Would you like to know how to sell your house quickly when foreclosure is imminent?
For many homeowners who have taken out a home loan, one of the top priorities is to avoid foreclosure whenever possible. Unfortunately, too many missed payments on the loan or mortgage can lead to a person facing foreclosure very quickly.
A Little Bit About Foreclosure
A foreclosure is a kind of legal process which occurs when the homeowner misses some mortgage payments. It can also occur if the homeowner breaks the mortgage loan terms.
When this happens, a homeowner stands to lose their home. However, it is possible to cut losses by selling their condo or house fast and covering what they owe. This way, they can stave off the impending foreclosure.
Doing a title search can reveal if there are any other liens or encumbrances attached to the property that need to be resolved.
How to Sell Your Home Fast When Foreclosure Looms
When foreclosure looms, you may get the advice to sell your house fast. With that said, a traditional home sale could take a long time. Since you’re in a pre-foreclosure situation, your real estate agent may tell you to start attracting potential buyers right away.
Not sure how to go about this? The following tips should help you make a quick sale and get as much money as possible!
1. Devise a Relevant Marketing Strategy
Like any other asset, a well-marketed house is likely to attract many more buyers. Putting the home up for sale and marketing is usually the responsibility of a real estate agent. As a homeowner, though, you can take steps to ensure that they take all the right steps.
Remember, most people start looking for a home with an online search. As a foreclosure home, your property should be at the top of all the local real estate listing sites. Your realtor should also have them near the top of their social media accounts.
The Importance of Taking Good Pictures
When you want to sell your house, keep in mind that a lot of pictures will attract potential buyers. People will spend time looking at the photographs, which means there are more chances of an actual house tour. You may want to invest in a photographer for some specialized real estate photography.
2. Staging and Conditioning
When a potential home buyer books a tour, you invest some time and effort in staging the home. The same goes for the pictures on the listing.
Cleaning and sprucing up is a must here, but there’s no need to spend a lot of money. You’re already in a pre-foreclosure phase, so it’s probably not the time to invest in window treatments or a new coat of paint.
What will help is to focus on inexpensive projects that can enhance the overall look of the place. These include:
- Caulking cracks in tiles and walls
- Fixing small leaks
- Patching up holes and scrapes
When you have booked a home tour with some interested buyers, make sure to tidy up the place before they arrive. There shouldn’t be any strange odors floating around and no piles of clothes lying on the furniture or floors. Any kind of mess will be distracting a buyer; it might even cancel out their intention of buying the place.
3. Understand the Minimum Price Range
Even if your home is worth a high price and you owe a lot of money, home buyers are also looking out for their own benefit. If your outstanding loans are more than the market value of the home, you may have to look into a short sale. This is when you fill out a form and consult your lender about how low you can go on the selling price.
Yes, a short sale might be a mark against you on a credit report, but, on the other hand, a foreclosure will be even more of a blow.
You can also ask your lender about any loan modification at this point. After talking to the lender, you can then set your list price accordingly. However, do remember to include closing costs in your accounting. It may help to read up on how to increase the value of a manufactured home so that you have more wiggle room.
4. Use the Right Strategy to Price Your House
When you are looking to stave off the foreclosure process, keep your goal in mind. Many homeowners are likely to have a personal interest in their homes. So, they might be trying to salvage equity where there is none.
Others might try to compare the initial price they paid for their home and want to sell accordingly. With that said, the market value of the home may no longer be the same; it might have gone down.
Be honest with yourself and focus on the goal of making a sale. You don’t want a black mark of foreclosure on your credit report that will last for at least seven years!
Price aggressively and avoid overpricing
When it comes to pricing your home when putting it up for sale, you have to be clear about the required result. A homeowner should be clear that they want to attract people who buy houses. Pre-foreclosure means that you have to act fast and get things moving, not wait around for a better price.
If a home is overpriced, most buyers might not even consider reading the rest of the listing. The matter of a home tour, price negotiations, and other steps simply go out the window. Also, you have much lower chances of getting a cash buyer this way.
Aggressively low pricing in such cases might be the best way to get the attention of home buyers. You want to be realistic about the situation and price accordingly.
The last thing you want is to have the home on the housing market for too long. This will not only put you at risk of foreclosure but also increase the chances of a lowballer finally getting your property at a fraction of the price.
Calculating The Real Worth of Your Home
If you are ready to know how much your home is really worth, ask for a CMA or Comparative Market Analysis. A real estate agent should be able to prepare something like this soon enough.
This analysis will show you similar homes to your own, as well as their selling prices. These homes will also be within your own neighborhood, or not too far off.
When you are ready to sell your home fast, note the sale prices, instead of the list prices, from this analysis report. Take this data from the recent home sales, then lower the average of these prices by around 10 percent. This should give you an idea about a realistic list price.
Even a slight underpricing can result in buyers snapping up a house as soon as it’s on the market. A strategy like this will also get more buyers asking for a physical tour, making it more likely to get a qualified offer soon.
5. Consider Concessions or Perks
If there’s a party interested in buying your home, they might not be able to provide the full amount right away. This is where you can make a quick sale by offering some creative concessions or perks to help out the potential buyers.
Doing so can be an excellent negotiating strategy to put a deal together.
Of course, you will have to get the consent of your lender before making any major concessions or other offers. Once you have them on board, you can offer a lease with the option to buy. However, this requires an ample understanding of legal matters.
In a pre-foreclosure situation, the main aim is to sell the apartment or house fast. It’s nice if you can get a fair price for the home, but this is also the time to get aggressive.
The pricing, condition, and marketing of your home will be the main factors that influence its sale. Follow the tips above to speed up the selling process, and perhaps even attract a cash offer.
About the author: The above article on selling a home fast before foreclosure hits was written by Justin Becker. Justin is a property owner in the state of Michigan and has a passion for managing communities. He owns both apartment complexes and mobile home communities and has been writing his own blogs for his properties for several years.