Is it possible to Sell My Bay Area Home while it is in Foreclosure?
“My Bank or lender has notified me I am in default on my loan and is indicating that it is going to foreclose on my house!”
Foreclosure Process Explained
When you receive notice that you are going to be foreclosed upon, your options are limited and can be very damaging to your credit score. Your options are limited but might include:
1. You may be able to negotiate with them, work out a “catch-up plan” and keep your home.
2. Let the lender proceed with the foreclosure and then declare bankruptcy.
3. Let the foreclosure proceed, and try and attempt a short sale. In this situation, you attempt to sell your home for less than you owe. This isn’t as damaging for your credit score. However, there can be many drawbacks to this process, as the lender or bank may still want you to pay the shortfall, in some cases hundreds of thousands of dollars.
4. Talk to us!
“What is the process for a Short Sale?”
Short sales can happen in many ways, this is an example of the typical process.
a. You need to meet with your lender, this is best in person but can be via phone with many banks as the foreclosures may not be handled on a local level. You need to explain the reason for you falling behind and show evidence of any hardships that have happened financially that has given reason to the lapse in payments. The more you can show it was beyond your control and not due to irresponsible spending on your part the better. It is not unusual to be turned down on your first attempt to obtain permission for a short sale. If the answer is no, wait a few days and try again, hope to get a different agent and to elevate your request if need be.
b. When and if you are granted permission to proceed with a short sale, you will then need to find and hire a Real Estate Agent, and Attorney to help you with the sale. Using professionals will help you get the most out of your homes sale, and be able to advise you on current trends and market prices in your area. You may be able to negotiate paying them out of the proceeds of the sale if you cannot pay them in advance.
c. Discuss the current market prices and trends with your Realtor and then set a realistic asking price for your home. Time is of the essence and you will need to sell the house a quickly as possible, you cannot afford the luxury of letting it sit on the market waiting for the “right” offer. Remember there will be the Real Estate Agents fees and other costs to pay, so you need to be as near as possible to what you owe, but with the market still recovering from the crash that may not be possible.
d. Once you have offers, you will need to forward them to your bank or lender and see if they will approve a sale at that price. The banks will usually work with you as it is in both your interests to sell the home rather than foreclose and have it go on auction, that would result in a sale to the top bidder, no matter what the short fall.
“What is a deficiency Judgement?”
Once a house sells, in many states the lender or bank can come to you for the shortfall on the sale price to what you owe. In California that is not always possible in most cases, but in some, it can apply. If the foreclosure is a “nonjudicial foreclosure” then the primary lender may not pursue their losses from you. In a “Judicial” foreclosure they can in some circumstances. Most foreclosures in California are nonjudicial, but not always so be aware of your situation.
“How can you help me avoid all this?”
We will work with you to purchase your home, before foreclosure or even during, to get rid of the stress of the situation and hopefully even put cash in your pocket! Contact us as soon as possible by either filling out the form above or calling us now on 510-570-1959.