Should You Sell To That Preforeclosure Investor?

You can’t make your payments anymore and you’ve tried working with the lender but it looks like the path to foreclosure is inevitable. The next thing that happens is that someone will probably come to your house and offer to buy your house from you, should you take his offer? It depends.

There are essentially two scenarios and it depends on the amount of the offer versus the amount you still owe on the home. Now remember, when the property is eventually auctioned off, any equity that you may have had in the home is gone.

Offer Is More Than Outstanding Loan Balance
If this happens then may want to consider taking this offer if you can’t strike up a deal with the lender because the difference between the offer and the loan balance will be yours to keep. So, if you bought a home for $300,000 and have $280,000 left on the loan when you start missing payments, it may be a good idea to accept that offer because you will get to keep the extra $20,000 difference and satisfy the loan.

Offer Is Less Than Outstanding Loan Balance
This will be an offer you like would want to pass on because the lender probably wouldn’t approve it because you’d be selling the collateral of the loan without fully satisfying it.

What this means is that you’ll probably field a lot of calls from people looking for scenario two and fewer people looking at scenario one, simply because they’re looking for deals. Unfortunately they can always wait until it hits the auction but you can’t.