How To Avoid Foreclosure
The biggest fear for most homeowners is that something might happen that could cause them to lose their house to foreclosure. If you find yourself in this unfortunate situation, selling the house to an investor might be your best option. When it comes to selling a house to avoid foreclosure, you need a trusted home investor that can guide you through the process. Read on to learn how an investor can help you and how to choose the right one.
How a Home Investor Can Save You from Financial Trouble
There are two main ways a home investor can save you from running into major financial problems. The first is by avoiding foreclosure and the tax burden that comes with it. The second is avoiding a much lower credit score.
Having the bank foreclose on your home can be devastating. A foreclosure can cause credit and tax issues, and there’s even a chance that you could be forcibly removed from your home. m,k On top of that, the IRS considers foreclosures to be a form of debt forgiveness. This means that they may consider the paying of the debt obligation to be taxable earned income. This compounds the problem by forcing another unpayable debt onto a homeowner.
Avoid Lowering Your Credit Rating
A foreclosure will negatively affect your credit rating, and the bank will report the debt to credit agencies. This mark can stay on a credit report for 7 years in theory, but it can carry on longer if the collection agency sells the debt obligation to another collection agency. The Texas Realtors Association points out that reporting the debt to a credit agency will lower your credit rating. This will make it more difficult to get a home loan in the future or rent property in the future.
Selling Your Home As-Is: The Fastest Solution
For many homeowners facing foreclosure, there really is only one option – selling the property as-is. With a short sale, there will probably still be money owed, but arrangements can be made to pay that down over time.
It’s possible to sell to someone looking to purchase a home to live in, but this will require a home inspection. This means that anything wrong with the house will need to be addressed before the sale can be finalized. For homeowners looking at foreclosure, this rarely is a viable option. There probably isn’t enough money to fix anything major.
Selling Your Home as an Investment Property
The other option is to sell the home to someone who is willing to purchase it as an investment. Legitimate home investors have no issue with buying a property as-is. This is because in many cases, they rehab the property to either resell or turn into a rental property.
Investors are not going to worry about having to make repairs because they simply expect it. Another benefit of dealing with an investor is that reputable ones have working relationships with one or more banks. This means they won’t have to deal with the uncertainty of acquiring a home loan. Most times, they will be offering cash for the property.
Banks are willing to push through short sales because they love to get cash right away rather than having to wait for payments to come in. Sometimes, it is even possible for an investor to come in at the last minute and save the property from entering foreclosure. While there is no guarantee that this will happen, it isn’t uncommon.
Setting Realistic Goals
It is common for homeowners to have too-high expectations when dealing with investors. Often, they aren’t aware of what reasonable compensation is for their property. Investors have to factor in the estimated cost of repairs before offering a price.
Homeowners need to understand that the cost of repairs can vary greatly. Every investor has different standards they demand of their properties before they rent or sell. This is reflected in the offered price.
Always Do Your Research
According to the National Association of Realtors, all homeowners who are entertaining the idea of selling to an investor should do their homework first. You need to make sure the investor has a good reputation and isn’t some fly-by-night company.
The easiest way to do this is to check if they have been rated by the Better Business Bureau. Follow this up with asking any questions regarding the sale of the property, such as what you should expect during the sale process.
Get In Touch With a Reputable Houston Home Investor
It’s scary when you’re first faced with the threat of foreclosure. But selling a house to an investor to avoid foreclosure is a great way to alleviate those fears.
Are you looking for a reputable home investor? Houston Re House Buyers has an A+ rating from the BBB and a decade of experience buying homes in the local area. We will walk you through the entire process of selling a house to avoid foreclosure. That way, you don’t have to deal with the financial and legal trouble that comes with it. Contact us today to learn more or request a price quote for your home.