Foreclosure is a scary term that most homeowners would prefer to never hear. However, sometimes you fall behind on your loan payments or a life change affects your ability to pay your mortgage and you’re left unable to avoid foreclosure on your Kansas City house. And once that ball starts rolling it can be hard to know what to do in order to keep your house in Kansas City. If that’s the case you might consider selling your house in foreclosure, which is possible to do but requires some very specific processes.
If you want to sell your house in foreclosure in Kansas City, you have options. Selling your house to a company that buys houses in Kansas City is a great way to sell your Missouri house fast and avoid foreclosure. But you have other options to considering as well, depending on your situation. Let’s take a closer look at whether or not you can sell a Kansas City house in foreclosure.
Missouri Foreclosure Law
When you own a house in Kansas City, Missouri, there are certain rules and laws in place when it comes to foreclosure and how it affects your house. First, most deeds in Missouri include a provision that requires any lender to send the owner a breach letter notice that informs you that they intend to foreclosure before they can begin the process. This gives you the opportunity to fix the issue and make the loan current.
If you do end up defaulting on your mortgage, your lender is allowed to begin foreclosure through a judicial or nonjudicial method.
A judicial method is when the lender files paperwork with a court allowing the sale of your Kansas City house. If you don’t respond, the lender automatically wins. But if you do respond, the court will review the evidence and determine who is correct. If the judge rules against you, your house will be sold to satisfy the loan.
A nonjudicial method means that the lender will complete procedures laid out in Missouri statutes in order to foreclose on a house. They will mail a foreclosure sale notice to you, post notice of the sale in a newspaper, and then proceed with an auction sale. This is the more likely version of foreclosure that you will face as lenders prefer to avoid courts.
What is Pre-Foreclosure?
When you have a mortgage, you are required to make timely payments in order to stay current on repayment of the loan. But if you start to fall behind on your mortgage payments, you’re going to alert your lender or bank that you might eventually not make good on repayment of the loan and could potentially lead to foreclosure. If you fail to make payments after a short period of time, often a few consecutive months, your lender is going to make contact with you with a default notice for the property. This notice will let you know that the lender is going to begin the foreclosure process on their end if you don’t immediately satisfy the outstanding amount due or contact them to work out an arrangement. This is what is essentially the start of the pre-foreclosure process, which is a time period after you have been notified of the potential for foreclosure but before the bank actually takes possession of your house.
Pre-foreclosure is your opportunity to work out a deal or solve the problem before the lender begins the actual foreclosure process on your house. During pre-foreclosure, you won’t lose your house and you have anything taken away from you, but it’s like a final warning from the lender that they will follow through of foreclosure if you don’t provide a solution.
What is the Foreclosure Process in Kansas City?
When it comes to foreclosure, there is a specific process you need to be aware of for your house in Kansas City. When you miss a payment on your mortgage, most lenders will give you a grace period to make good on the payment. If you are unable to pay at that time, there will be late charges added to the total. Under federal law, the mortgage lender must contact you to discuss some repayment options. But if you are unable to do so, Missouri law requires them to send you a breach letter that informs you that you are in default and they intend to foreclose on your Kansas City house. Federal law dictates that foreclosure can’t begin until the loan is at least 120 days past due.
At that point, the lender will pursue foreclosure either through a judicial method or a non-judicial method. And if you do not answer the letter or they win the case, they can begin the process of selling your Kansas City house at auction. At the auction, the lender makes what is called a credit bid, that other bidders can attempt to match. If a third-party bidder pays more than the lender, you are entitled to some of those leftover profits after the loan is satisfied.
Can You Sell a House in Foreclosure in Kansas City?
The good news is that it’s possible to sell a house in foreclosure in Kansas City. Ultimately, your lender just wants to get the money back that they’ve loaned you and they leave the door open to satisfy that loan in a few different ways. These sale options don’t always get you the most money possible for your Kansas City house but in a situation like this, it’s often better to get what you can and avoid foreclosure altogether.
Remember, until the bank sells your house at auction or takes away ownership of the property, you are able to sell your Kansas City house yourself. And you might want to consider doing so to pay off the loan and get yourself out of a messy situation.
How to Sell a House in Foreclosure in Kansas City
When it comes to selling a house in foreclosure in Kansas City, the biggest decision you need to make is how you want to sell the house.
If you want to guarantee that you can sell your house fast and get cash for it quickly, you’ll want to sell your house to a cash buyer like KC Property Connection. We buy houses in foreclosure and we pay cash for them. Plus, we can close on your timeline, so if you need to close in a matter of weeks to avoid foreclosure, we can work with you on that. The best part of working with a cash buyer is that you don’t need to make any repairs or sort out the financial issues before selling. Cash buyers like KC Property Connection buy houses as-is, which means current condition. You also avoid any unnecessary fees and costs associated with selling a house through a real estate agent. Accepting a cash offer on your house has never been easier.
If you do decide you want to sell your house in foreclosure on the housing market, you’ll probably want to hire a real estate agent to guide you through the process. Keep in mind that real estate agents take a commission fee when selling your house, which is often 4-6% of the final sale price. That’s a big chunk of money that comes directly out of any profits you might have been hoping for.
You might also want to consider a short sale, which is when you offer your Kansas City house for sale at a price below the amount you currently owe. If your lender signs off on a short sale, you’ll need to negotiate a payoff number with them and then get approval on the home purchase from the lender. Ultimately, the lender runs the show on a short sale but at least you’ll be able to sell the house.
Documentation Needed When Selling a House in Foreclosure
It’s important to be aware of the documentation needed when selling a house in foreclosure. You’ll want to keep these handy and know where they are at all times, which will make life easier for you and any potential buyer.
The most important documents of all are the original loan documents, which should include the promissory note and the mortgage. If it’s a judicial foreclosure, you’ll want to have the complaint of foreclosure you received. If it’s a non-judicial foreclosure, you’ll want to have the notice of default. Any lender documentation that includes a stamp or official signature is important to have. A notice of lis pendens is a legal letter sent to your county courthouse that shows the property is in the midst of the foreclosure process. And a property appraisal is critical to have handy to determine your house worth.
As you’ve read, you can sell a Kansas City house in foreclosure. However, you need to make the right decisions for yourself in order to know what the best outcome could be. If you need to sell your Kansas City house fast and want to get cash for it to help deal with any impending foreclosure, contact KC Property Connection today and we’ll help you out! We buy houses in Missouri and we want to work with you.