If you have found yourself on a tight foreclosure timeline with an auction date rapidly approaching, time is not on your side and chances are – you’re stressed.
It can feel like a lose / lose situation to have to decide whether you want to try and fight to save your home with a loan modification (knowing you could be denied) or jump right to selling.
Neither option feels quite right.
What makes this predicament so stressful is that loan modification approval is not guaranteed. The review timelines can be long. It can take forever to get a decision back and the waiting can feel agonizing.
If you end up denied for a loan modification, you have shortened your selling timeframe. If you choose to sell immediately, you will always wonder if there was more you could have done.
This can feel completely overwhelming – you want to do everything you can to fight to stay in the home but if it’s not possible, you want to have enough time to emotionally transition, gather yourself and complete a fair sale of the property that gets you the most money possible.
There is a way to try and keep the home while listing the home for sale so you don’t end up in a stressful time crunch
I recently helped a client who was told by a real estate investor that she could not save her home and needed to sell it immediately. She was about 90-days away from a foreclosure sale date.
Without representation or an informed party advocating on her behalf, she didn’t know if the information she was told was accurate.
She had about $100,000 equity in the home that she didn’t want to lose but if she had an option to stay, she wanted to stay.
We worked out a way for her to list the home while we applied for a loan modification.
If this is something you’re considering, I strongly recommend you hire a knowledgeable attorney and an experienced real estate agent who have completed transactions like this before.
Below is how you make it work:
- The real estate listing discloses that the sale is conditional on your loan modification outcome.
- An addendum to the purchase contract is signed, stating that you are wanting to keep the home and will only sell if your loan modification is denied.
- While under contract, the sale is put on hold while the loan modification is negotiated.
If you end up approved for a modification, you do not have to close the sale of the home. The addendum the buyer signed protects you. You can accept the modification and save the home.
If you end up denied for a modification (with no real appealable option), you will already have a buyer in place who has made an offer on the property.
Then, the closing of the sale can take place quickly with the buyer’s contract that is already in place.
By handling a sale and a modification attempt simultaneously, you can avoid the stress of having to choose and the consequences of making the wrong choice.
If you need help with this or want to discuss your specific timeline and your options, please call me at (425) 654-1674.