If you are in foreclosure and are in a good equity position with your home, chances are good that you’ve had investors already approach you about buying your redemption rights. I’m sure this has left you wondering if it’s in your best interests to sell them to a cash buyer.
Should I Sell My Redemption Rights?
Redemption rights are in place to let the homeowners redeem (buy back) foreclosed properties. If you are not in a position to redeem the home yourself, then selling your redemption rights to an investor can be another way to recoup some of your built-up equity.
I’m sure you’re wondering how much your rights are worth. That varies from house to house depending on variables such as the condition of the home and the price it went for at the sheriff sale vs its market value. The bigger the spread on sale price vs market value, the more your rights are worth. It can vary from $500 to $10,000+ so make sure you get multiple offers and don’t sell yourself short!
Can I Sell My Rights Before the Sheriff’s Sale?
Yes, you absolutely can. However, if other bidders are aware that your rights are already sold, it could discourage them from bidding at the Sheriff Sale. In Johnson County, investors aren’t allowed to file Assignments of Redemption Rights before the sale for this specific reason.
Can My Redemption Rights be Extinguished?
Yes, if your house is vacant, the high bidder at the Sheriff’s Sale can file a motion with the court to have your rights extinguished (taken away). If the rights get extinguished, the buyer at the sale will get possession of the home quicker than if they wait out the full 90+ day redemption period. You can object to this motion by going to the court hearing. If no one objects at the hearing, the motion will likely be approved. If you want to use your redemption rights to your benefit, make sure you watch the filings in your court case carefully so you can stay on top of what’s going on.
Selling Your Redemption Rights to a Cash Buyer
If you choose to sell your rights to an investor, make sure you do your due diligence. Get several offers instead of just one to ensure you are getting a fair price. It’s common for investors to offer much less than what you’re rights are worth so proceed cautiously. Make sure you find a reputable company to work with that can provide references.
A small company like Black Door Signature Homes is an excellent option. They understand your situation and have extensive knowledge of the value of homes in your area. They are a husband and wife team without employees and a lot of overhead, so they can almost always beat what other investors will be willing to offer. If you would like to keep living in your home, ask Black Door Signature Homes about their lease back option.
Don’t wait until it’s too late. Get local, expert advice and find out what you can do to take advantage of your redemption rights today. Contact Black Door Signature Homes now and get a cash offer for your redemption rights.