The long and short answer is: yes, you can sell your home while going through bankruptcy. Depending on who you sell to, this could be a great way to repay your lenders, start anew, and, if the buyer provides a generous offer, might even provide you with a little extra to make sure you’re not destitute.
We buy houses in Oceanside, CA, so we know what the fair market value is of most types of property in the area, and while there are ways to avoid a house sale, when it comes right down to it, it’s always best to sell to a professional home buyer. That being said, here are a couple of options you can explore before handing over the keys to a professional buyer.
Option 1: Work With Your Lender to Reinstate your Loan
Surprisingly, one of the best ways to avoid foreclosure or having your home liquidated is to actually get another loan. It might seem counterintuitive, but in reality, most lenders will be more than happy to work with you on a new payment scheme or mortgage terms.
It’s a win-win situation: you get to keep your home and the lender can recoup the money they lent you (plus interest, of course). Naturally, this will depend on the why’s and how’s of your current default, and while most lenders will usually try to work with you to go current with your loan, some lenders might be less forgiving.
This option is usually available throughout most of the bankruptcy process, and is usually one of the first loss mitigation options that the court will suggest. When it comes up, try to work closely with the court, your lender, and your bank to try and see if they can reinstate your loan or, if the lender has accelerated it, figure out a way to borrow money for the default amount.
Option 2: Figure Out if Your Property is Exempt from Foreclosure
The good news is, if your home is of a particular category, it might be exempt from foreclosure. Bankruptcy laws are now heavily regulated on the Federal level, which means that any house that falls within the California 704 Homestead exemption can be spared from a foreclosure.
The California 704 Homestead Exemption is a law that protects certain types of property, usually with an equity of up to $600,000, from foreclosure, provided that it’s the primary residence of the borrower. These categories of residences can include, but is not limited to:
- Residential house
- Community Apartment
- Stock Cooperative
- Boat House
- Mobile Home
- Planned Development
It bears repeating, however, that the California Homestead 704 will only protect your real or personal property if it’s the primary residence that you are actively residing in at the time of your filing.
Option 3: Sell to a Professional Home Buyer
When all else fails, your best option is to work with a professional home buyer. At its most basic, a professional home buyer does exactly what their name suggests: they make a living buying (and reselling) houses, usually for a profit. More often than not, professional home buyers will buy houses with cash, and they’ll want the process to be as quick as possible so that they can recoup their investment.
Professional home buyers will, like most buyers, try to negotiate a bargain with you, and in some cases, the offer they provide might be on the lower end of the fair market value of your home. That being said, their offer will most likely be better than a short sale, and if your house is in an attractive area or a desirable development, you might even get your entire home’s value with a little extra. Of course, the latter is relatively rare, but it does happen.
Let Us Help You
Ignite Property Solutions LLC is one of the most trusted professional home buyers in the country. That’s because we make sure that our transactions benefit our clients, ourselves, and the community we’re buying from. We are proud to have a team of real estate experts and analysts who take the time to study each property’s nuance before drafting a unique and fair offer for the seller.
We buy houses in Oceanside, CA, and for us to make a great offer, we will canvass the entire Oceanside real estate market, painstakingly go through every relevant property’s pricing and overall value to ensure that we are able to give you an offer that is as close to fair market value as possible. Contact us, today, to learn more.