea to address options and choose the best option for you and not to be forced by the sheriff to vacate.
If you are past the 90 day notice of default date, but you haven’t received a sheriff sale date yet, it may make sense to see what options you have since you likely have some time.
- You can try a short sale. A short sale is simply trying to convince the lender(s) to accept a payoff of the loan lower than what is currently owed because the home value is less than the amount of the loan and there is some type of hardship by the owner that can be proven and documented. You would want to consult with a short sale realtor. Make sure to find one that specializes in short sales as this will require some attentiveness. This process can be lengthy, often times at least 6 months or maybe more. There will be a lot of documentation needed on your part so keep this in mind. A lot of patience needed. But if you can have a lender accept a short sale, your credit may be damaged a bit, but not as bad as a foreclosure. Sometimes, a foreclosure can stay on your credit report for 7 years, while a short sale can be there for 5 years or less. If you think you dont have that much time, then…
- If there is equity in the home, you can contact a cash home buyer to see if you can do a quick sale on the home. The quick sale on the home would then payoff the entire loan at closing thereby avoiding foreclosure and getting your credit back on track. This is a popular option. Just make sure you are happy with the price, and that you have somewhere else to go to live. This process from start to finish can be 30 days or less. We have had situations where an as is home sale to an investor was completed in 7 days. This can be a great option, if you want a quick close, cash offer as is, fair price where you walk away with some cash, on your terms. To see what cash offer would work on your home, inquire to the right and enter your info and we will contact you.
- Have an investor take over your loan.. In this situation, the investor would catch up the loan first (pay the lender what’s in arrears to get loan current) The investor would then take over future payments on the loan, and make any repairs to the home, pay utilities etc. In this scenario, likely the home seller would have to vacate the property once the investor catches up the loan. This is a great option when there is limited equity on the home, but seller wants a quick close. The investor can come in and take over the loan. Keep in mind here, you want to choose a “partner”, investor that is honest and trustworthy and has experience. When you do , this is a great option that is a win win for both sides. We have completed dozens of these with happy sellers. If you want additional info regarding a loan takeover, contact us today!
- Another option we have seen some success in is listing the property to sell on the market with a realtor. If the property is in good shape, and would pass an inspection, this can be something to think about. We partner with some amazing realtors that can assist with this option. This typically is a good option if the property is in really great shape, because then you can maximize your sales price. If this is an option you want additional info on, please contact us today and we can help. If your property needs any major repairs, opt for the cash investor route option 2.
These are the most popular options. In addition, you can also wait it out and see what happens. There are a multitude of factors here…( do you have a place to go, how much time do you have to move, how much in arrears on loan, what an investor is offering you) It makes sense to explore all options and then pick the best option for you.
If you want to discuss your situation, contact us today. We will glad to help. We are real estate problem solvers and offer many tools in our toolbelt. We don’t only have a hammer (see Maslows quote above in this blog) we have many tools at our discretion to help. Fill in your info to the right and we will contact you.