Considering everything that is going on in the world right now, selling your home can seem like a monumental task. To help you understand the ways circumstances outside of your control may impact the sale of your home, let’s see what the end of the foreclosure moratorium will mean for home sellers in Broadview Heights.
What Is the Foreclosure Moratorium?
On March 18th, 2020, the United States federal government put in place a temporary halt to both new and existing real estate foreclosures on single-family properties financed through mortgages insured by the Federal Housing Administration.
The order is part of the Coronavirus Relief and Economic Security Act, or CARES Act, and was specifically designed to provide relief to individuals and families under increased financial stress due to ongoing complications involving the nationwide Covid-19 outbreak. Originally scheduled to expire earlier in 2020, the foreclosure moratorium was extended through December 31st, 2020.
It’s important to note that the foreclosure moratorium states that any individuals able to continue paying their mortgage or rent should continue to do so, or at least to the best of their ability. The Federal Housing Administration also strongly urges distressed tenants and residents to clearly and thoroughly have a good-faith discussion with their lender or landlord to work out the best payment plan moving forward.
How Is the Market Affected?
With the foreclosure moratorium scheduled to expire at the end of the year, many current home sellers are looking to complete any transactions prior to the expiration due to the potential for market instability and the uncertainty that may follow.
After the moratorium has been allowed to expire, there may be a large increase in foreclosure court filings. There recently has been an increase in foreclosure court filings for homes not covered by the moratorium in certain states, but this may not be an indicator of a more pervasive trend in the future.
In the event that the moratorium expires and foreclosures increase rapidly, you can expect a real estate market populated by properties for sale under the ownership of the mortgage companies. In these cases, it’s likely the mortgage companies will want to reduce their losses on the properties as much as possible, while also offloading the properties as quickly as possible.
The potential danger to your home sale in this situation is if the mortgage companies are simply looking to slash prices, dump the properties to squeeze any value they can out of them by cutting their losses, and leave your local property values in a downturn.
A scenario like this would likely have long term local consequences since home prices, property values, and even individual property taxes are eventually in part determined by the recent sale prices of equivalent homes in your local area.
However, do keep in mind that in order for the moratorium to expire it has to be allowed to expire, and it’s unlikely a federal governmental body would willingly allow the above set of circumstances to run their course.
What Can I Do?
As an individual home seller in a much larger market, the best thing you can do is what you should always do when trying to sell your property: Take exceptional care of the property, price it reasonably, listen to the recommendations of your agent, do your best to accommodate showings, and be willing to both give and take during negotiations.
The foreclosure moratorium is currently in place to assist those finding themselves in need due to circumstances unprecedented in modern history, and those in charge hold the responsibility to maintain as much normalcy for those people while they ride out this hardship. Remind yourself of the worthwhile property you’re bringing to market, and how it can better the lives of those who show interest in it.