For many people who find themselves in the ‘foreclosure’ situation, asking the right questions is crucial and one very important question to ask is, Can I sell my house in foreclosure? And if so, sellers in distress need to understand how to sell a house in foreclosure. As long as the bank hasn’t put up a for-sale or auction sign on your home, your house is still yours to do with as you please, no matter the equity loss. So it is possible to sell a house in foreclosure.
Hence, it is not a wise option to let your house go into foreclosure, which would take many months or even years to complete. So, how do you sell a house in foreclosure? Try a short sale. Lenders prefer a short sale to a foreclosure and would be eager to respond if you have an experienced agent by your side. Here are the steps to take:
- Meet with your lender to discuss the possibility of a short sale. Know that if you don’t default on your loan, your short sale request won’t be approved. Meet with a decision maker in your bank and let him/her know the reason why you need to do a short sale.
- Recruit an agent and a legal professional to assist with the sale. Although money is limited, using specialized help will profit you over time. Unless you have the funds to pay them in advance, discuss the opportunity of paying them from the sale proceeds.
- Set a price. You want a price as near the money you owe on the mortgage as possible, in addition to the agent’s percentage and other sales costs, but that may well not be possible in a fragile market. Speak to your agent about what you can expect realistically, then put the house on the market.
- Present a price to the lender. Present the top bid on the house to the lender for approval. This will be a better option than foreclosure because in a foreclosure auction, the top bid may be way below the value of the house but the lender accepts it anyway since he has to make a sale. Present a good price to the lender and then.
- Talk with your lender about a deficiency judgment. Be sure to clarify whether or not your lender will come after you for the deficiency on the short sale. Your real estate agent will help you negotiate this.