If you are facing foreclosure in Winnipeg, you may feel anxious, frustrated, and confused about how to move forward. You may have already missed one or more payments on your mortgage and received a foreclosure notice from the bank. So now you might be asking yourself, “Am I still able to sell my home before foreclosure?” The answer is YES. Many people do not realize they are able to do this. You can still have control over what happens during the foreclosure process and sell your home before the property goes up for auction, which will distance you from your damaged credit, allow you to receive cash back from your equity in your home, and give you an opportunity to completely reset your finances. Let’s break down how to sell a house in foreclosure in Winnipeg.
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What Is Foreclosure in Winnipeg?
In Manitoba, the technical term for what is often referred to as foreclosure is called a judicial sale; that’s how this process operates in Manitoba. In Manitoba, if you fail to pay your mortgage (typically 3 or more missed payments), the lender can request that the Court of King’s Bench sell the property in order to recover its outstanding balance due to you.
The steps associated with the process of foreclosing on property in Manitoba include:
- The lender provides written notice in the form of a demand letter.
- The lender may file a claim in the Court of King’s Bench.
- Redemption Period established (generally 6 months).
- If the balance remains unpaid, the Court orders the sale of the property (Judicial Sale).
- Redemption Period is the time that is available for you to sell.
Can You Sell a House in Foreclosure in Winnipeg?
You can redeem your home before it goes to the foreclosing party for public sale, provided that you act within the redemption period.
While you own the property during the redemption period, you have the right to list the property for sale; accept offers on the property; and use the proceeds of the sale to pay off your loan and other payments that have not been made.
How to Sell a House in Foreclosure: Step-by-Step
1. Find Out What You Owe
The first step to selling your home and coming out ahead is to find out how much you owe including all late charges, the number of missed payments and court fees. You can request a full payout statement for your mortgage by contacting your lender.
2. Determine the Value of Your Home
You need to find out what your home is worth. This will give you an idea of how much money you will get from the sale. If the value of your home is greater than what you owe, then you can walk away with cash after selling.
3. Decide How You Want to Sell Your Home
- Option A – List with Realtor (Longer Process): If you decide to list your home with a licensed realtor, it can take 30-90 days to sell your home and receive your funds. If you do not have that much time remaining on your redemption, then this option may not be fast enough.
- Option B – Cash Buyer (Shorter Process): If you sell to a cash buyer (i.e. investor or private buyer), you could receive cash and close in as little as 7-14 days. There are no repairs required, no showings, and no commission fees for a realtor.
4. Contact Your Lender
As soon as you receive an accepted offer, get in touch with your lender right away. Most of the time, they will stop any foreclosure activity as long as they can see that there is a valid sale happening.
5. Hire a Real Estate Lawyer
In Manitoba, only lawyers can process residential real estate transactions. They will make sure your mortgage is paid out through the sale proceeds and all necessary documentation for transferring title, including any required liens, is executed.
What If You Owe More Than Your Home Is Worth?
If you have negative equity or are “underwater,” then you have 3 (three) options:
- You can negotiate a “short sale” with your lender or mortgage company that allows them to accept less than what you owe.
- You can work out a “loan modification” or “repayment plan” with your lender;
- Finally, you can seek advice from a licensed insolvency trustee who will discuss your options for debt relief.
Conclusion: You Have Options — Act Fast
Do not wait until it is too late; take action as soon as possible to prevent foreclosure from hurting your credit or losing equity from your home. Taking action quickly provides more possible solutions to your problem, so you can find one that works best for your needs.
If you are looking for assistance selling your home quickly without any hassles, then AJ Buys Houses can help you get a fair, no-hassle offer on your home. We will not require you to make any repairs or pay any closing costs, and we will make sure that you are able to close quickly and easily, providing you with peace of mind during this stressful time.
Frequently Asked Questions
Can I actually sell my house if it’s already in foreclosure?
Selling a property during a divorce proceeding can be one of the smartest moves that you can make. If a judge has not yet finalized your sale of the house, your name will continue to appear on its title. This means that you can still list and accept offers for your home, as well as use any sales proceeds to pay off your mortgage. Unfortunately many homeowners in Winnipeg fail to find this out until it is almost too late for them; therefore, the sooner you take action the more options you will have.
How much time do I have to sell before it’s too late?
Manitoba provides a redemption time period, normally about six months, that begins when the lender files it with the court. This allows for an opportunity to sell your business according to its own terms during this legal time period. Although you may feel as though you have a long time period, this period has not yet. If you’ve already been through a few months of your redemption period and are open to cash offers with no inspections, it may make sense to use a cash buyer that can close the transaction within seven to fourteen days.
Will selling my house stop the foreclosure?
After selling your home and paying off your mortgage from the proceeds of the sale, all foreclosure proceedings cease completely. The lender receives their funds; the case is heard in court, but then becomes closed, leaving you with no further obligations to pay anything. It’s much cleaner than allowing the bank to proceed with its own sale.
What if I owe more on my mortgage than my home is worth?
More often than you’d expect, this happens all the time. However, you do have choices when it comes to achieving a successful outcome. One option that might work is to contact your mortgage lender to discuss your possible options to do a “short sale” where your mortgage lender agrees to reduce the amount of money they are owed to allow for a successful sale of your home. Although this is not a guaranteed outcome, many lenders prefer to pursue a short sale rather than going through an extended court process. Consult with a qualified real estate attorney or insolvency trustee in Winnipeg to determine the best possible course of action based on your specific situation.
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