A foreclosure is the legal process undertaken by the lender when you have defaulted on your loan. The lender will take ownership of your home when, you, the homeowner fails to make payments or has violated the terms of that mortgage loan.
However, for buyers, it is an opportunity to get a good deal on a new home, as trying to sell a foreclosure usually means selling at a lower price compared to the actual value of the property.
Remember most lenders don’t want to foreclose on your property because it’s a time-consuming and expensive exercise for both parties involved. But in the eventuality of receiving a foreclosure notice from your lender, you do have some options; Here are some simple tips to guide you.
1. Talk to your lender
It will be useful for you to go to the lender and discuss your payment options. Explain to them why you have fallen behind in payments and be open about your current financial situation. Discuss the options you may still be having in spite of the foreclosure notice. Some lenders may extend the timeline you have to clear the mortgage payment. And, if you are able to qualify for a short sale, make sure you have all the documentation from the lender on that amount you are approved to sell it for.
2. Get an attorney or real estate professional
Recruit some professionals to help with the sale. I know it may seem unreasonable to seek professional service especially when the money is tight. But in the long run it’s actually beneficial to go through a professional with your sale. If the money is not there to pay the attorney or agent upfront, discuss other payment options like paying them out of the proceeds of the sale. The agents and attorneys have more networks that can facilitate a quicker sale, thus saving you loads of precious time and money too.
3. Negotiate a Short Sale
A seller may be able to negotiate a price below the outstanding balance of seller’s mortgage(s). As stated before, due to the circumstances of the bank and/or the lender, a seller may compromise to a level where they can negotiate a price below the outstanding balance.
4. Do your research
There are a number of other options as well – make sure you do your research. Know who you’re working with, what the lender’s terms and conditions are, etc. Depending on your circumstances, there are additional options you can investigate. Any qualified real estate professional can help, specifically one with foreclosure and short sale experience.