Selling Your Home to Avoid Foreclosure

Selling Your Property

While this option may seem obvious, there are very likely to be issues which may not have been thoroughly considered. 

Simply owing more than a property is worth, does not qualify someone for a hardship situation.  Without a documented hardship, the bank will accept nothing less than total repayment of the loan.

If you have:
 
  • Other Property 
  • Cash Reserves (available to pay all or part of the deficiency) 
  • Investments (Certain retirement accounts may be exempt) 
  • Good Income (ability to make current monthly payments)
 
. . . you will not qualify as having a verifiable hardship to the banks. 
 
If you do not qualify as having a hardship and being insolvent (with the debt burden of the current property) you will have a different set of painful decisions to make.
 
Your options are reduced to:
 
  • Pursuing a Loan Modification (hardship & income limited) 
  • Refinancing (equity limited) 
  • Renting* 
  • Selling the property**
 
*Renting until the real estate market recovers is an option, but may result in even greater negative equity in the future.
 
**Selling the property at a loss, and making up the deficiency with cash at settlement, while distasteful, may be an avenue of “cutting your losses” now before the market values get worse.
 
 
 
We would be glad to explore all of these options with you.

Posted by Clay & Kathie Kime - CDPE at 12/29/2008 2:59 PM
Categories: Certified Distressesd Property Experts in Virginia, Virginia Short Sales, Housing and the Economy, Virginia Pre-Foreclosure
Tags: CDPE Virginia Avoid Foreclosure Pre-Foreclosure Economy Wall Street and Housing
 

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