Sell house before foreclosure auction
Updated: 2 days ago
Can you sell a house to avoid foreclosure?
The answer is “Yes.” There are many options available where you can sell your house to avoid foreclosure. Whether you are in pre-foreclosure or have already entered the formal process, you can still sell your house prior to the auction. Though you need to ascertain a number of factors like how far behind you are on payments, if the foreclosure process has already begun, and how much time you have left, etc.
What’s the Benefit in Selling a House Facing Foreclosure?
If you sell the property before the foreclosure, you can pay the lender with the proceeds, including back payments and penalties. Moreover, by selling your house and paying off the debts, you can rescue your credit as well. In the long run, credit damage could prevent you from purchasing a home or even a car for years to come until your credit is repaired.
The best advice most agents give to sellers facing foreclosure is not to wait till the last minute.
What Steps Do I Need to Take?
Here are some steps you need to take before selling your home:
Set a Realistic Selling Price
You need to have your real estate agent prepare a Comparative Market Analysis (CMA) to know the real worth of your house. Your sale price has to match recently sold similar homes in your neighborhood.
Market Your Home Properly
Nowadays, most house hunting starts online. So, your home listing must be on all the top real estate listing sites.
Upload Lots of Pictures
The majority of buyers are not interested in a property that has no pictures. Therefore, you need to hire a professional photographer who specializes in real estate photography.
Clean and Update Your Space
Cleaning up and fixing minor repairs is essential, including a fresh coat of paint.
What Are the Advantage of Selling to a Home Investor?
On the other hand, selling your house for cash to an investor is different. The right real estate investment company could offer the correct solution if you want to sell quickly for cash.
Selling to an investment company can speed up the process compared to selling through a realtor, where it may take six months or more.
An investment company is ready to buy in cash and close the deal as quickly as seven days. This can be quite an advantage, especially if you’re in a situation where you need to sell fast. Like if your property is going to foreclosure auction soon, so you might have other options insteasd of simply loosing your house yo foreclosure.
No Repairs Necessary
If you’re selling a home to a traditional buyer or through a realtor, you need to spruce up your home and spend quite some amount on repairs, paints, etc.
But a real estate investment company will buy your home as-is, in any condition. If repairs are needed, either they will adjust the purchase price a little or get it done themselves.
No Commission Fees
Clearly, a real estate agent doesn’t work for free, and you need to pay a commission on the selling price. But a home investment company does not charge commissions or hidden fees.
Don’t Worry About Cleaning
Traditional buyers will undoubtedly want a home to be spotlessly clean when they move in. You need to spend days cleaning, polishing, and scrubbing a house you won’t even live in. But when you sell your house to an investment company, they will take care of the cleaning process.
If you choose to sell your home before foreclosure, get in touch with Easy Outs Homes for a hassle-free, tension-free, and really fast selling process.
We buy and rehab homes directly from homeowners, and it’s our responsibility to perform any repairs and cleaning required to get a home into saleable condition. Get your payment in cash as early as 7 days.
The short answer is yes, you can a sell a Maryland house in foreclosure. But, you need to have a signed offer on your house before your auction date. Get started by requesting a free CASH offer in the form below!
The Timeline of the Foreclosure Process Maryland
To understand how to sell a house during the Maryland foreclosure process, we must first talk about the foreclosure timeline. Generally, this process has six phases, according to Forbes.
Phase 1: First Missed Payment
When a homeowner misses a payment, the lender could give a grace period of 15 days. If the homeowner fails to pay during the given grace period, they will pay an additional late fee.
Lenders who are more rigid with their contracts may also report the delay in payment to related credit bureaus.
Phase 2: Default
Continuously missing mortgage payments would put a homeowner into default. Usually, lenders consider a homeowner as default if they fail to pay the mortgage after 30 days.
Once in default, the succeeding steps will depend on the type of foreclosure process the homeowner is in. It can either be judicial or non-judicial.
A judicial foreclosure process takes place in the state’s court system because the mortgage agreement doesn’t have a “power of sale.” Meanwhile, a non-judicial foreclosure process gives the lender the power to foreclose a property without a court order.
Phase 3: Notice of Default or Foreclosure Lawsuit
If the foreclosure is non-judicial, the homeowner will receive a Notice of Default (NOD) which states how much needs to be paid, including the mortgage, late fees, and even foreclosure fees. The homeowner will be given 90 days to repay what you owe.
If the amount cannot be paid, the homeowner can ask the lender for a new repayment agreement.
In judicial foreclosure, a foreclosure lawsuit is filed by the lender. The Maryland homeowner must respond to this immediately unless he wants the judge to grant a default judgment in favor of the lender.
Once a response has been made, the case would go to trial and the homeowner can seek legal advice.
Phase 4: Pre-Foreclosure
The time between the issuance of a Notice of Default to the homeowner and the house’s foreclosure auction is called pre-foreclosure.
During this period, the homeowner can pay what is owed or talk to the lender about a possible relief plan or special payment to avoid foreclosure.
If the homeowner doesn’t have enough money to pay or the lender does not approve a new repayment agreement, a good alternative is selling the property. In fact, selling the house during this period is highly recommended.
Phase 5: Notice of Sale
When the homeowner fails to pay what is owed during the pre-foreclosure process, the lender will publish a Notice of Sale in the local paper. The time of the Notice of Sale to the actual foreclosure auction can span from two to three months, but most often, it is shorter.
The homeowner can still sell the property during this period, but obviously, time is of the essence to avoid foreclosure.
Phase 6: Eviction from Home
The homeowner will be issued an order to leave the house once it has been foreclosed. Typically, all the occupants of the property would only be given a few days to vacate it.
If they refuse, the local Maryland authority or sheriff will have to ask them to leave and impound their belongings if they still won't budge.
Can You Sell a House in Foreclosure Maryland?
Yes. You can sell your Maryland home in foreclosure, but unlike selling a typical property, you are bound by time constraints considering the bank wants paid.
Selling a house while facing foreclosure has many advantages, and they are as follows:
Your credit report won’t have a foreclosure record. Usually, a foreclosure stays on your credit record for seven years. That means you will have difficulty securing loans— a huge problem if you need money for medical procedures, etc.
You can buy another property sooner. If you have a foreclosure on your credit history, it would be difficult to apply for a new mortgage. Selling your home would help you avoid this and you will secure new housing right away.
There won’t be any deficiency balance. As mentioned earlier, the bank may ask you to pay for a deficiency balance if the proceeds of the property couldn’t cover the mortgage and other fees. If you sell your home during the foreclosure process, you’ll get enough money to pay the mortgage, especially if you hire a great real estate agent.
Note, however, that when you sell your home while facing foreclosure, everyone has to be on board. By this, we mean that if you have a co-owner, the decision should be made by both of you, not just one person.
Also, you have to ensure that you have realistic expectations when you sell your home.
The goal is to pay off what you owe to your mortgage company by selling the house. And saving your credit. But if the market value of the property is way less than what you owe, you may still face problems even after the sale. This is when you can explore a short sale. There are other options also if you can't sell on the market traditional way when you need to sell your house fast to avoid foreclosure.