In Vero Beach, can I sell my home in foreclosure?

This a sample dialogue that a seller might have with a real estate investor regarding the sale of a home in foreclosure in the city of Vero Beach, Florida. If you are in this situation, hopefully you will see your options more clearly as you read. Maybe you’ll also see that when working with a real estate investor the process doesn’t need to be overwhelming.

Jennifer: (sipping her coffee nervously) Thank you for meeting me, Thomas, my neighbor was in a similar situation but I didn’t feel it was right to approach her for advice.

Thomas: (smiling warmly) Of course, I’m glad you reached out. Let’s talk through everything and figure out the best solution. I was able to glean a little from your phone call but could you tell me more?

Jennifer: Well, As you know, I’m in foreclosure. The bank sent me the notice a few months ago, and I’ve been scrambling, trying to catch up on payments, but it’s too much. My name is the only one on the property deed so it’s just me and my child. Now, I’m wondering… can I sell my home in foreclosure?

Thomas: (nodding thoughtfully) That’s a tough spot, Jennifer, but I’m glad you’re making the steps to get back on track. The short answer is yes, you can sell your home in foreclosure, but the process depends on where you are in the foreclosure timeline. Let’s start there. How far along is the bank?

Jennifer: (opening the folder and pulling out documents) Wells Fargo sent me the notice of default four months ago. They’ve scheduled a sale date for the property at the Vero Beach courthouse in about six weeks. I’m so stressed about this I can’t even do my job searching anymore.

Thomas: (reviewing the documents) Okay, so you’re in pre-foreclosure. That’s actually good news because it means there’s still time to act. Selling during pre-foreclosure can be a way to avoid a foreclosure auction by the Sherriff and limit the damage to your credit. Have you tried listing the property with a realtor?

Jennifer: I have spoken to someone at Weichert, but I’m worried it’ll take too long. Houses that are farthest away from the Indian River Mall aren’t selling quickly, and I can’t afford to wait. That’s why I reached out to you. I visited your website and saw you specialize in buying properties in situations like mine.

Thomas: That’s true. I work with homeowners in foreclosure, and I can often close faster than a traditional buyer going through a realtor. But first, let’s go over your financials. Do you know how much you still owe on the mortgage?

Jennifer: (pulling out more papers) Yes, here’s the latest statement. I owe $205,000, including late fees and penalties.

Thomas: (studying the statement) And do you have an idea of what the house is worth right now?

Jennifer: My friend’s house near Storm Grove Middle School right off 62nd Avenue is similar to mine and it was about $275,000 three years ago but mine is an older house and the porch is in bad shape, so I’m not sure.

Thomas: Got it. The value and condition are important factors. If the property’s worth $275,000 and you owe $205,000, that gives us a margin to work with. Have you had any offers from other investors or buyers?

Jennifer: Not yet. You’re the first person I’ve seriously talked to about this.

Thomas: (nodding) Alright, let me explain something here. If you sell to an investor like me, I’d make a cash offer based on the property’s current condition and market value. It’s fast, but the offer might be below what you’d get with a traditional real estate agent. Our niche centers around that discount so we can pump money into repairs. Without the repairs, you would be taking that discount anyway on the open market with a realtor. So the main difference in working with us is that we offer speed.

Jennifer: I’ve heard about the term ‘short sale’. Does this come into play here?

Thomas: Maybe, but I can guide you if that’s the best option for you. Basically, you’d list the home through a real estate agent, find a buyer, and then ask the bank to approve the sale for less than the loan balance. The main takeaway is showing the bank that a short sale is better business for them than foreclosure. But honestly, the whole process can take months, and at this point there may not be enough time.

Jennifer: And what about the option of selling directly to you? How would that work?

Thomas: If you sell directly to me, I’d do a quick evaluation of the property—probably within a day or two. Then, I’d make you a cash offer. If we agree on the price, we’d sign a purchase agreement, and I’d handle the closing process. We could close in as little as two weeks, well before the auction date.

Jennifer: (leaning forward) That sounds more straightforward. But I’m worried about how much I’d get. Would it be enough to pay off the mortgage and maybe have a little left over?

Thomas: (hesitating slightly) That depends on the numbers. If the house is worth $275,000, I’d factor in the repairs, closing costs, and my margin as an investor. My offer might be in the range of $200,000. It’s below market, but it would stop the foreclosure and save your credit.

Jennifer: (looking disappointed) $235,000… I was thinking it might be lower than ideal, but I understand how the costs can warrant that. It’s just that when I moved to Vero Beach I bought this home as an investment and I now see that my plans haven’t worked out.

Thomas: I get it, Jennifer. And only you know what’s best for you right now. If you’re comfortable sharing, with all that’s been said here what are you expecting? Are you just trying to pay off the mortgage? Do you need extra for moving expenses?

Jennifer: Honestly, both. I’d like to stay in Vero Beach with at least $5,000 after paying the mortgage. I need that to start over without having my credit damaged too much.

Thomas: (nodding) Alright, let me see if we can make that work. If I buy the house for $205,000, you’d clear the mortgage and have some funds left. But I’d need to confirm the repair costs before finalizing the offer. How does that sound?

Jennifer: (relieved) That sounds fair. What do we do from here?

Thomas: I’ll do some comps of homes in the area today and send you a tentative agreement by email. If the agreement is in order I can do an inspection of your house and finalize the numbers with you by the end of the week. Does that timeline work for you?

Jennifer: Yes, it does. Thank you, Thomas. Just hoping I can get this weight off my shoulders soon.

Thomas: I’m glad we’re making progress here. Remember, you’re not alone in this. We’ll get it all sorted out.

Jennifer smiles, visibly more relaxed, as they finish their coffee and discuss the next steps.

Things to remember about the process

If you as a resident of Vero Beach are being foreclosed on and are considering engaging with a real estate investor, you are more fortunate than many others in your situation. First, because of the higher class area of Florida that you live in your property isn’t a dead asset. Had you been living in a state like Montana or Nebraska it would be much harder to emerge from foreclosure in good shape because of the lack of demand. This fact translates into another benefit for you as the real estate investors in Vero Beach are of higher caliber. Below are listed some other benefits of dealing with a real estate investor during the foreclosure process.

• If the real estate investor is competent, you can expect relief from your situation within days or weeks. This is a major point here as you can just sit back and let the investor do what they do best. Maybe a good parallel would be a doctor/patient relationship where expertise is everything.
• You can get cash at the closing which helps make your new start a fresh one. Of course this depends on how your deal is structured with the real estate investor but this is a possibility.
• With all of the stress that an imminent foreclosure provides, you are able to minimalize your responsibilities and thus make better decisions in your work and personal life. Vero Beach has a wonderful bus system between the Indian River Mall and the Vero Beach Outlets. You can take some time visiting your favorite places as you clear your head and get your affairs in order.
• You can avoid foreclosure! By mitigating the negative factors on your credit score you are enabling a better life for yourself as you move forward.