Can You Sell a House in Foreclosure Indiana?
Yes, you absolutely can sell your house in foreclosure in Indiana. However, the key to doing it requires you to have a signed offer for your house before it goes to auction. You can start by getting a free CASH offer here.
Indiana allows home sales to occur during foreclosure, but the process creates stress that you must expect. Losing your job, getting a divorce, or out-of-control medical bills can lead to foreclosure. Still, you can successfully sell your house in foreclosure if you do it before it goes to auction. Laws allow homeowners in cities across the state to protect their properties to avoid losing their money, and you can do it too.
Selling a House During Foreclosure in Indiana
When it seems almost impossible to avoid losing your house to foreclosure, you can actually find a way to prevent it. You can still sell your house in foreclosure if you act before it goes to auction.
While not complicated, the foreclosure process that the county court enforces has rigid rules that require you to inform your creditor and bank beforehand. Most states do not allow a bank to foreclose on a house when a legitimate offer exists. To stay on the safe financial side of saving your house and title, you must prove you have a cash offer. Then, you need to schedule a closing as fast as you can.
The advantages of selling your house in foreclosure far outweigh the disadvantages. With the information and tips in this guide, you can prevent your bank from putting your home up for sale at a sheriff’s sale. Please read through it to learn more about the steps that your county court requires in the process.
What Is Foreclosure?
Your loss and unhappiness result from foreclosure, causing stress and extreme discomfort. Foreclosure is a legal procedure that lets a mortgage company repossess your house. When you miss your mortgage payments in Indiana, you violate the terms of your loan.
Once a bank forecloses on your house, the lender can sell it to recover investment expenses. Then, some unpleasant consequences like these start to happen.
• Eviction from Your Home
The worst outcome of foreclosure makes you move out of your home, losing ownership. That means you lose everything you have put into it and must start over with nothing to show.
• Damage to Your Credit Score
Foreclosure lowers your FICO score, making it hard to get a house or buy anything on credit. In some cases, it makes finding a job more difficult.
• Deficiency Balance
When the sale of your house does not secure enough funds to cover the mortgage, it creates a deficiency balance. The lender may sue you to obtain the difference.
How Does Foreclosure Work in Indiana?
Three types of the foreclosure process can occur in Indiana. The least common requires your lender to file a lawsuit and get a judgment before they can sell your estate. Another type prevents filing a lawsuit if a power of sale clause exists in a deed of trust. The third type requires foreclosures to go through a judicial process when an equity loan, a reverse mortgage, or a property owners association makes the steps more complicated. The process requires your forbearance in any case.
The Process of Selling a House in Foreclosure in Indiana
The timeline in the foreclosure process in this guide gets your questions answered with facts from Forbes. The foreclosure process has six phases you need to understand.
Phase 1: Missing the First Payment
The first time you miss a payment, your lender may have a policy that gives you a 15-day grace period. You must pay an additional late fee if you fail to make a payment during the grace period.
Phase 2: Defaulting on Payment
If you habitually miss your mortgage payments, it can put you into default. Most lenders consider a failure to make a payment after 30 days a default.
Once a default occurs, the next steps depend on which types of foreclosure processes suit your case.
A judicial foreclosure process occurs in Indiana‘s court system because of a mortgage agreement that did not have a “power of sale.” On the other hand, a non-judicial foreclosure process lets your lender go ahead and foreclose on your home without a court order.
Phase 3: Receiving Notice of Default or Foreclosure Lawsuit
You receive a Notice of Default as a homeowner if you have a non-judicial foreclosure, letting you know how much you owe. The total amount you can expect to pay includes the mortgage amount, any late fees, and possible foreclosure fees. You have 90 days to clear up the debts.
If you cannot pay the amount, you can ask your lender to give you a new repayment agreement.
When you have a judicial foreclosure, your lender files a foreclosure lawsuit. Unless you want a judge to decide in favor of your lender by granting a default judgment in court, you must respond immediately.
After you respond, your case goes to trial. You can now seek legal guidance from a Indiana attorney.
Phase 4: Entering Pre-foreclosure
When your lender issues you a Notice of Default, a pre-foreclosure period begins and does not end until your home’s foreclosure action. You may pay the amount you owe or ask your lender for a relief or special payments plan as an alternative to avoid foreclosure.
You may consider selling your home if you do not have the funds to pay what you owe or if your lender does not agree to a new repayment agreement. Experts recommend selling your house during the pre-foreclosure period.
Phase 5: Receiving Notice of Sale
When you do not have the funds to repay the owed amount during pre-foreclosure, your lender asks your local paper to publish a Notice of Sale.
You may have as much as two or three months between the Notice of Sale and when your home goes to foreclosure auction. However, it usually takes much less time.
You can still sell your house during this time, but you need to keep your eye on the timeline to avoid foreclosure in Indiana.
Phase 6: Getting Evicted from Your Home
After the foreclosure, you receive an order to vacate your house. Usually, the occupants of a house get a few days to leave.
If you do not vacate, a local Indiana authority or a sheriff comes to your house to ask you to leave. You face the embarrassing situation of seeing the authorities impound your belongings if you choose not to act.
Obstacles When Selling a Home in Foreclosure in Indiana
You may easily sell your house in foreclosure in Indiana as some people do, but maybe not. You can learn about the potential obstacles in your path and how to deal with them spending too much time.
Owner Passed Away
Has someone named you as heir to a house facing foreclosure? If so, some issues that the probate process in Indiana creates often need a homeowner’s attention. You may need to talk to an attorney who understands probate and foreclosure for advice on your situation.
Ties to Litigation
Another unexpected problem you may run into occurs when a house has ties to litigation, such as bankruptcy.
The unpredictable bankruptcy legal process timeline means you cannot sell the house anytime soon. A lien on a home creates the same problem.
Owner Chooses to Conduct the Sale
You probably do not know how to sell real estate unless you have a real estate license. Many homeowners try to become their own real estate agents with the For Sale by Owner process, but usually, it does not work out. Your house needs attention before a sale, and the threat of eviction can keep you from providing it.
The shortest route to a quick sale in Indiana lets a real estate investor pay cash for your house. That way, you can avoid paying for repairs and closing costs.
Options Other Than Selling a Home in Foreclosure
You may not want to sell your Indiana home in foreclosure. You can consider a short sale as one option, and loan modification and refinancing offer other choices. Many sellers choose to sell when none of the options except short sale work out. Ensure you get a statement of approval from any co-owners when you decide to sell your home estate in foreclosure.
1. Loan Modification
A talk with your creditor may let you negotiate a path around foreclosure in Indiana with a possible loan modification. The benefits may let you extend the term of your existing loan, lower the rate, delay parts of your payment, or figure out other ways you can repay your loan.
You may delay your eviction this way, but remember to turn in the loan modification form within 45 days before the date for the foreclosure auction when your house gets sold.
2. Deciding to Refinance Before Foreclosure
A willing creditor may replace the mortgage you have with a new loan, avoiding losing your house. However, you must obtain new financing before the foreclosure process begins.
Changes in a new loan may benefit you with a lower interest rate and a longer term, saving you money. Some lenders even allow you to get equity from your house.
3. Getting a Deed in Lieu of Foreclosure
You can get rid of your debt and protect your credit score by getting a Deed in Lieu of Foreclosure that protects you from foreclosure. However, it means that you lose your home.
4. Short Sale
When you sell short, you get less than you need to pay your creditor. Some lenders agree to it for various reasons.
The value to you lies in avoiding foreclosure even though it still affects your credit history, a less damaging event. An Indiana attorney who practices in short sales may help you understand the process.
Indiana Foreclosure Resources
Indiana government provides housing assistance in your county that can help you prevent losing your home when you face the risk of foreclosure. In addition, foreclosure defense attorneys offer you a free consultation to help you find a solution. For example, call (812) 945-9200 in Floyd County or (812) 463-3909 in Vanderburgh County.
Selling a House in Foreclosure in Indiana – Common Questions
You can sell your home in foreclosure and benefit by meeting your bank’s timeline. A sale can prevent damage to your credit score and make you eligible to locate and purchase another house sooner. A great real estate agent can help you avoid a deficient balance.
How long does it take to foreclose on a house in Indiana?
Usually between 6 and 12 months, but we cannot say for sure. The timeline depends on your type of foreclosure process, your loan servicer, and the regulations in Indiana.
How do I stop a foreclosure auction immediately in Indiana?
Waste no time by getting a free consultation with a foreclosure attorney or calling the HOPE Hotline at 1-888-995-4673 to reach the Homeownership Preservation Foundation.
Does Indiana have the right of redemption after foreclosure?
Yes. If you face certain kinds of foreclosure actions, Indiana lets you reclaim your home after the foreclosure sale of your estate takes place.
Can I sell my home if I’m behind on my mortgage?
Yes, but you must do it before your creditor forecloses on your home.
Easiest Way to Sell a House in Foreclosure in Indiana
Since you now know how to avoid foreclosure by selling your home, you can turn your attention to getting it ready for sale. Even if you have no experience in handling estate sales, you can use these steps to sell your home before it gets foreclosed.
- Finding Your Home’s Worth
An appraisal can tell you the value of your house, but you can get almost the same thing from online tools. Instead, you can get an accurate estimate from a real estate agent who understands the financial outcomes of selling a home.
- Setting Your Asking Price
You must set a price that covers your unpaid mortgage payments, interest charges and late fees, house repairs, real estate agent commission, staging expenses, closing fees, and other charges.
Remember that a fair price at a loss works out much better for you than a high price and no sale.
- Informing Your Creditor
Check to ensure Indiana prevents your bank from foreclosing when you have a legitimate offer and gives you rights to an extra 30 days to sell.
- Selling It Yourself or With a Real Estate Agent
You probably need a real estate agent who can get homes listed for needed publicity. Because of the pressure to sell soon, we suggest working with an agent or a cash home buyer in Indiana.
- Getting an Offer and Negotiating
Your income takes a hit when you face the reality of getting nothing for your house at auction. Instead of waiting for cash for house companies to give you an offer, get many bids from reliable home buyers in Indiana. Compare the price and the benefits, such as no closing costs, fees, repairs, or hassle.
- Letting Your Mortgage Lender About Your Buyer
A cash offer can stop foreclosure as long it qualifies as legitimate. Most creditors only want their money back and agree to let you sell your house instead of the hassle of auctioning it.
- Closing the Property Sale
The last step requires you to pay your lender what you owe.
You have a better chance of getting a high cash offer when you start looking for offers as soon as possible.
A free cash offer from a company that pays cash for houses can save you the hassle of foreclosure. You get paid fast and avoid agent fees, repair expenses, and closing costs with an as-is deal in Indiana.