Option #3: Selling your home the traditional
Most people in foreclosure try valiantly to
save their family home to the very last day, but the bottom
line is that your home isn’t worth a cent to you if it gets
foreclosed on. (In fact it could be a great DEBT to you if that
When people in your situation in the past
have realized that they could sell their home before the
auction, usually the response has been to simply run to the
first realtor they saw. However, there are two major problems
with that route.
First, it takes time to sell a house. In
many areas of California, the average time on market is four to
six months! With your auction date looming in the near future,
you simply do not have the luxury of thinking that your house
can sell in a week or two… It’s not going to happen unless you
have the ability to mark it down to 20% under the fair market
Secondly, to sell any house, all realtors
have to mark-up the price of your home by the amount of their
commission, or it’s simply not worth their time to sell it for
you. So the thing to consider here is how much equity you have
in your home. If you haven’t yet paid the principle down a
certain dollar amount yet, something like 15% of the total
loan, then your house will be un-sellable.
Only if you have paid off more than 15% of
the total principle of your property (20% for smaller
properties) will this option be available to you.
Your neighbors will only see a ‘for sale’
sign in your yard, but if it doesn’t sell, then the sign may be
replaced with an auction sign soon.
You’ll have a chance at dignity in front
of your neighbors, and if you’ve got enough equity to give
up, you’ll have a chance of getting out of the house before
for the auction.
While selling your house before it is
foreclosed on is the smart route, this is the least smart
way to sell it, because it adds the realtor’s markup to the
price tag. Also, you will have to have at least 15 to 20%
of your home paid off for this to be an option, simply to
make room for the realtor’s fees and to mark it down enough
to sell in our competitive market. Once again, this does
nothing to mop up your credit situation.
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