With the number of foreclosures still rising, and the peak not expected until fall, more and more people will be confronted with the decision whether to sell before the foreclosure date. Before deciding to sell the homeowner should be satisfied that selling is the best alternative.
Due diligence in this regard should include talking with a bankruptcy lawyer, consulting with a knowledgeable mortgage broker or other qualified consultant about the possibility of refinancing, negotiating with the foreclosing lender, contacting local governmental agencies to see about assistance programs, consulting with a foreclosure expert to see what price the property is likely to get if it were sold in foreclsoure and to understand the process, and speaking with a real estate agent with experience in foreclosures about the market. I can’t over emphasize the importance of talking to people with expertise in foreclosures, as they are likely to be far more helpful than people with general experience.
Once it is determined that sale is the best option, the laws of the state should be ascertained. Some states, such as Washington, have distressed property laws that are intended to assure that a home owner in this situation makes an informed decision before parting with title.
These laws generally speaking reduce the interest of investors in buying distressed property, creating great opportunity for investors who are willing to comply with the law. The laws also dramatically reduce the number of “rescuers” who hound homeowners in financial crisis and often prove to bring only financial disaster to a home owner.
I recommend that you list the property with a real estate agent with knowledge and experience in the area. If you try to sell without an agent, give yourself a deadline, then list it if the property has not sold. An agent will give the property much more marketing exposure than the typical non-agent sale and the expertise in this situation is usually helpful.
In marketing the property, emphasis should be placed on assuring the prosepctive buyer that you have done your homework and that the buyer need not fear running afoul of the depressed property laws of the state. A lawyer can help with this.
There should be a backup plan. Often people plan to file bankruptcy if the property is not sold by a specified date. It is a good idea to have already consulted with a bankruptcy lawyer and have the papers ready to file before that date.