If you’re financially stressed, in default or about to default on your mortgage – you may be considering selling your home to preserve your equity and avoid foreclosure.
If you have money in your home, selling can be a great option to remove yourself from a stressful situation, receive funds, and relocate to a more affordable situation.
While this may be a good option for you, it can be stressful to manage all aspects of the sale yourself.
The best thing to do is to hire a Distressed Home Sale Manager to help you navigate the process but if that’s not an option for you – below are the things you can do to help yourself make it through the process.
- Find out your exact foreclosure timeline, continue to track your sale date and monitor any new notices issued. Do some research online or consult with a foreclosure attorney in your state so you fully understand how much time you have before you will be facing a foreclosure auction date.
- Understand when you may become eligible to take advantage of foreclosure mediation or other foreclosure protections in your state. Some states have laws that allow homeowners to take action to stop or slow down their foreclosure timeline.
- In Washington, we have the Foreclosure Fairness Act which allows eligible homeowners to request foreclosure mediation, stop the foreclosure, and mediate the situation with their banks.
- Order a title report on your home right away – review any other liens or judgments attached to your property. It is important that you know who ALL the creditors are that have an interest in your home, not just your mortgage lender. If there are other liens on the title report of your home, they will either have to be paid off at the close of your sale or negotiated in some way.
- Find the creditors who hold liens on your home and order payoff statements from them as quickly as possible. If there are other creditors attached to the home, you need to find out the current balance owed on the liens. Sometimes, amounts owed go up over time, so to help you estimate how much money you’re set to get from the sale of your home, contact the creditors immediately to find out how much is owed.
- Order a payoff statement on the primary mortgage. Find out the total balance owed to fully pay off your mortgage. This number sometimes is higher than you think it will be, especially if you’re behind on payments, so order this payoff statement as soon as possible.
- Keep the payoff statements for the liens and the mortgage updated every 30 days. If you’ve ordered your payoff statements early, be aware that they expire every 30-days. If your sale is set to close after the payoff statements expire, keep updating the payoff statements so you have accurate numbers when you’re ready to close your sale.
- Create a selling timeline that provides enough of a buffer for the deal to fall apart and for you to bring in a back-up offer before you lose the home to foreclosure. Once you understand your foreclosure timeline, create a selling timeline with your real estate agent that provides for additional time in the event your buyer walks or you need to start the sale over with a new buyer. Don’t push yourself right up against your foreclosure auction date – give yourself plenty of time to complete your closing.
- Keep in touch with your escrow agent to ensure they don’t need any last minute items that they haven’t requested. Your escrow agent is the party who actually closes the sale and disburses funds to all the parties. Make sure you have communicated to your escrow agent that timing is important. Check in with them regularly to make sure they have everything they need to complete a successful, on time closing.
- Review a copy of your settlement statement to make sure the judgment and mortgage payoffs are reflected correctly so there are not any post-closing issues. The settlement statement is the statement escrow prepares showing all funds and all creditors involved in the sale of your home. Before you sign the statement, review it with your TItle Report to ensure that all creditors who have an interest in your home are showing on the settlement statement so everyone gets paid on time.
If you are considering selling your home and are in default, facing foreclosure or just trying to get ahead of future financial issues, feel free to give me a call at (425) 654-1674.
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