How to Sell Your Home Before Foreclosure? A Texas Guide

Sell Your House Before Foreclosure in Texas

Foreclosure is a legal process where a lender seizes the property due to the borrower’s failure to make mortgage payments. This results in the loss of homeownership rights and financial consequences. 

So, if you have missed your mortgage payments for 3 months and there’s no way you can recover the amount, it’s time to sell your home before the foreclosure sale is complete. Do not wait – especially if you have received a notice from the lender. 

In today’s guide, we will provide Texas homeowners with practical steps and strategies to sell their homes before foreclosure occurs. Let’s get started!

 

The Benefits of Selling Your Home Before Foreclosure 

When you can’t pay the mortgage payments or work out another solution, one thing is certain – you will lose your house. But that doesn’t mean you need to lose it through foreclosure and bear all the additional losses that come with it. 

Instead, be proactive and sell your home before foreclosure. This will unlock the following benefits:

  • Avoid Foreclosure on Credit Report 

Foreclosure can severely damage your credit score. It can drop the score by at least 100 to 160 points, and most foreclosures stay on the credit report for 7 years. This destroys your creditworthiness and makes it challenging to secure future loans.

  • Better Chances of Securing Future Home

Selling your home before foreclosure increases your chances of securing a new home in the future. This is because lenders view foreclosure history as a red flag. They would rather qualify someone else for a mortgage than a person with a foreclosed home. 

  • Lower Risk of Deficiency Judgement

If the sale of your home doesn’t cover the outstanding mortgage balance, lenders may pursue a deficiency judgment – a court ruling that allows the lender to collect the remaining money from the borrower. You are held financially responsible for the shortfall. 

However, when you’re selling a house before foreclosure, there is more time to market the house properly and select the highest offer. You don’t have to rush the sale and compromise on the value. This lowers the risk of deficiency judgment. 

 

How to Sell Your Home Before Foreclosure in Texas? 

Selling your Texas home before foreclosure is a straightforward process. Just make sure you follow these steps accurately!

 

1. Contact Your Lender

First of all, you must communicate the situation with your lender and inform them about your decision to sell the house. This is very important as the lender has a security interest in your property and legal rights. Plus, the lender will tell you the exact amount that you owe. This may include missed mortgage payments, any late fee charges, accrued fees, etc. 

 

2. Determine Your Home’s Market Value

Understanding your home’s worth will help you decide the right selling path; the traditional route or a short sale. It will also help set a realistic asking price to attract potential buyers.

So, conduct a comparative market analysis (CMA) or hire a professional appraiser to know the current market value of your home. If none of these is possible, we highly recommend our Free Cash Request Form. 

It will offer a fair cash offer based on market values within 24 hours. All you have to do is enter your Texas home address! 

 

3. Do the Math 

Once done, subtract the amount you owe from the estimated cash offer. If you’re able to cover the amount, then go ahead with the sale process and follow other steps. However, if not, determine whether you can arrange the money to fulfill the amount. If that is not possible either, you should consider a short sale.  

 

4. Set a Realistic Asking Price

Your asking price should not be too high or too low. Instead, it should be focused on covering the following costs:

  • Amount you owe
  • Sale costs (home preparation, realtor commission, etc) 
  • Profit

Remember we don’t just want to get rid of the house and avoid foreclosure. We want to make sure we navigate this process successfully. 

5. Prepare Your Home for Sale

Now, enhance your home’s appeal by decluttering, cleaning, and making necessary repairs. This will increase the chances of selling your Texas property for higher values. We also recommend staging your home to showcase its best features and attract potential buyers.

 

6. Seek Professional Assistance

Consult with a real estate agent or a real estate attorney experienced in foreclosure proceedings. They can provide valuable guidance in navigating the process and assist you in maximizing the sale potential of your home. However, they will charge service fees or commissions. If that’s something you want to avoid, you can also sell the home yourself. Continue with the next step. 

7. Market Your Home

Use various marketing channels, such as online listings, social media, and signage. This will make more people aware of your property and increase the chance of better offers. 

When describing your property, do not just state that the house is for sale. This will not generate interest because the buyer doesn’t know what makes your property special. Instead, focus on highlighting its strengths and unique selling points.

8. Negotiate Offers

Once your house is properly marketed, you will start receiving offers from potential buyers. Some of these people will visit your house too.  Review and negotiate their offers. It’s best if you do this with the assistance of your real estate agent or attorney. 

9. Close the Sale

Once you’ve accepted an offer, work with your real estate agent, lender, and closing attorney to finalize the sale. Complete any necessary paperwork and coordinate the closing process to transfer ownership of the property to the buyer.

Please note that it’s not important to close the sale before foreclosure. If you have a signed document for the house offer and closing date, the lender can’t foreclose the property. 

 

Move Forward

After selling your home before foreclosure, focus on rebuilding your financial stability and planning for your future. Take proactive steps to improve your credit, manage your finances responsibly, and avoid similar challenges in the future. Keep moving forward!

 

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