When facing repossession, is selling your home an option?

When it comes to home repossession or even worse, home eviction as a consequence of mortgage arrears, there are of course many options that can be considered before losing everything.

If you and your lender have exhausted every avenue but have still not found a solution, the next step is generally a court hearing or….there is the option of selling.

I recently spoke to a prospect who found himself in corner of being way behind on his mortgage payments and facing eviction however, he had been offered a way out and that was to sell his home, which he was very reluctant to but in the scheme of things and because he had left things to the last minute, he didn’t really have a choice.

Our caller had got in touch with us to see if we could make him a better offer as he had been approached by a leading UK “sell your home fast” company, who offered him 70% of what he believed his home was worth. I could tell from his voice that he felt he was being taken advantage of as a 30% discount was in property terms, a huge discount. 

I explained to him that generally, investors will look for a 20% discount in return for a quick sale turn around and that if he was being asked for a 30% discount, then there was more than likely some underlying challenges about the home that he may not have been aware of, as the buyer would have completed some extensive homework on his home before making him the offer.

The bottom line was that this caller had slipped into mortgage arrears, left the situation until he received a court hearing notice and was facing the prospect of losing his home. And, to further rub salt further into the wound, losing his home was just the beginning as there were further consequences like, having his credit rating destroyed and not being able to get credit for at least 5 years, still having to pay mortgage costs if the eventual sale of the house did not cover the amount borrowed and all the add on costs like the lenders court costs.

Selling your home at a discount to an investor, just so you can clear your debts, may be a bitter pill to swallow but, at least you can come through the ordeal with a clean sheet which can help put you back on the path of learning from your mistakes and starting again.

No one wants to lose their home or be forced to sell it at a discount, but if circumstances dictate, then selling your home before it is repossessed or you are evicted, may be your best option.