My Home Is In Foreclosure – What Should I Do?
My home is in foreclosure – these are words that pain the heart of any homeowner. No matter how long you have owned your home or why you bought it in the first place, chances are you are emotionally attached to the house in some way. Perhaps it is where your children grew up, or maybe your friends live close by you. Whatever the reason, the good news is that there are foreclosure alternatives that can help you get through this difficult time and start over.
Short Selling a Home
Naturally, because of the reasons outlined above, many homeowners are hesitant to sell their home. Others do not understand that they can in fact sell the home, cancel the mortgage and then start afresh financially.
Those who are facing foreclosure in Florida may want to consider putting up the house for a short sale. A short sale involves selling the home for less than what you owe on the mortgage payments. The bank has to agree to this type of sale, as it is the bank that takes the loss on the money. You will need to hire a good real estate investor to help you with this type of sale, as it involves not only marketing the house but also negotiating with the bank, filling out various forms and papers, etc.
While there are a number of banks that resist short sales, most banks are willing to accept such a sale. Remember, there are not only foreclosure consequences for homeowners but for banks as well. Once a bank repossesses a home, it is responsible for the upkeep of the home until it is sold. Furthermore, the home is sold at a public auction and most banks do not make much or even any money off a home that is sold in this manner.
Fast House Sales
Fast hour sales are in fact easier than short sales. Many real estate investment companies specialize in buying all types of housing, fixing the houses and then reselling them for a profit. All a person has to do is call the company, show a company representative around the house and then sign the needed papers.
The downside of a fast sale is that a real estate investment company will usually only offer about seventy to eighty percent of what the house is actually worth. The offer will be even lower than this figure if the house is in poor condition and needs serious repair work. On the other hand, a fast house sale spares the homeowner from having to invest time and money in fixing up the home before selling it.
Another advantage of a fast house sale is that the real estate investment company buying the house will likely have extensive experience with purchasing homes facing foreclosure. The buyer will be able to work out a deal with the bank regarding any loss on the mortgage loan, fill out the required papers, etc. While many individual buyers are put off of buying a foreclosed home due to the paperwork involved, this is not the case for seasoned real estate companies.
Is Bankruptcy an Alternative?
Some individuals facing foreclosure in Florida have opted to declare bankruptcy. Declaring bankruptcy does automatically put a halt to the foreclosure proceedings and in some cases a person may be able to keep the house. However, it should be noted that bankruptcy has not only advantages but also disadvantages as well.
Declaring bankruptcy will wipe out a person’s credit, making it near impossible for an individual to get a credit card or any type of loan. Bankruptcy stays on one’s financial records for seven years and has a lasting impact on a person’s future credit score.
Furthermore, it is important to realize that declaring bankruptcy is not necessarily a sure fire way to get out of bad debts. Creditors can and often do challenge bankruptcy proceedings in an attempt to make the debtor pay back the full debt. There are also certain types of debt (i.e. alimony, back taxes, court imposed fines) that simply cannot be dismissed under bankruptcy proceedings.
If the words, “My home is in foreclosure” are true for you, then you may need to face the fact that it might be better to sell the home and get debt free than hang on to the home and risk losing it anyway. The first option enables you to walk away with a fairly clean credit report; the second course of action will ruin your credit score for years to come. Thankfully, it is not overly difficult to sell a home before the bank forecloses on it. Working with a real estate investor to sell the home via a fast house sale or short sale will enable a person to sell off the house in fairly short time and walk away debt free.