Tell your bank/lender that you want to list your property for sale. Sometimes they’re willing to postpone the foreclosure to allow you time to sell it.  You’ll still be given a time period, so if you choose to sell it, you should make the decision before you are too far behind. That way you’ll save money in interest rates and fees.

If you’re running out of time, you may consider selling to an investor. They can usually close quickly. That way you can handle the problem quickly.  Some investors will even allow the homeowner to still live in the property and lease it after the sell.

There are a lot of quality companies, like HouseSoldRealEstate.com, who specialize in buying and selling homes. This is an excellent solution when you need to sell your home quickly.  They buy your home “as is.,” and they usually close quickly. They can keep you from going through foreclosure and save your credit rating. When you choose this option, make sure you search for a reputable company. They should be registered with the BBB and have closed millions of dollars in real estate transactions. This will help assure that the company is experienced and reputable.

If you go through foreclosure, you could end up with nothing.  You’ll have no home, no money, and a poor credit rating. This can be very difficult to overcome. Selling your home, even if you don’t want to, will be much better for you financially than foreclosure.

Working with a company like HouseSoldRealEstate.com will keep you from having to go through the hassle of home repairs or remodeling, marketing your home, and trying to wade through paperwork on your own. If you do attempt to sell it on your own, however, Make sure you market it well and try to get the highest possible price. The internet has made it possible to list your property online for other buyers to find it.

No matter what you decide to do to avoid foreclosure, it would be wise to consult with a real estate agent or attorney. They can guide you through the difficult process.  You may feel you don’t have the money to pay an attorney, but an hour or two with one may be worth the sacrifice if it keeps you from dealing with problems that may arise during the sale. They can give you good advice.

1- Restructuring Your Payment Plan

Lenders have different policies to work with defaulted homeowners. Sometimes they have plans that reduce your mortgage payment, and then allow you to pay back the defaulted amount over an extended period of time. The cost to foreclose on a property is high. Sometimes it costs banks thousands of dollars. This gives them incentive to work with you to negotiate restructured payments.

Make sure you get your restructured payment agreement in writing and read it thoroughly. Also, make sure you understand what you’re agreeing to and the consequences if you fail to meet the agreement.

2- Refinancing  Your Loan

You can sometimes save more if you actually refinance your loan or take out a second mortgage. Make sure you research all your loan options. You may find that your payments will be lower if you refinance. This will, of course, depend on the amount of your balance and the length of term. It will also be easier to get a loan or a second mortgage if you have a lot of equity.

Your bank/lender may have special offers if you’re already a customer, so ask them first. Check around and compare terms. Your bank/lender may be willing to postpone the foreclosure if you show them you are working to resolve the problem.

Make sure your balance is budgeted—The main problem you have if you are in default is a lack of money to pay the mortgage.  It is important to do a real disciplined examination of your family budget.  You may think you’ve done all the cutbacks you can do, but take another look.  You can also spend less money in other areas.  If it’s feasible, you may try to increase your income by a second job or selling items you have at home perhaps on ebay.

Usually homeowners aren’t spending money excessively if they’re having difficulties.  Still, go beyond that and carefully examine your family’s everyday spending over the course of a week or two. You may find additional areas that can save money.  Make a list of your monthly bills and prioritize them.  You should consider discontinuing things that are for luxury items.

Sometimes people fall behind because they lose their job.  If you can work, try to find a job, even if it’s a temporary part-time job to help you make the payments.  You may be overqualified for it and it may not pay what you’d like, but it may be a means to keep your mortgage payments up to date.

Sometimes you can find a short-term source of income like loan from a friend or relative.  You may also be able to use a credit card.  Only do this if you have a good chance to pay the money back soon.  It can have a lot of fees you have to pay.

It’s never good to put yourself further in debt if there’s no chance to get out, but it is good if you’ve been out of work and gotten behind, but now you’re back to work and just need to catch up.

Once you miss your mortgage payment, your bank will know you’re in default.  Don’t sit around and wait for them to contact you.  Take the first step yourself.  Call them right away.  If you wait for several months for them to contact you, the situation will be much harder to resolve.  You make the first move.

When you contact the lender, don’t get all upset and frantic.  Remain calm.  Simply tell them about your situation.  Ask if they have any suggestions as to what to do.  In this economy, people default every day.  Your lender deals with defaulted customers on a regular basis.  Because of this, they can often give you solid advice. It takes a bank or other lender a lot of money and time to go through the procedures to foreclose on a property.   It’s not something they like to do, so they may be open to alternative suggestions as well.   Many people are afraid or embarrassed to talk with the lender about their situation.  Don’t be.  They’re there for you as a customer, and they want to help you if they can.

It is important, however, that if you do make an agreement with the bank or other lender, you stick to it.  If you work out an agreement with them, ask them to provide it in writing.   This will protect you in case they don’t hold up to their end of the agreement.  You can’t count on the lender always acting in your best interest.  It is best to have any agreement reviewed by a real estate attorney before you sign it.  If you can’t afford one, which may be the case, you can contact a local housing counseling agency.  You’ll want to look for one that is approved by the U. S. Department of Housing and Urban Development.   You can to their site, www.hud.gov to find one in your area, or call 800.569.4287.

Once your mortgage is in default, if you don’t work out a plan with your lender, the lender will take the necessary steps to schedule a public foreclosure auction for your property.  This can happen very quickly.  In some states, it can be in less than a month, and in others, more than a year.  Either way, it is imperative that you know exactly how much time you have before you lose your home.   Knowing the deadline will help you better take control of the situation and meet your goals.  The shorter the time period, the fewer your options will be, so knowing is critical.

When you contact the lender, ask them how long you have to stop a public foreclosure sale, and what you can do to stop it.  Although most states state that your lender has to rigorously attempt to notify you of any public foreclosure sale, you can’t rely solely on them to do that.  Make sure you have everything under control.

The foreclosure sale date isn’t exactly the deadline.  There are other deadlines in the process that are important.  Sometimes the homeowner has to appear in court during the pre-foreclosure process.  In this case, the judge decides when and if a sale will take place.  Make sure you are aware of these procedures and attend with your attorney if you have one.  You can find out the deadlines in your state online, so make sure you do a Google search about that.

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• Don’t act at all—Sometimes homeowners are in denial, and choose to do nothing, instead of acting quickly to help solve the problem. They could also be paralyzed by fear of losing their home.  Whatever the reason, inaction isn’t the answer. You need to consider the consequences of your missed payments, and try to find out what options are available to you. You can’t wait too long, or your home may go into foreclosure and it will be too late to do anything about it. So never procrastinate…take action early to try to stop the default early in the process.
• Don’t overreact—Sometimes people can become frantic when faced with missed payments and feel they are going to lose their home. They look for the quickest way out of the situation. When this happens, they may not weigh all their options. This can cause them to be taken advantage of. This sometimes causes them to lose their home and still be held responsible for the debt. To help insure that doesn’t happen, try to remain calm and rationally look at all options.

Either of these two examples are human reactions, but don’t help with facing defaulted mortgage payments. What you should do when faced with this tragedy, is take the time to consider all the options available. After you do that, act decisively before you are faced with the situation where losing your home is the only option.  Make decisions while there are still options available.  You need to contact your lender, know the deadlines, consider your alternatives, and consult a real estate professional if selling is the chosen option.

* BANKRUPTCY: This, by law, permits an individual to start over.  It gives you a “clean slate.”  When you file bankruptcy, you must surrender your assets.  There are certain household and personal exemptions you can keep.  The assets are used to pay off creditors.  The amount is less than what is owed.  This legally relieves you of the debts, and you are free to start over.

* FORECLOSURE:This occurs when a homeowner defaults on mortgage payments.  Then, the bank “forecloses” on the property.  The mortgage and the property ownership are transferred to the bank for resale and satisfaction of the debt.   Like with bankruptcy, this can take many years for your credit rating to recover.

* SHORTSELLING: This requires no legal action such as a bankruptcy filing or a foreclosure proceeding.  Usually, a homeowner who cannot continue to make payments or who needs to sell contacts the lending bank and requests they buy the house and request they “forgive” a portion of the money owed in order sell.  You don’t necessarily have to be behind on the payments for the house.  Usually, however, the bank will not consider the short sale unless you convince them in your hardship letter that you’ll not be able to afford any future payments.

Of these three, short selling has the least effect on your credit rating.  The process keeps you somewhat in control.  You select a broker and a lawyer to represent you in the sale, and then market the home to the public.  You must disclose to potential buyers that the sale will require a third-party approval from the bank and that can take time.  Sometimes buyers aren’t flexible or patient for a short sale, because it can take months longer than a usual sale.When you do find a buyer, the contract is written and sent for the bank’s approval.  Once it is signed, it is sent to the bank with additional paperwork showing the seller’s financial hardship and their inability to pay.  Then the sale is reviewed by a negotiator.  Sometimes they request that vendors or creditors reduce their fees to make the deal better for the creditor bank.  When everyone agrees, the mortgage is extinguished and the homeowner is relieved of the debt and any other obligations of the sale

The process of short selling is not for everyone.  When you’re buried with financial hardships and are facing the necessity to sell your home, however, it can be that light at the end of your tunnel that leads you out of the darkness financial burdens can cause.

•    Deal With Professionals Only

Using professionals who have an established history of home buying, such as HouseSoldRealEstate.com, is imperative.  A true professional is the one who has been in business for a long time.  They need to have a record of closing millions of dollars worth of real estate transactions. They will treat you fairly throughout the home selling process as they wouldn’t do anything that can harm their business.

•    Research the Buyer

Always check out the buyer.  Especially if you have any concerns. You can do this by contacting either your state Attorney General’s office, the Real Estate Commission for your state, or the District Attorney’s Consumer Fraud Unit in your area. The Better Business Bureau will also have information on established businesses.  You want to work with a company that is listed with the BBB and registered with the State in which they are doing business.  HouseSoldRealEstate.com is listed with the Connecticut Better Business Bureau and registered with the State.

•    Walk Away if You Need to

If there are any doubts about the buyer or if something doesn’t feel right, you can simply walk away. Selling your home a little quicker isn’t worth the problems that can arise.

•    Understand What You’re Signing

Often, people are afraid to ask questions.  If you don’t understand something, ASK!  If you don’t, it could cost you tens of thousands of dollars or even more because the deal wasn’t what you thought it was. You can have an attorney or your mortgage company to help you if you advice.   The thing to remember is ALWAYS understand a contract before you sign.

•    Make Sure Your Agreements are in Writing

Verbal agreements can end up being a “he said, she said” issue.  If your agreement isn’t in writing, you may have to go to court to settle disagreements.  Make sure all the terms are in writing before you agree to them.

The circumstances or the need to sell quickly often cause homeowners to throw caution to the wind.  Your home is a major asset and a large financial obligation.  You can sell your home safely and successfully by following the above tips.  They will help insure that your home sale is done right!

HouseSoldRealEstate.com provides ethical and high quality services to homeowners throughout the Connecticut area.  They are registered with the BBB and you will find that their practices are transparent, fluid, and ethical.  If you’re not in the Connecticut area, please feel free to contact HouseSoldRealEstate.com and we will be happy to give you a referral for a reputable company in your area.  This way, your home sale will be safe and successful.

If you find this post to be helpful, don’t hesitate to share it.

It was a pleasure doing business with you and Housesold Real Estate.  As the Seller of a house in Wethersfield, CT, and you as the Buyer, I appreciate the quick response from you and the short time for closing.  There was no mortgage needed and no inspections necessary, so this allowed us to close within three weeks.

It was helpful that I could remove just what I needed and wanted from the house and that you would take care of the rest.  I didn’t have to bring anyone in to clear out the house.  You were very accommodating during the complete process, from the execution of the contract through to the closing.

Again, it was pleasure doing business with you and it was nice to meet you.

Take care,
Susan

Estate sales are similar to auctions.  They can be used when there’s a death, a necessary long-distance move or divorce.  Whatever the reason a owner sells their home, an estate sale can be a good way to get rid of unwanted possessions.  For the shopper, they’re often a great place to find bargains, antiques and unusual items.

Estate sales are run by a professional company, and the goal is to sell all the items remaining in the home.  In most estate sales, the public is invited into the house and can browse through everything there.  The prices are generally clearly displayed on the items, but it’s often possible to bargain for lower prices.

The use of these professionals has helped  us tremendously.  We’re used to having to pay to get rid of things we don’t need and now we have people  give us money for items that they remove from the house  …… a “win-win”.

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