Detailed Answer
Disclaimer: This article provides general information under Iowa law. It does not constitute legal advice.
- Engage Professionals: Consider retaining a licensed real estate broker experienced in foreclosure sales and a real estate attorney. A broker can market the property while an attorney reviews contracts and statutory requirements under Iowa Code Chapter 654 (Iowa Code Chapter 654).
- Review Ownership and Liens: Obtain a title commitment from a licensed title insurer. Confirm all co-owners (as named on the deed) and identify encumbrances, including the at-risk mortgage and any judgment or tax liens.
- Obtain a Payoff Statement: Request a written, itemized payoff statement from the mortgage servicer. Ensure it covers principal, accrued interest, late fees and charges, and remains valid through closing.
- Secure Co-Owner Consent: Iowa requires unanimous written consent of all co-owners to list and sell jointly held real estate. Have each co-owner sign the listing agreement, disclosure form and closing documents.
- Prepare the Seller’s Disclosure: Under Iowa Code §558A.6 (Iowa Code §558A.6), sellers must provide a Residential Property Disclosure Statement. Disclose known structural, environmental or zoning issues.
- Complete Inspections and Repairs: Schedule inspections (foundation, roof, HVAC, pests) early. Obtain repair estimates, hire licensed contractors and keep invoices for closing adjustments.
- Clear Title Issues: Address clouds on title, such as unpaid taxes or subordinate liens. If co-owners dispute rights, consider a partition action under Iowa Code Chapter 651 (Iowa Code Chapter 651). Complete any necessary quiet title or lien release actions before sale.
- Coordinate Closing Timeline: Set the sale closing date before the foreclosure hearing. Provide the lender proof of pending closing to secure a waiver of the foreclosure notice or postpone the hearing upon payoff.
Helpful Hints
- Negotiate a short sale if market value is less than the mortgage balance; lenders may accept a deficiency waiver.
- Keep all communications and consents in writing to prevent disputes.
- Consult the county recorder’s office for the latest lien filings and property tax status.
- Allocate funds for closing costs, prorated taxes, recording fees and agent commissions.
- Ensure final payout at closing covers all liens to deliver clear title.