One of the most stressful events in life is being faced with the possibility of losing a home to foreclosure by the bank. Whether due to job loss, divorce, death of a loved one, or any number of other factors that can lead to dire financial straits, the foreclosure process is difficult and can lead to major financial loss and homelessness. Many people believe that once they are behind in their mortgage and the financial institution that financed the home has initiated foreclosure proceedings that there is no recourse for a homeowner. In reality, up until the day of the Sheriff’s auction sale of a home, and even longer than that in some cases, there is the possibility of getting out from underneath a foreclosure.
What is pre-foreclosure and how long does it last?
As the name implies, pre-foreclosure is the time period leading up to a formal foreclosure when payments are not being made on the property. The amount of time allowed for a pre-foreclosure is dependent on the financial institution, but generally ranges from 3 months to one year. In the state of California, the pre-foreclosure time frame can be as little as 111 days (consisting of a 90 day notice period as well as a 21 day pre-sale time frame). Keep in mind that as a result of COVID-19, banks and lenders are required to extend foreclosure dates and offer borrowers assistance by federal law.
During the pre-foreclosure time frame, the owner of the home is free to either make payments and become current on the loan or sell the home to reimburse the bank. One option is to sell with the help of a realtor, but as this can often take months to accomplish and be quite expensive it is often impossible for homeowners who have found themselves in extremely difficult financial circumstances.
Another potential option available to property owners looking to escape a pending foreclosure is to contact a real estate investor who can pay cash for their home very quickly. The advantage of selling to an investor is that you aren’t required to perform any maintenance on the house or invest any more money to make it sellable, as investors pay cash quickly and will buy homes in any condition. By using the money from the quick sale to pay off any remaining mortgage, homeowners in financial trouble can be free of the property without suffering through an eviction or foreclosure.
If my house is in foreclosure, is it already too late?
Once a house is placed in foreclosure, there are strict guidelines as to how the procedure progresses. First the home must be listed as part of the Sheriff’s Auction. The auction of a home may not take place until 21 days following the date it is first listed as available for auction. Within this time frame it is still perfectly legal for a homeowner to settle their debt with the bank in order to halt proceedings. Likewise, a sale of the home can still take place even after the home has been listed for auction.
At this point, however, time is truly of the essence. A conventional sale under these circumstances is almost impossible as the amount of time required to progress through the inspection process and complete all the paperwork required to close a new mortgage loan on the property would almost certainly exceed the four week deadline.
While paperwork is still necessary when selling a home to a home investment company, the amount of time necessary to complete the process is exponentially shorter. Trusted House Buyers of San Diego, for example, is a completely family owned and operated local investment group that doesn’t rely on decisions from committees out of the area or funding from outside sources. Because they make all appraisal decisions themselves and pay cash for homes they purchase, sometimes a decision and completion of sale can take place within a week.
The difference between a fast cash sale and a short sale?
Many homeowners nearing foreclosure have heard the term short sale, and believe it to be the same as a fast sale. This couldn’t be further from the truth.
A short sale is a type of home purchase wherein a house is sold for less money than the current owner owes on the property. This type of sale can take even longer than traditional sales sometimes because it has to be authorized by the financial institution who holds the mortgage on the house. Oftentimes banks are reticent to accept an amount much below what they have already leant on the property, so there are cases in which property owners wait months to hear back from the bank with a decision on a short sale and don’t get authorization to sell the home for the decreased amount. The end result of this type of scenario is that the owner is still threatened with the loss of the home and the negative financial implications of a foreclosure and the precious time they had to remediate the situation has dwindled even more.
A fast sale for cash is not dependent on anyone but the parties involved for ultimate approval. This means that a sale to an investor can be formalized and completed within a matter of days not weeks or months.
Avoiding a foreclosure is a priority for many individuals who have had financial misfortune of one sort or another. Selling the property and repaying any money owed to the bank can turn a terribly stressful and difficult situation into a distant memory that will have many fewer long term consequences on your financial future. Companies like Trusted House Buyers are willing and able to help their neighbors in San Diego get out of financial crises. Give them a call today, and see just how much they can offer you for your home.