Many people often wonder, “Can you sell a house in foreclosure?” The short answer is yes. Selling it can help save your credit and give you a fast cash infusion for other expenses that may be giving you financial trouble. Foreclosure means that the mortgage company will sell your home at auction to pay off the remaining mortgage debt. If you let it get to this point, the foreclosure will remain on your credit report for up to seven years. We’re going to show you how to stop foreclosure so that your finances remain intact.
What Is Foreclosure?
Foreclosure is the legal process by which a mortgage lender can take back title to a house after the borrower has failed to comply with the mortgage terms. This usually happens when mortgage payments are not made on time.
The foreclosure process in Alabama involves a Notice of Default, a period of pre-foreclosure, and then an auction.
Notice of Default (NOD)
If you have stopped making mortgage payments, you can be certain that you will have a Notice of Default filed against you. This is what sets the entire foreclosure process in motion.
This is also when it becomes public record that your home is in foreclosure, so you will most likely begin receiving an abundance of letters and postcards from investors, attorneys, and agents.
This is the period between when the foreclosure notice is filed and when the house goes to auction. Technically, you can sell your home anytime during this period.
Practically speaking, however, it becomes more difficult the longer you wait. If you wait too long, it may get to a point where it is impossible to keep it from going to auction.
The bank auctions off the house to pay off the remaining balance. Homes in Harvest that get foreclosed on are literally sold on the courthouse steps. We have personally witnessed this happen to people who refused to sell until it was too late, and it is completely devastating.
How Will My Credit Be Affected By Foreclosure?
You can expect your credit to take a massive hit from foreclosure, especially if the house gets sold at auction. If this happens, it can take years to improve your credit score back to where it was.
Not only will a foreclosure on your credit prevent you from buying a house, but it will also most likely hinder you from getting an auto loan or even renting a new home.
We cannot overstate the negative consequences that a foreclosure will have on your future and how important it is to take action now to prevent it.
When Can I Sell My House In Foreclosure?
Technically, while you can sell your home anytime before it goes to auction, you should never wait that long. To sell your house in Harvest, several things have to take place.
First off, a title company will need at least seven days to turn around the title work and get all of the paperwork together. Also, if the buyer will be getting financing, that will take at least a month for their lender to complete the underwriting process.
If you plan to sell your house with a real estate agent, you’ll need to budget about two months for the entire sale to take place.
Another point to consider is that the longer you wait to sell your home, the more mortgage payments you’ll be missing and the more it will take to cure your back payments. This is just another reason to take action quickly.
What Can I Do To Ensure My House Sells Before Foreclosure?
One thing to keep in mind is that it is in your lender’s best interest to avoid foreclosure. The only way mortgage companies make a profit is by loaning money and charging interest. The only way to do that is by helping you avoid foreclosure. The last thing a bank wants is to become the owner of an abandoned, foreclosed home.
However, working with your mortgage servicer can be fairly tricky. You have to know what you’re looking for when talking with them and speak the correct terminology. In our time working with homeowners in pre-foreclosure, we’ve developed some tips for communicating with your lender and increasing your chances of success.
Err on the side of over-communication.
Make contact with your lender and provide them with updates on how you’re progressing toward selling your home.
You cannot afford to miss deadlines set by your lender.
If you even think something might be late, make sure to communicate with them beforehand.
Keep in mind the people you’re talking to are also people with emotions.
Let them know what you’re going through; just don’t be overly dramatic. If they see that you are genuinely seeking to correct the situation, they will be much more willing to work with you.
Make sure to document every interaction with your lender.
You should record account balances, back payment amounts, and any other pieces of information that are discussed. Also, keep a record of who you’re talking with in case you need to reach out to them again.
Weigh out all of the options available to you.
This includes forbearance, loan modification, and selling your home. Depending on your situation, you may be able to significantly slow down the foreclosure if you put in enough effort. Each mortgage company has its own in-house programs that are made specifically for helping homeowners avoid foreclosure.
Time is of the essence.
Like we’ve mentioned, once you begin falling behind on your mortgage payments, the clock is ticking. The more payments you miss, the fewer options you will have.
Should You Sell Your House Before Or After The Foreclosure Process Begins?
It is definitely more beneficial to sell your house in Harvest before the Notice of Default is filed. Although selling your home before it goes to auction will significantly protect your credit score, missed payments and a Notice of Default will still have a sizeable impact on it. Your prospects for opening credit will look much better if you sell prior to the foreclosure start.
Ideally, you should sell before you even miss a payment. Just missed payments on your credit report can have significant consequences. If you are experiencing a financial hardship that puts you at risk of failing to make your mortgage payment, now is the time to consider selling your house.
How To Sell A Home In Foreclosure
If you have the time, one option for selling your home is listing it with a real estate agent. This will get you the most visibility since the real estate agent will list your house on the MLS (Multiple Listing Service). The MLS is where most buyers will be getting information from since that is where their real estate agents will be looking.
If you plan to go the route of selling your home with a real estate agent, there are a few things you must keep in mind. First off, as we mentioned, you need to budget for at least two months to get your house sold.
Once you get under contract with a buyer, it will take approximately one month to get to the closing table. Any time before that, including getting the house ready, marketing for potential buyers, and finding an actual buyer, will only add to that time.
Another point to consider when weighing out your options is that selling to a traditional buyer will likely include all of the contingencies typically included with these types of transactions. These contingencies include appraisals, home inspections, and financing clauses.
If you are running short on time, you may not want to place the fate of your finances on the hopes that your deal won’t fall through…
We Will Buy Your House In Foreclosure!
Contrary to traditional buyers, we have the means to buy your house fast! We won’t hassle you with repair requests or appraisal contingencies. We buy houses from people in your exact situation and know how to get the deal closed quickly so you can avoid foreclosure and save your credit.
If you’re facing foreclosure in Harvest AL or any of the surrounding areas and need to sell your home to save your credit, then look no further.
Contact us today to get more information and discuss how we can help you!