Can I sell my home while in foreclosure? The short answer is YES. Selling is better than losing the property at a sheriff sale.
Hello,
My name is veer Patel. I'm a partner at the Law Offices of Patel, Soltis & Cardenas. We are attorney in New Jersey and New York with affiliate offices in India.
I have practice foreclosure law in the state of New Jersey. Today's foreclosure question is: Can I sell my property in foreclosure?
The answer that question is, "Yes you can."
There are two ways to do it.
1.You can sell through a traditional sale.
2. You can try to use the short sale Process.
A traditional sale is when you pay back all that is owed to the bank and keep your equity.
A short sale is when you pay your lender less than you owed.
A lot of times I don't recommend going through the short sale process and I know a lot of Realtors are probably upset hearing this.
But you know if there's a lot of tax consequences that come with doing a short sale if your mortgage was $500,000 it's an investment property and you owe and you go five hundred thousand dollars.
You short sell for three hundred thousand dollars you know what's gonna happen that two hundred thousand dollars can be written off as income. There is a form you can file with the IRS to get out of paying taxes if you are insolvent. So, make sure to consult with a tax professional before going forward with a short sale.
Many times you as the home owner will benefit from selling your home on the open market so you can keep the equity in the property. If you would qualify for a short sale, then you should also look into a short pay off where you pay less than you owe, and get to keep your home instead of an investor taking your home.
So if you go with a short sale, instead of owing the bank money you may owe the IRS money. And, they're not as fun as a bank let me tell you.
But I'm going to talk about a traditional sale foreclosure. You may sell your property all the way up until ten days after the foreclosure has occurred.
It's called the right of redemption. I do not do not recommend waiting that long. I always have my clients if I can, close prior to a sheriff's sale date. It just makes everything so much easier procedurally and there's a lot less risk and a lot less stress. Let's just say it's a lot neater.
So how it works is you list your property for sale traditionally through a realtor? I don't like it being by owner during this process, because a lot of times my clients get overwhelmed with their circumstance. I understand why that occurs, but having my client list their own property by owner requires me to rely on my client to do one of the major components of their own case. Which is to sell the asset or get a decent contract.
Having a Realtor to sell a property allows an expert to work the deal. If you are trying to save a commission at this late hour in the game, you may lose everything. And, a Realtor provides another perspective that hustles and understands what it is to get a cash buyer versus a mortgage buyer and what an as is sale is.
It's important to have a Realtor in this situation and what would happen is once a contract assignments like a traditional closing. As the attorney who is representing you in a suit in a distressed situation like this it means the attorneys to keep an eye on the foreclosure action so the house doesn't get sold from under you. In a situation like that you know the client comes to me and foreclosure property they want to sell list the property get a contract get a buyer.
I work with my clients to go through all the title conditions all the judgments whatever else is required to clear title. Let's get to the closing table both since gets the closing table and have the closing table once everything is done. The title company will then issue a check to the bank or the lender paying them off in full. This would result in a couple things happening. First thing is that the list pendants that was attached to the property will be discharged. The second thing is that you'll get a satisfaction a mortgage. Which should be reported the final thing is that the foreclosure action will be dismissed or a final judge will be vacated. And, then the foreclosure action will be dismissed depending on where it is so yes you can sell property in foreclosure but you need to do it in a way which you know you got to be smart about it you can't just assume that you can sell your property and take all the time you need no you need to pay attention to the entire picture and sometimes depending on the circumstances if you run out of time you need to get relief from the court or swing it up another level and take it to bankruptcy court or to make sure that you save your equity and you save everything that you've built into that property.
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