When your house goes into foreclosure, that presents a lot of challenges and plenty of questions. You might also be in the process of attempting to sell your house and all of a sudden you now have to worry about whether or not foreclosure proceedings will scare away all your buyers. The good news is that you do have options even if it doesn’t feel like it. Foreclosure can be an emotionally taxing and frustrating situation but you should use this time to explore all of your options instead of waiting for the bank to decide for you. If you’re asking yourself, “Can I sell my house in foreclosure in Memphis, TN?” here are some options that you have.
First, What Is Foreclosure?
Before we understand the ways to sell your house while in foreclosure, it’s important to understand what that means. Foreclosure is the legal term for when your lender takes over control of your property so that they can sell it to recoup the money that the owner was unable or unwilling to pay to satisfy the mortgage. So if you miss enough mortgage payments, or just stop making them altogether, your lender will put your house in foreclosure.
In Tennessee, the lender can begin foreclosure proceedings after a loan is unsatisfied for 90 days. You may receive a formal notice of foreclosure and court filings will be made. Foreclosure often happens in Tennessee by judicial action or by newspaper advertisement. Once the lender’s attorney has listed the property for three consecutive weeks in a local newspaper, they often sell it to the highest bidder via auction. That is, however, unless you are able to prevent it from happening with some alternatives.
Try to Sell Before Foreclosure Is Finalized
If you can see foreclosure on the horizon and know you won’t be able to satisfy the outstanding loan payments, you may want to consider trying to sell your house on the open market quickly while you still can. Up until the house is sold at auction or the bank takes ownership away from you, you are able to sell the house yourself.
If you want to do this, you’re likely going to want to work with a real estate agent who understands the situation and has experience dealing with the market in an ASAP sale. They’ll work with you to determine the right price in order to pay off your outstanding loan debts, which can include back payments, penalties, and fees at this point.
Make sure you tell your lender what your plan is and how you intend to pay off the mortgage. There is a decent chance they will work with you on it because they want to avoid foreclosure if they can, too. Ask them to postpone any auction plans and to give you a timeline where you can find a buyer yourself. Be clear about how much time you have to do this as that will affect how you sell, what you price the house at, and how you negotiate.
Consider a Short Sale
As we said, lenders would prefer not to go to the foreclosure route. It brings with it plenty of legal and financial headaches, not to mention the bad PR that can often come with a series of foreclosures in a specific area. So while a short sale probably won’t net them the most money they could get, they might agree to it because it’s the path of least resistance.
A short sale is when you offer a house for sale at a price below the amount currently owed by the owner. It often happens when the homeowner when the value of their property drops by 20 percent or more. Once the lender signs off (which usually requires documentation and reasoning), the homeowner must negotiate a payoff number with the lender and then seek approval on the home purchase from the lender. Ultimately, the lender is the one in charge here.
You may still have to satisfy some number on the loan, but it won’t be nearly as massive as it would have been. Plus, a short sale allows you to avoid a negative hit to your credit score that comes with foreclosure.
Find a Way to Keep Paying
While we are talking about selling your house if you’re in foreclosure, we should consider that it’s possible to be in foreclosure and find a way to work with your lender and avoid losing your house altogether. Don’t be afraid to call your lender and ask them how you might be able to restructure your loan in order to make it more feasible for you to catch up and get back in their good graces.
You might also ask them for forbearance, which means they’ll reduce or suspend your payments for a temporary period because you need to sort out a short-term change to your finances (like a new job).
You could also do an inventory of everything else you own and find out what its value is. If you really don’t want to lose your house, you could sell high-priced items quickly in order to make good on payments. If you own a boat, car, expensive jewelry, or other pricy items, you might be able to turn them into mortgage payments.
Sell As-Is to a Real Estate Investor
If you’re in a position where you’re going into foreclosure and you don’t want to deal with your lender or hire a real estate agent, you can sell your house as-is to a real estate investor or real estate solutions company like Fair Cash Deal. Not only will they work with you on a solution to buy your house in foreclosure or any other financial situation (tax lien, expensive damage), but they will pay you cash for your house quickly. That’s cash you can then turnaround and pay to the lender to satisfy your loan and move forward with your life.
The easy process begins when you contact them and let them know that your house is in foreclosure and you want to sell. They will come visit the property and assess it, taking into consideration the foreclosure situation as well as any other issues. They will then present you with a fair cash offer for you to consider. If you want to move forward, you decide when you want to close and sell the house on your own terms. Then, you get to square your financial situation and step away from all of the madness and problems that come with foreclosure.