Preparing a Jointly Owned Property for Sale Before a Foreclosure Hearing

Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.

Detailed Answer

1. Identify the Ownership Structure

Before any sale, confirm whether co-owners hold the property as joint tenants or tenants in common under Arkansas law. Joint tenancy allows each owner equal rights, including survivorship. Tenants in common own specific shares without survivorship rights. See Arkansas Code §18-12-201 on joint tenancy: arkleg.state.ar.us/§18-12-201.

2. Review the Loan and Foreclosure Process

Examine the mortgage agreement, payment history, and foreclosure notices. Arkansas Code §18-50-101 et seq. outlines nonjudicial foreclosure procedures, including notice requirements and sale timelines: arkleg.state.ar.us/§18-50-101. Missing deadlines can invalidate the sale.

3. Communicate with Co-Owners

Open a clear dialogue. Share mortgage statements, foreclosure notices, and cost estimates. Agree on selling price, division of proceeds, and responsibilities for repairs or closing costs.

4. Obtain a Current Market Valuation

Hire a certified real estate appraiser or local real estate agent to determine fair market value. A professional valuation supports pricing decisions and strengthens negotiations with lenders if you seek a short sale.

5. Make Necessary Repairs and Clear Title Issues

Address health or safety deficiencies (roof, plumbing, electrical). Resolve outstanding liens or unpaid property taxes. A clean title accelerates closing and avoids lender objections.

6. Explore a Partition Action (If Co-Owners Disagree)

If co-owners cannot agree on sale terms, one owner can file for partition in chancery court under Arkansas Code §16-65-201: arkleg.state.ar.us/§16-65-201. The court may order a sale and distribute proceeds per each owner’s share.

7. File Motions to Protect Your Interests

Before the foreclosure hearing, consider filing a motion to postpone or set aside the sale if you can show substantial progress toward selling the property. Providing the court with an executed listing agreement or sales contract can persuade a judge to grant additional time.

8. Close the Sale and Allocate Proceeds

Once a buyer is secured, coordinate with title or escrow agents to handle payoff of mortgage, liens, and closing costs. Distribute net proceeds according to the co-ownership agreement or court order.

Helpful Hints

• Gather all loan and ownership documents in one folder.
• Keep detailed records of communications with co-owners and lenders.
• Obtain multiple repair estimates to minimize costs.
• Consider a short sale if market value is below the debt balance.
• Use certified mail for all legal notices to establish proof of delivery.
• Consult a real estate attorney early to review contracts and court filings.