When Can You Sell a House in Foreclosure Virginia?
Let’s say you’re behind on your mortgage payments and your home is about to be taken away. In that case, you might be worried about how the eviction process will affect your family, your money, and where you live. A lot of people going through this process are also dealing with other problems, like the death of a loved one, divorce, losing their job, or having big medical bills. You can still sell your house before it goes to auction, which is also known as a sheriff’s sale. Just make sure the offer is fair and set up the close as soon as possible. If you have an offer from a suitable buyer, your lender can’t go through with the foreclosure. It might seem hard to find a buyer at the last minute, but we’re happy to help you.
Selling a House During Foreclosure in Virginia
If you sell your house before the sale, there are a few big benefits. For those who have already gotten a notice of default, you may already know that late payments can hurt your credit score. It’s possible that a default will hurt your credit score more, and it will stay there for a long time. Because of this, it might be hard to rent or buy a new house during that time.
If you sell your house by yourself, it won’t have any other effects on your credit record. You also have more power over the price at which it is sold. In your county, though, you only have a short time to sell the property before it goes up for sale. In fact, this time frame could be as short as 60 days in some situations. You don’t need to fix up the house to sell it, so you can save money by not doing so.
Before you can give the lender and judge your offer to stop the auction, you may have to go through tense talks about damage to the property, the sales price, and other issues. It’s been a pleasure for our company to help many people avoid foreclosure and sell their houses. We’re excited to walk you through our quick process.
Table Of Contents
- What Is Foreclosure?
- How Does Foreclosure Work?
- The Process Of Selling A House In Foreclosure.
- Obstacles When Selling A House In Foreclosure.
- Options Other Than Selling A Home In Foreclosure.
- Foreclosure Resources
- Selling A House In Foreclosure Common Questions.
What Is Foreclosure?
The bank has the right to take back your home if you don’t make your mortgage payments as agreed upon in your loan papers. When you get a letter of default, you’ll know that the bank is ready to take back your home. The lender usually sells the house at auction after taking it back from the borrower. The sale money is used to pay off your debt, if there is one left over. Due to the bad effects of foreclosure, many homes look for ways to avoid going through it. What will happen if I lose my home?
Getting kicked out
If you don’t pay back a loan, the lender and the court will tell you to leave by a certain date. After being evicted, you can take all of your things out of the house, but you’ll lose the value of your home. This could have a big effect on your finances and your life for a long time.
Getting your credit hurt
Your credit score will go down if you miss house payments or go into foreclosure. When you try to get a new job, move into a new house, or buy a car or other big item on credit, your credit past and scores may be looked at. It might be harder to reach these kinds of goals if you have bad credit.
Being Sued
The lender can sue you in county court for the rest of the mortgage amount if they can’t sell your house at auction for enough to cover the full amount. This is because you are still responsible for paying the full loan amount even after the house has been foreclosed on.
How Does Foreclosure Work in Virginia?
Understanding the foreclosure process in Virginia is important because it can affect the options available to you. You may have a 15-day grace period for your mortgage payments. If you make a payment after the grace period expires, the lender can charge a late fee. If the payment is more than 30 days late, it’ll be reported to the credit bureaus, and your score will be impacted.
If you fall behind on your payments, you’ll be in default on the loan. Lenders are required under federal laws to contact you within 36 days after a missed payment to review loss mitigation options. These include a repayment plan, forbearance, and a loan modification. In Virginia, lenders also must send a breach letter before foreclosure can begin. When you are 120 days behind on payments, the lender can begin either a judicial or non-judicial foreclosure in your county. A judicial foreclosure is used if your mortgage agreement does not have a power of sale clause. A non-judicial foreclosure occurs when the statement has a clause enabling the foreclosure to occur without a court order.
If you receive a notice of default, which occurs with a non-judicial foreclosure, you have 90 days to pay all outstanding payments and fees. If you’re dealing with a judicial foreclosure, a lawsuit is filed. The homeowner typically will hire an attorney because the matter would go to trial.
This period of time until the home is auctioned is referred to as the pre-foreclosure period. During this period, the homeowner can continue to explore a relief or payment plan through the lender. The house could also be sold at this time. Once the pre-foreclosure period ends, a Notice of Sale is published in the newspaper to announce the details of the auction. In addition, the homeowner will receive an eviction notice at this time. Often, the eviction notice requires the occupants to vacate in a matter of days. Law enforcement in Virginia can remove you and your belongings from the home if you do not comply.
The Process of Selling a House in Foreclosure in Virginia
Because of the many benefits of doing so, avoiding foreclosure may be your goal. However, depending on how you sell your house, the process could take a considerable amount of time and energy. What are the steps for selling your house in Virginia?
- Research Your House’s Value
Before your house can be listed for sale, you must determine a reasonable asking price. The typical way to do this is to order an appraisal. However, because of the strict timeline that you’re dealing with, you may need to save time with alternatives to valuing your home. Some of these include using an online home valuation resource or getting an assessment from a real estate agent. - Set an Asking Price
In a typical sale, a homeowner may list the home for sale at its appraised market value. However, in a foreclosure, there are other factors to consider. The sales price should be high enough to cover related debts. You may also need to cover expenses like repairs, real estate agent commissions, and more. At the same time, the listed price should be competitive to attract buyers quickly. As you set the sales price, keep in mind that selling the house for a loss could be better than a foreclosure. - Talk to Your Lender
Your mortgage lender needs to be aware of your plan to sell the house. Banks and lenders are typically motivated to support homeowners who are selling their properties. This is because supporting a homeowner is often easier and faster than the foreclosure and auction processes. Talk to your lawyer to review foreclosure laws in Virginia to better understand your rights. - Hire a Real Estate Agent
There are two primary ways to sell a house in foreclosure. You can work with a real estate agent or sell the house yourself. With a real estate agent, the cost of commissions may be cost-prohibitive. In addition, both of these options could take more time than is available. The fastest way to sell a house in foreclosure is through a cash home buyer. - Review Offers from Buyers
Most buyers may negotiate on the sales price, repairs, and other factors. You don’t have time to negotiate when you’re facing foreclosure. By selling to a cash home buyer, you won’t have to pay commissions and closing costs. You can also avoid time-consuming negotiations. It makes sense to get a few cash offers. - Inform Your Mortgage Lender
Getting a cash offer from a home-buying company takes a few days or less. Once a reasonable offer is in hand, you must notify the bank or lender right away. The foreclosure process will be halted as long as the offer is high enough to cover all fees and debts or the bank agrees to a short sale. - Close as Soon as Possible
When selling to a cash buyer, you could close the sale in a week or less. At closing, the title company will disburse the funds owed to the lender or bank. If any cash remains after outstanding balances are paid, the funds are yours to keep.
Obstacles When Selling a Home in Foreclosure in Virginia
Selling a property in foreclosure is a challenging process, but there are situations that could add to the stress. Understanding these issues can help you to avoid unnecessary hassle and accomplish your goal in a timely manner.
The Owner Is Deceased
Inheriting a property in foreclosure comes with the challenge of dealing with the mortgage company as well as probate. To comply with county court orders and avoid foreclosure, it could be necessary to hire multiple lawyers to guide you through the processes while complying with relevant laws.
The Home Is Involved in Legal Proceedings
In some cases, a house is involved in litigation, such as bankruptcy or another type of court case. As is true when dealing with probate, litigation may require working with multiple experienced attorneys. Remember that bankruptcy is not generally a quick process, so timing the sale adds to the complication.
Selling Your House Yourself
Selling your house as a For Sale by Owner requires knowledge of the real estate market and laws, marketing experience, and plenty of patients. Navigating through these challenges while also dealing with a potential eviction and foreclosure can create unnecessary stress. A cash home buyer will give you an as-is offer today without the need to fix up the house. You won’t need to pay closing costs or commissions, and you can close quickly without hassle.
Options Other Than Selling a Home in Foreclosure
While selling to a cash home-buying company for a fast, easy solution could be a great option, some homeowners prefer to remain in their homes. There are several alternatives to a sale that could allow you to avoid foreclosure.
Catching Up on Payments and Fees
When you’re in default on your mortgage, one option is to pay off the amount due so that you’re current on your payments once again. In addition to the outstanding payments, you may need to pay penalties, late fees, and other related costs. Because many homeowners in default struggle financially, this option isn’t always feasible.
Modifying Your Loan
Some banks and mortgage companies may work with you by modifying your loan. Loan modification terms can be selected based on your situation and according to the lender’s policy and are subject to approval. Some modification options include deferring some payments, adjusting the mortgage loan’s term, and more. Generally, a loan modification must be finalized 45 days or more before the scheduled auction.
Refinancing
Some banks will allow a homeowner in default to refinance their mortgage. This replaces your old mortgage with a new one. The new loan secured will have different terms, which may include a better interest rate, a new payoff date, and a lower initial principal amount. This may allow you to establish more manageable monthly payments that are aligned with your current income and access equity that could be used to pay other debts that you’ve fallen behind on.
Getting a Deed in Lieu of Foreclosure
If these options aren’t available to you, getting a Deed in Lieu of Foreclosure would allow you to avoid foreclosure. This deed transfers ownership of the house to your mortgage company directly. A foreclosure would not be reported to the bureaus, but you would lose your home and need to move.
Set Up a Short Sale
If you owe more on your mortgage than the property is worth, a short sale could be considered. A short sale is when you sell the home for less than the amount owed to the bank. This would result in a hit on your credit rating. However, a short sale makes less of an impact than a foreclosure would. You should speak to your lawyer before proceeding with this option.
Virginia Foreclosure Resources
If you’re facing the foreclosure of your house, you need to gather accurate information about your rights and related laws. There are several excellent resources that you can access for assistance. For example, the federal government’s Housing and Urban Development Department, or HUD, provides solid information that can help you through this process and inform you about your rights. You can locate more specific information about your county and state through Washington Legal Aid.
In many cases, sellers benefit from professional legal assistance. These are some of the many law firms in the state that specialize in foreclosures:
The Law Office of Robert C. Hahn, III, P.S.
Dickson Frohlich
Morgan Hill Law Office
Selling a House in Foreclosure in Virginia – Common Questions
If you’re not keen on selling your home during a foreclosure, you do have other options. You can try for a loan modification, refinance your home, get a deed in lieu of foreclosure or short-sell your home.
Loan Modification
A loan modification is a change to the terms of your loan that can make the mortgage more affordable and manageable so that you can keep up with your payments. This can include reducing your interest rate, extending the loan term, or changing the type of loan you have for your mortgage.
Refinance Before Foreclosure
Refinancing involves replacing your existing mortgage with a new mortgage that has better terms, such as a lower interest rate or longer repayment term.
Get a Deed in Lieu of Foreclosure
You can voluntarily transfer the ownership of your home to the lending institution that holds your mortgage. When you choose this way to deal with the sheriff’s sale of your home, it’s a deed in lieu of foreclosure.
Short Sale
A short sale involves selling your home for less than the outstanding mortgage balance, with the lender agreeing to accept the proceeds as full payment for the loan.
Bankruptcy
Filing for bankruptcy can put an immediate stop to the foreclosure process and provide you with an opportunity to restructure or discharge your debts.
Easiest Way to Sell a House in Foreclosure in Virginia
At The Cash Offer Company, we’re a cash home buyer that offers a fast and easy way to sell your home. Through our hassle-free process, you can prevent additional credit damage, sell as-is and save money on commissions and fees. We’re interested in buying houses across Virginia, including Virginia Beach, Richmond, Alexandria, Norfolk, Charlottesville, Roanoke, and Chesapeake.