How to Avoid Selling a Home For Financial Reasons

The biggest factor in success at either is usually the one factor that is also key in almost everything you do. Know your options, get educated in the process OR find and partner with someone who is.

We'll start on the seller side of the ball. What options here are open to you depend on your own personal situation, yes. But remember the key is not to reinvent the wheel. I'm confident in stating whomever you are, whatever your situation, someone has been there before, before you.

Foreclosure, Relocation, Death, Divorce, Tired Landlord, Upgrading, Downsizing or investment exit. All of these situations are reasons people decide to sell a home but what you want out of selling probably is different in a lot of them.

Some of these people would be seeking relief of financial burden. Meaning they can't pay current payments and obviously don't have money to pay for cost of services to help with that. So the key here would be an exit strategy that you don't have to pay upfront or no cost to the homeowner at all. This is usually the case in foreclosure and bankruptcy. In a vast majority of these cases, the expense of getting your property sold can be passed on to the lender of the homeowner. They are usually happy to pick up these costs in the case that a knowledgeable investor is handling the transaction and is about to turn what was a non-paying liability back into a paying asset.

Example, I'm in the middle of closing out a loan modification for a client (Mr. Avenel we'll call him) whom initially contacted me about doing a short sale on his property that was being foreclosed on. Through questioning the homeowner about his situation and finding out what he wanted to do, a couple of things became apparent. First, that he didn't want to leave his home. Second, he had two mortgages on the property, but only the first was filing for foreclosure. Hmm, reason to dig deeper. I contacted the second position lien-holder only to find they weren't foreclosing because this gentleman has been paying on time and never missed a payment. Again, Hmm, more reason to dig deeper. I go back to the first lien holder only to find almost the same picture. This gentleman was also a prime client until about a year ago when his payments became kind of erratic. Upon learning this and questioning the homeowner, I found that he had not one but two strokes almost back to back! As the only payer on the mortgage who wouldn't have fallen behind! I quickly brought this information to the attention of the loss mitigator whom I was working with. They right then and there requested I get them his personal financial information ASAP.

Can you see where this is going? They saw that they didn't have enough information abut Mr. Avenel's case and decided to see if he was currently on stable enough ground to rework his loan. Why? Because after the first lien holder contacted the second and found he was the model client. They looked back in their records and saw that he was the model client until sickness intervened. They were able to come to the decision that if we can get him back on track, it is reasonable to assume that he will become a model payer again. Now remember, this is someone whom one week earlier was willing to just let his home go. Know to bring this back full circle this all started by knowing what options were open. I knew Mr. Avenel still had a full-time job which he was employed for years, stability. I knew he made a decent amount of money, enough to afford the house. This is a classic case in which banks would and should consider a loan modification. A situation out of the ordinary came up, in this case twice, that caused Mr. Avenel to fall off pace with his payments. It's just up to me to show them that if they make certain allowances on past due balances, this could be worked out. Not only did they do that by spreading past due payments over the length of the loan, they picked up past dues tax payments and attorney fees, reduced the interest rate and required no initial balloon payment to reinstate mortgage payments and removed the foreclosure.

Now this does bear mentioning that these results could never be guaranteed to anyone, just remember how this all started. This guy was getting ready to walk away from the biggest investment of his life. Don't you think if in the same position, you'd want to do all you can to see that your cards fall where you want them to land? Look at your options or find someone who knows them. Fast.

Next time we'll take a look at going down the short sale path, and what you can do to help ensure this is as smooth a process as possible. As difficult as it is to walk away from your home, there are definitely times when this is the only smart choice.