When facing foreclosure, it might be possible to avoid selling altogether. If you can afford to make a lower monthly payment, it is worth shopping around for refinancing, loan modification, and forbearance options.
If your finances have tightened but your income hasn’t changed (or has changed for the better), consider refinancing at a lower interest rate. When this option is available, a homeowner can realize a substantial monthly savings. For example, refinancing a $350K mortgage from 4% down to 3% saves nearly $200 per month.
If foreclosure appears imminent, it can’t hurt to ask your lender for a loan modification. Your lender will be able to explain any potentially applicable assistance programs, such as the Federal Home Affordable Modification Program, and can check to see if you qualify for a reduced monthly payment. Alternatively, lenders have the ability to take action, such as forgiving a portion of the principle, which could wipe out any currently delinquent payments and possibly lower your monthly payments going forward.
You may be familiar with the concept of forbearance in terms of student loans, and there is a similar option available for mortgages, subject to your lender’s discretion. If you expect your financial situation to improve or know that it is only temporary, your lender might offer you anywhere from a one- to 12-month forbearance, during which time interest continues to accrue but you are not responsible for making monthly payments.
It is always to the homeowner’s advantage to sell their home before it is seized through the foreclosure process. The problem, however, is timing. When a homeowner isn’t planning to sell their home and hasn’t taken the standard pre-sale steps of cleaning it up and making repairs and improvements, it can feel impossible getting buyers in the door, never mind having any realistic negotiating position. With a short sale, the homeowner is able to quickly attract buyers by lowering the sale price below the amount still owed by the homeowner. Assuming a sale is made, the lender forgives the difference between the sale price and the outstanding mortgage, which is why the homeowner must first obtain written permission from the lender. For a homeowner who cannot make their monthly payments and doesn’t have any equity in the house, short selling is a great option because it essentially enables the owner to just walk away. The lender, however, must speculate as to how much it can realistically recover if it goes the foreclosure route, and it will only approve a request for short sale if that speculative amount is greater than the proposed short sale price.
They say moving is the most stressful life event, but moving as the result of forced sale is surely worse. Whether you understand the process or your options for navigating it, facing foreclosure is a taxing time that can best be shortened via direct sell. Real estate investors, including rental management companies, are ideal buyers for homeowners wishing to avoid foreclosure but who have not made the kinds of repairs or updates necessary to sell to a resident buyer. Real estate investors expect to make repairs and updates, so they are less concerned about issues like termite damage that can be a real turn off to the average buyer. They also tend to pay fair prices in cash, which streamlines the sale process and enables the seller to avoid foreclosure. Log onto www.ryansbuying.com and get your direct sale price in 48 hours.
Quick Selling An FHA Homes
If you purchased your home with a Federal Housing Administration (FHA) loan and have owned your home for more than 90 days, your particular type of mortgage should not have any bearing on your options for selling. Where you might have some difficulty in avoiding a foreclosure deadline is being able to sell to a buyer who is trying to use as FHA loan to purchase your home. If the house has any roof or foundation damage, chances are you won’t be able to close in time. If, on the other hand, your home is in exceptional condition and its condition can be quickly verified, you might consider advertising that information as to not deter FHA buyers.
General Quick Sale Tips
Whether you find yourself in a foreclosure situation or up against the clock to sell for another reason, here are a few tips for making that sale quicker:
- Choose your price carefully, but always open your listing above your bottom line. Remember that you are pricing your home to sell, but you want to leave yourself some room to negotiate.
- If you have time, it is worth having your home staged. Not only does this set a better stage for the buyer to imagine their own furniture in the home, it also forces you to have the house cleaned and prepared for the transfer of ownership.
- Host one or more open houses, but be flexible with showings. If you want to sell your home to a real buyer, keep in mind real buyers’ schedules and plan your open houses at times when the most shoppers are likely to make it.
- Respond to buyers promptly. A serious buyer who is looking to act quickly is most likely interested in more than one property. Don’t let interested buyers get away by ignoring them, even for an evening.
- Act appropriately. Real estate sales take time and time is precious when trying to make a quick sale, so act with due urgency at every stage, no matter how minor.
- Skip the traditional real estate transaction hassle and sell your home direct to Ryan’s Buying to receive a fair price for your home in 7 days.