How To Get Out Of Foreclosure In Colorado Springs?
Are you wondering how to get out of foreclosure in colorado springs?
Do you feel like you’re swimming in shark-infested financial waters?
When financial troubles hit, they hit hard and fast. Which leaves you searching for options.
If you’re in financial trouble, it’s time to consider selling your home. Selling before a foreclosure is the best way to get creditors off your back. And it may keep your credit intact for the future.
Check out this guide for how to get out of foreclosure by selling your home fast.
Keep the Lines of Communication Open
No matter what the circumstance, you must stay in communication with your lender. They generally don’t want to mess with foreclosures if they don’t have to. It looks bad for the lender and it’s expensive and messy.
Many mortgage companies will agree to a loan modification to make payments more affordable. They also might allow you to skip a few payments so you can get caught up. Talk to your lender about these options first.
The foreclosure process can take as little as 60 days in the state of Colorado. Talking with your lender might buy you some time. Then you can look into different selling options like a short sale or an investor sale.
Consider a Short Sale
A short sale is a special circumstance where the bank accepts less than the balance of the loan. This usually happens when the housing market drops off causing home values to plummet.
For example, when you bought your home, it was worth $100,000. You currently owe $90,000. And because of a market drop, it’s now only worth $80,000.
If you sell the home for $80,000, your lender will be $10,000 short on what they need to cover the balance of the loan. This is a short sale. And your bank must agree to this before you sell.
This is another reason you need to keep the lines of communication open with your lender. If you work with them and keep them in the loop, they’re more likely to approve a short sale.
A short sale will save you from foreclosure, which can hang around on your credit report for a long time. But the lender will probably still file a collection for the money that they lost on your loan balance. Which will also impact your credit.
That said, a short sale is a much faster way to sell your home than by traditional means.
Buyers know that you’re motivated. And they’ll be attracted to the listing because of the reduced price. But it means you’ll lose most (if not all) of the equity you may have had in the property.
Short Sale Process
Short sales work like any other home sale. You hire a real estate agent. Some agents won’t work with short sales so you may need to search for one that does.
The agent lists the home and schedules showings for potential buyers. They might make suggestions for damage repairs that can help your home sell faster. And you’ll need to keep the home clean and staged during the showing process.
Once a buyer puts in an offer, the agent schedules the closing date. There are lots of factors involved in a closing schedule. So you’ll need to make it clear in the purchase agreement that you’re under a tight deadline because of the foreclosure.
Consider an Investor Sale
If you’re considering a short sale, you should also consider selling to a real estate investor. It’s a great option if you’re looking for a quick, no-mess sale. Real estate investors look at properties in any neighborhood or in any condition.
They’re also market independent. Investors know how to sell homes and are usually willing to hold property until the market picks up. So they’re not afraid to buy your home even in a soft market.
When a realtor sells a home, there’s often a long timeframe involved. This includes listing, showings, and inspections, which all take time.
And dealing with a buyer can get complicated because they may muck up the sale with special requests. They may have selling contingencies like needing to sell their own home first. Selling to an investor eliminates the messy buyer part of the equation.
A real estate investor is more likely to understand your situation. Because they pay in cash, they have the ability to move quickly. And an investor transaction requires much less paperwork than a regular real estate sale.
When you sell with a real estate agent, you must deal with a lot of different people. This includes your agent, the buyer’s agent, and the buyer’s lender. In an investment sale, the investor buys directly from you with no other parties involved.
And when you don’t have an agent involved, you don’t have to pay heavy commissions on the sale either. The average realtor gets about 6% commission on a home sale. That’s money that you’ll have to pay out of pocket if you opt to go for a short sale.
Investors don’t charge commissions. They also don’t charge excessive closing fees. Their cash offer is straightforward with no additional fees along the way.
Investor Sale Process
The first step is to schedule a meeting with an interested investor. During that meeting, you’ll let the investor know your situation. And you’ll set the expectations for a closing timeframe.
Then the investor inspects the property. With a realtor sale, the buyer usually requests an appraisal and a home inspection. And if the inspection reveals problems with the home, you’ll have to fix them before the closing.
That’s not the case with an investor. After the inspection, they’ll draw up their cash offer. In this agreement, they’ll purchase your home “as is” with no repairs necessary.
After you accept the offer, you move on to closing. Closing usually takes place within a few days of the offer. And most investors pay with cash so there are no issues with bank paperwork.
How to Get Out of Foreclosure the Right Way
If you’re wondering how to get out of foreclosure the right way, consider the options we’ve mentioned here. Every situation is different so it’s best to carefully weigh the pros and cons before you decide.
At Fast Home Options, we understand that tough situations happen. We’ve helped many people in the Colorado area to get out from under foreclosure. Click here to learn more about foreclosure sales.