Option #3: Selling your home the traditional way

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 happens!)

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 value.

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.

Pros:

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.

Cons:

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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