How Can I Sell My Home While it Is in Foreclosure

When you have received a notification from your lender that you're in default and that it's going to foreclose, not everything is ruined, you still have options to choose from. First option is to try as much as you can to negotiate a deal to help you keep your house. If that proves not to be possible, another option is to declare bankruptcy. Finally, you can also choose to let the foreclosure proceed but mitigate the damages.

The last option, which is the best, is done by attempting a short sale. If you succeed in selling your home, your lender takes the money you were able to generate. So, if you're in this situation right now, just focus on finding a way to sell your home as fast as possible. Even though there are some drawbacks, this step will not hurt your credit as badly as a pure foreclosure and bankruptcy would in situations where you can explain. The only problem with this option is that in case the sale fails to cover the mortgage loan, you may be required by the lender to make up the difference. Many lenders will write off this difference and you'll likely need help getting that in the deal.

For good pricing and to speed up the process, you'll have to choose a real estate agent who is competent and experienced in dealing with short sales. To learn a little more about selling foreclosed homes, keep reading.

Permission

First, seek permission from your lender to have a short sale. While doing this, it's recommended that you talk to someone who is in a position to make a definite decision instead of negotiating with clerical personnel who will be forced to pass the information over to someone else. Explain why you've not been able to pay and try to show them that it's not as a result of being irresponsible. In case the first official doesn't grant you permission, wait for a few days and go try another official.

Work with professionals

Choose a real estate agent as well as an attorney to help you with the sale. The attorney is often selected by your trusted agent. Even though an extra expense is the last thing you want, working with qualified people will help you a great deal. You are not likely to be paying them up front, talk to them so you know how they get paid out of the sale proceeds.

Slightly lower the pricing

Putting the foreclosure houses up for sale can be the hardest thing because you want a price that will address the loan as well as the agent's commission. Before you list the house for sale, let your real estate agent advise you on the realistic price that you can expect to get. Let's face it; trying to sell a house in a few weeks can be very stressful. But many buyers out there normally look for houses in foreclosure because they know the price is not high.

Get approval from your lender

Ask your lender to approve the highest bid you've got. If they do, you can hopefully proceed with your short sale. In case the lender forecloses, the home will be auctioned and the highest bidder will take over the ownership of the property. Some lenders end up having to keep the property or take it back, which is not good for their accounting, so they are motivated to get it sold.

Deficiency judgment

If the sale proceeds fail to pay off the whole mortgage, the lender is allowed to pursue a judgment but you can try to negotiate and if the lender agrees, he may not pursue the deficiency judgment. Better still, you don't owe as much as you did before the short sale and so; even if he refuses to listen to you, your situation is now better.