If you have a mortgage backlog and you don’t see an improvement, you may think that the only way out of this mess is to sell your home. Can I sell my house before foreclosure?
What is exclusion?
Simply put, foreclosure occurs when you are unable to keep up with your mortgage payment and fall behind.
- Thanks to this, the lender can finally take over the house.
- In some cases, you can voluntarily return the property to the lender.
- In other cases, you can try to keep ownership of the property as long as possible to bypass the default.
Can you sell the house if you have an outstanding mortgage?
Whether or not you can sell your home before foreclosure will depend primarily on whether your home is worth more or less than what you owe your mortgage.
If you have a loan arrears but you are not yet underwater – which means that the fair market value of your home is higher than what you owe your loan – you can sell your home and use the profits to pay off the lender.
If you choose this route, you will do the same as usual to sell the house: you will find an agent (here’s how to find a real estate agent in your area), accept the offer and fulfill any eventualities before closing the sale. You usually don’t need to get the lender’s permission to sell your home this way.
However, if your home is worth less than what you owe from your mortgage, you will have to sell your property as a short sale to avoid foreclosure. The caveat is that your bank must be on board this type of transaction.
Sell your home before the deadline
Technically speaking, you are still the homeowner until the lender puts you up for auction. However, you don’t want to wait that long to make your move. As soon as you know that you are going to exclusion and you do not have the means to save yourself, you need to find the right buyer.
You need someone who can pay in cash and can buy a house immediately.
Many homeowners who are trying to stay ahead of their time decide to sell the house to a real estate investor. Real estate investors are private buyers who already have the funds, which dramatically simplifies the sales process.
Since there are no agents to meet, there are no fees or commissions associated with this process. In addition, real estate investors cover all closing costs for you and can close the deposit in just a week.
They will often negotiate with your lender on your behalf to push through the contract before the process goes on. This removes a serious headache and allows professionals to deal with troubles.
House sale in foreclosure
It’s good to know that you’ll continue to own the home until the lender puts it up for auction. This gives you some time to find a buyer and pay off your mortgage before official closing. If you have started to have payment arrears, there are a few things you can do before putting your house up for sale:
- Ask for loan restructuring
- Ask for your understanding
- Eliminate other assets