Are you trying to figure out how selling a house in foreclosure works?
There’s no better time to learn because foreclosure rates are up.
In fact, last year alone, Delaware recorded one of the highest increases in foreclosures year over year – 142%!
To make this problem even more concerning, rates are expected to climb further and homeowners in Delaware aren’t aware of their options to stop foreclosure.
Selling a house in foreclosure in Delaware is one of many options available to residents and property owners in order to stop foreclosure auctions in their tracks.
This article is going to walk you through all of the details and strategies required to successfully tackle a foreclosure and help homeowners reset financially so that they can move on from the stress and hassle.
It’s always sound advice to engage legal professionals, so make sure you are heading in the right direction and taking the proper steps to get out of foreclosure.
- Foreclosure activity in Delaware is on the rise. With more homeowners falling behind on their payments, it’s important for them to comprehend their options around how to stop foreclosure fast.
- There are many different stages to the mortgage foreclosure process in Delaware. It’s critical to understand where you might be and how you can start to take action today. Don’t lose hope – help is available.
- In order to stop foreclosure immediately, many homeowners decide to “sell my house before foreclosure”. But be careful – you need to sell the house to the right buyer so that you can avoid foreclosure auctions and damaging scores on your credit.
Table of Contents
What Does Foreclosure Mean?
Entering foreclosure happens when a borrower struggles to make loan payments, prompting the lender to recover the outstanding balance by taking possession of and selling the borrower’s property.
Curious to explore foreclosure trends in your local area?
Zillow, a well-known real estate website, offers users the ability to browse listings of foreclosed homes—properties repossessed by lenders due to borrower defaults on their loans.
To steer clear of foreclosure, borrowers can engage in negotiations with their lenders for a repayment plan or opt to sell the property. Government programs and non-profit organizations also provide assistance, offering financial support or mediation services to help borrowers sidestep foreclosure – check out the video at the end of this article for more on this valuable resource.
But first, let’s get some common terminology straight related to foreclosure:
- Foreclosure homes are properties that are in the process of being repossessed by the lender due to the borrower’s default on their loan.
- REO foreclosures, also known as real estate owned foreclosures, are properties that have been repossessed by the lender and are now owned by the lender.
- Foreclosure listings are directories or databases that provide information about foreclosed properties, including their location, price, and details about the property.
The mortgage foreclosure process typically involves several steps, including the borrower missing several loan payments, the lender sending default notices, and the lender initiating legal action to repossess the property.
In some states, including Delaware, the foreclosure process is a judicial process, which means that it is handled through the courts. In other states, it is a non-judicial process, which means that it is handled outside of the courts.
If a borrower is unable to pay their loan and the lender forecloses on their property, it can have negative consequences for the borrower, including damage to their credit report and the loss of their home.
You might be reading this while you’re in preforeclosure, which is the stage of the foreclosure process that occurs before the lender initiates legal action to repossess the property. During this stage, the borrower may be able to sell the property or negotiate with the lender to avoid foreclosure.
If you are facing foreclosure, it is important to seek legal advice as soon as possible to understand your rights and options.
How Do Foreclosure Sales Work In Delaware?
In the state of Delaware, foreclosure sales are processed as follows:
In the event of a borrower’s loan default, the lender can commence a foreclosure proceeding to recoup the outstanding loan balance. In Delaware, foreclosure follows a judicial process, involving court proceedings. The initiation occurs when the lender files a complaint, serving the borrower with a copy. The borrower possesses the right to reply and offer a defense. Should the borrower fail to respond or the court rule in favor of the lender, a foreclosure judgment is issued, leading to the property’s inclusion in a county sheriff’s sale.
Preforeclosure homes are properties that are in the process of being repossessed by the lender due to the borrower’s default on their loan. These properties may be sold during the preforeclosure stage in order to avoid a formal foreclosure action.
A county sheriff’s sale is an auction in which the property is sold to the highest bidder. The sale is held at the courthouse and is open to the public. The sale is advertised in a local newspaper for at least three weeks prior to the sale date and is also advertised on the sheriff’s website and at the courthouse. The lender is typically the opening bidder at the sale and may bid the full amount of the outstanding loan balance, plus any costs and fees associated with the mortgage foreclosure process. Other parties may also place bids on the property.
If the property is sold to a third party, the lender will be paid the outstanding balance and any excess funds will be returned to the borrower. If the property does not sell or if the sale does not generate enough funds to pay the outstanding balance, the lender may file a deficiency judgment against the borrower. A deficiency judgment is a court order requiring the borrower to pay the remaining balance of the loan.
It is important to note that the borrower has the right to redeem the property up until the time of the sheriff’s sale. To redeem the property, the borrower must pay the outstanding balance, plus any costs and fees associated with the foreclosure process.
Foreclosed homes, also known as bank-owned homes or real estate owned (REO) properties, are homes that have been repossessed by the lender and are now owned by the bank. These properties may be sold by the bank through a real estate agent or at a county sheriff’s sale.
How to Stop Foreclosure Delaware
It’s quite possible that the reason you are here reading this article is that you are already in foreclosure or preforeclosure and looking for a way to stop it.
There are many different tactics and strategies that a homeowner can deploy to slow, delay, and altogether stop foreclosure.
Seek legal advice from an attorney in the form of judicial foreclosure defense if you are planning to take this kind of action on your own.
In summary, if you are facing foreclosure and looking to stop a foreclosure sale, then there are some common steps that can be followed.
How to Save Your House From a Foreclosure in Delaware – Process & Options
1. Act Promptly:
If you receive an Act 91 notice, which is a notice of mortgage default, it is important to act quickly. The Act 91 notice is the first step in the foreclosure process in Delaware, and it gives you the opportunity to bring your mortgage account current and avoid foreclosure.
2. Call Your Lender
If you are having trouble making your mortgage payments, it is important to contact your lender as soon as possible. Your lender may be able to work with you to come up with a repayment plan or to modify your loan terms. Most people overlook this step!
3. Explore your options
There are several options available to help you avoid foreclosure, including government programs and non-profit organizations that provide financial assistance or mediation services. It is important to explore all of your options and choose the one that is best for your situation. One option that many homeowners take is simply selling their house in foreclosure. This is a quick, easy and seamless way to get out of foreclosure.
4. Find an attorney
If you are facing foreclosure, it is a good idea to consult with an attorney who can help you understand your rights and options. An attorney can also advise you on the best course of action and represent you in court if necessary.
5. Consider a short sale
If you are unable to bring your mortgage account current and you are unable to sell your home through traditional means or to a cash buyer, then you may be able to sell the property through a short sale. A short sale is a sale in which the lender agrees to accept less than the full balance of the loan.
6. Go to the foreclosure auction
If your property is scheduled for a foreclosure auction, it is important to attend the auction. You may be able to bid on the property yourself or bid through an agent. If the property is sold to a third party, the lender will be paid the outstanding balance, and any excess funds will be returned to you.
7. Consider a deed in lieu of foreclosure
If you are unable to avoid foreclosure and you are unable to sell the property through a short sale or at a foreclosure auction, you may be able to avoid a formal foreclosure action by offering the lender a deed in lieu of foreclosure. A deed in lieu of foreclosure is a legal document in which you transfer ownership of the property to the lender in exchange for the release of your mortgage debt.
It is important to note that if you are unable to avoid foreclosure and your property is sold at a foreclosure sale, it may be listed as a bank-owned or real estate owned (REO) property. These properties may be listed on foreclosure listing sites or through real estate agents.
If you are facing foreclosure in Delaware, it is important to act quickly and seek legal advice as soon as possible. An attorney can help you understand your rights and options and advise you on the best course of action. And a home buyer can solve your problem the quickest!
Can I Sell My House in Foreclosure in Delaware?
If you’re contemplating selling a house in foreclosure in Delaware and don’t have the time or resources to go through the traditional litigation and foreclosure process outlined above, then you might consider selling to a cash home buyer.
Why would that make sense for you?
These buyers are typically investors who are willing to pay cash for houses in any physical or financial condition, so you don’t have to worry about making repairs or doing any staging. And they can also act quickly.
More importantly, you also don’t have to catch up on your payments or make amends with your lender. You can avoid foreclosure by selling.
At the consummation of the sale, the mortgage is paid off and a short sale is avoided. However, it’s important to be aware that cash buyers typically offer lower prices than you might get if you were to sell your house through a realtor. The catch with a realtor is that homeowners in foreclosure typically do not have enough time to list their home – hence the value of using a cash buyer.
Process for Selling Your House in Foreclosure in Delaware
So how can you sell your house while in foreclosure? Follow these steps:
- Determine the property’s value: To set the right selling price, gain a solid understanding of the property’s value. Research similar properties, seek advice from a real estate agent, or get an appraisal for an accurate assessment.
- Explore the short sale option: If settling your mortgage balance is challenging and traditional selling isn’t feasible, consider a short sale. This involves the lender agreeing to accept less than the full loan balance.
- Choose between on-market and off-market: Listing options for a property in foreclosure include real estate websites like Zillow, hiring a real estate agent, or opting for a cash home buyer (more details below).
- Market the property: Increase your chances of a successful sale by promoting the property online, on social media, and through traditional methods like open houses and yard signs.
- Carefully review offers: As offers come in, scrutinize the terms—evaluate the price, closing date, and any contingencies. Also, consider the financial stability, reputation, and financing capability of potential buyers.
- Negotiate the terms: If an offer piques your interest, negotiate terms with the buyer. It’s wise to consult with an attorney to ensure the sale aligns with your foreclosure circumstances.
- Finalize the sale: Once terms are agreed upon, the closing process kicks in. Sign the sales agreement, transfer ownership, and the buyer pays the purchase price. Any remaining mortgage balance is settled with the lender.
3 Options You Can Consider When Selling a House In Foreclosure in Delaware
List With An Agent
As a homeowner facing foreclosure, you have several options for selling your house.
One option is to list the property with a real estate agent. This option can be beneficial if you have a lot of equity in the property and you are able to sell it for a good price. However, listing with an agent can be time-consuming and costly, as you will have to pay a commission to the agent.
It’s often the case with foreclosures that any and all money saved, such as that of the agent’s commission, is truly money back in your pocket.
If you’re facing foreclosure you likely cannot afford the services of an agent. And on top of that, a realtor simply cannot sell your house fast enough to pay off the mortgage before the property is foreclosed on by the bank.
For Sale By Owner
Another option is to sell the property yourself, also known as “for sale by owner.” This option can save you money on commissions, but it can also be challenging, as you will have to handle all of the marketing and sales efforts yourself. So while you do save money compared to listing with an agent, you also still won’t be able to close the deal fast enough.
Delaware Cash Home Buyer
A third option is to sell the property to a cash buyer.
Selling to a cash buyer can be a quick and convenient option, as cash buyers are typically able to close on the sale quickly and without contingencies. This option can be especially beneficial if you are facing a tight deadline, such as an upcoming foreclosure sale.
One of the main advantages of selling to a cash buyer is that you can avoid the hassle and uncertainty of the traditional real estate process. With a cash buyer, you do not have to worry about financing or appraisals, and you can close on the sale much faster than you could with a traditional sale.
Another advantage of selling to a cash buyer is that you can often sell the property “as is,” which means that you do not have to make any repairs or updates to the property before the sale. This can save you time and money, and it can also be a good option if you are unable to make repairs due to financial or time constraints.
Overall, selling to a cash buyer can be a convenient and hassle-free option for homeowners facing foreclosure. If you are interested in this option, it is a good idea to research different cash buyers and compare their offers to determine the best option for you.
Sell Your House Fast For Cash In Pennsylvania
Foreclosure House Sale Delaware FAQ
How long can I remain in my house after foreclosure in DE?
Foreclosure in Delaware follows a judicial process handled through the courts. The timeframe for staying in your house post-foreclosure depends on your specific circumstances and the actions of the lender. Negotiating a repayment plan or a loan modification might allow you to avoid foreclosure. Once a judgment is obtained, and a sheriff’s sale is scheduled, you typically have to vacate the property within a few weeks of the sale.
Is there a redemption period for foreclosure in Delaware?
In Delaware, borrowers have the right to redeem the property up until the sheriff’s sale. To do so, the borrower must pay the outstanding balance along with any associated costs and fees. If the property is sold to a third party at the sheriff’s sale, redemption might not be possible.
What occurs after a sheriff’s sale in DE?
Following a sheriff’s sale in Delaware, the property is sold to the highest bidder. If sold to a third party, the lender receives the outstanding balance, and any excess funds go back to the borrower. If the sale doesn’t happen or doesn’t generate sufficient funds, the lender may file a deficiency judgment against the borrower. Alternatively, if the property is sold to the lender, they may repossess it and sell to a third party.
Can I sell my house to avoid foreclosure?
Certainly, selling your house is a viable option to prevent foreclosure in Delaware. If the sale amount covers your outstanding mortgage balance, foreclosure can be avoided. Negotiating a short sale with your lender, where they accept less than the full loan balance, is another potential solution.
How can I avoid foreclosure in Delaware?
Negotiating a repayment plan or loan modification with your lender is one way to avoid foreclosure. Selling the property through a traditional sale, a short sale, or to a cash buyer is also an option. If all else fails, you might redeem the property up until the sheriff’s sale by paying the outstanding balance and associated costs.
The findings and information in this article are focused on Delaware, however, it is applicable in many locations nationwide! Signature Properties is a full-service home buyer that purchases foreclosure properties to help homeowners in Wilmington, Newark, New Castle, Hockessin as well as New Castle & Sussex Counties.
Best Way To Sell My House In Foreclosure Delaware
Signature Properties provides the easiest and simplest way to sell your house in Pennsylvania. We buy houses through fair and honest cash offers.🙂 Whether you are avoiding the bank from foreclosure, coming into an inheritance, going through divorce or any other situation – we have real estate solutions to get you the outcomes you desire when you sell your house to us. We help homeowners with costly home repairs, mounting liens, code enforcement violations and even vacant homes. Are you trying to sell your house in surrounding areas or other counties and states near Pennsylvania? We buy properties in New Jersey and Delaware as well as many other towns! In fact, we buy homes all over Pennsylvania. Selling a house in foreclosure in Delaware is a very serious but doable project!