How to prevent foreclosure - Sell directly to a private investor

If the date of the foreclosure auction is getting closer, and you don’t have the time and money to sell through a realtor, you may need to consider selling your home directly to a private investor, if foreclosure is to be avoided.

Because time and money are short when are foreclosure is underway, selling at a discount to a reputable investor may be the best way to both avoid foreclosure and keep a portion of your equity, while preventing your credit from being damaged by a foreclosure.

Prevent foreclosure - avoid the sharks

Homeowners should be cautious when working with private investors.  While many private investors are reputable, be aware that some are not.  Often, private investors will want to take advantage of your situation and attempt to pay as little as possible for your house as possible,  perhaps just the moving costs and a few thousand dollars more. 

They know that, if you don’t sell prior to the foreclosure auction, they can often buy your house for the amount of outstanding debt.  By waiting until the last minute, they know that it is more likely you will accept a very low price to avoid the consequences of foreclosure.

Prevent foreclosure - investors need to make a fair profit

Private investors usually make offers for properties facing foreclosure below full-market value, especially if they are flipping the property (i.e., making repairs and reselling the property.)  To make a fair profit they need to be sure the price is discounted enough to pay for repairs, monthly payments, maintenance, other holding costs, and selling costs.  Put yourself in their position, they are assuming risk - and for that reason any offer they make will likely be less than that of an owner-occupier.