Why don't home owners sell the house as a regular sale before foreclosure has to come?
Aren’t they allowed to sell the house by themselves as a regular sale, before they cannot make payments to the bank, instead of giving the house to the bank and go bankrupcy? Are there any requirements to homeowners about when can they sell the house after buying it?
May 9th, 2010 at 9:19 am
The problem recently has been the borrower owed more than the house would bring on the open market.
There is no restriction of when you can sell. In normal times people do just sell before they get in trouble but market values dropped so quickly and so far that many were caught in the trap.
May 9th, 2010 at 9:19 am
Homeowners are allowed to sell their houses anytime they wish. However, when the market falls (meaning homes don’t maintain their value) people don’t want to pay more for a house then its worth. That’s what happened in the last 3 or so years. Somebody would buy a home 3 years ago for lets say $300,000 and under normal circumstances – the home would appreciate (gain in value) and the homeowners would pay down the mortgage. Now that the market is down, that 300,000 house is worth only 225.000 – so that if the homeowner decided to sell, and the buyer would only pay 225,000 for the home and the homeowner would have to make up the 75,000 difference to the bank. Nobody wants to do that. It just takes too long to earn and save $75,000. I hope that clears this up for you.
May 9th, 2010 at 9:19 am
Yes they are allowed to sell however, no one whats to buy.
May 9th, 2010 at 9:19 am
You can’t know all the aspects of a situation. Yes they could sell the house, but in most cases they own more than they can sell for, creating a "short sale" scenario for which they need the lenders approval. That is almost impossible to obtain from lenders. Foreclosure and bankruptcy are two different things. Foreclosure is when the bank takes the house back. Bankruptcy is filed by an individual for all their debt.
May 9th, 2010 at 9:19 am
Smart people sell the INSTANT they see that they’re not going to be able to make payments.
People in denial think they’ll FIND A WAY TO SAVE IT. And they usually maintain that position or feeling until the bitter end. So they end up going down with the ship.
May 9th, 2010 at 9:19 am
Some do try to sell. The problem is the market is saturated with houses for sale, loans are hard to get, or the owner owes more than what the house would sell for now anyways.
May 9th, 2010 at 9:19 am
Because the economy is so down that people cannot sell their homes, esp for the price they desire. And there are no requirements about selling your home
May 9th, 2010 at 9:19 am
It is very simple: If you are underwater on a mortgage, can’t sell the house for what you owe on it, and can’t make the monthly payments……it will go to foreclosure and the bank will absorb the loss on the loan and get what they can out of it from another buyer.
May 9th, 2010 at 9:19 am
Simply put, it’s not a Sellers Market, it’s a Buyers Market.
May 9th, 2010 at 9:19 am
I don’t think that there are any requirements that prevent homeowners from selling their home before foreclosures. I think that a lot of people are so upside down on their purchases (they owe more, usually a lot more than the home is worth) and it doesn’t make sense to sell at a big loss when you’re already in financial trouble.