The short answer is, Yes! Selling your home can prevent a foreclosure from going through. When you sell, you’re protecting your credit history and making it easier to secure a new mortgage in the future. Depending on how much you owe on your mortgage, selling the home before foreclosure may be the perfect solution.
Even in the worst case scenario, selling your home can drastically reduce the debt you owe your lender.
Act Before Your Lender Does
Depending on the action your lender has taken against you, they may have started an auction or a short sale process. The court may allow your lender to sell your home and come after you for the difference.
Homes in foreclosure auction generally go for much less than they’re worth. Starting the sale process as soon as you receive your foreclosure notice can give you time to find a buyer who is willing to pay the most.
Don’t Fall Victim to Foreclosure Investment Scams
There are some private investors that advertise they’re available to purchase homes in foreclosure. Some of them may even claim that they’ll allow you to live there.
Basically, these investors can become your landlord, and your rent will probably be higher than the mortgage you couldn’t afford in the first place. From there, these investors can legally evict you from the property, as they are now the owners.
Some investors will provide you with bottom-of-the-barrel offers, assuming you’ll take these staggeringly low estimates because of your dire situation. You’ll sell your home for substantially less than what you owe, and still be responsible for a huge debt with your lender.
How much can I sell my Home for before a Foreclosure?
You can sell your home for as much as anyone is willing to pay for it. This is great news if you don’t owe very much on your defaulted mortgage. If you owe $40,000 to your lender, and your home is valued at $300,000, the difference belongs to you.
You’re only responsible for paying your lender the full amount you owe, as well as any interest that applies to the loan.
You may not be able to wait for a buyer who is prepared to offer $300,000 in cash before your foreclosure is finalized. In this scenario, it may be better to sell your home for a lower price.
Can I sell my home for less than I owe?
If you owe more than your home can be sold for, the situation becomes a lot different.
It still may be worth selling, but you won’t profit much. If you owe $200,000 on a home that’s depreciated in value by $100,000, you’ll have a difficult time short selling your home.
Even then, you’re still out a significant amount of money.
If you plan on going the Short-Sale route, sell the foreclosure property for as much as you can get, and hand the money over to your lender. You won’t get anything out of the process, but your debt will be drastically reduced.
Let’s get together to discuss your options and review options that work for you.