Disclaimer: This information is not legal advice. Consult a qualified attorney licensed in Kentucky to discuss your specific situation.
Detailed Answer
When two or more people own property together in Kentucky and face an impending foreclosure hearing, a coordinated sale can help preserve equity, satisfy the mortgage, and avoid a court-ordered sheriff’s sale. Follow these steps under Kentucky law (see KRS Chapter 426 (Foreclosure)):
- Confirm Ownership Interests: Review the deed to verify whether you hold the property as joint tenants with right of survivorship or tenants in common. If you’re tenants in common, each owner may sell their share independently, but a unified sale typically yields a better price.
- Check Foreclosure Status: Obtain the foreclosure complaint and notice of sale from your county clerk. Under KRS 426.300, the lender must file suit and serve notice. Make sure the hearing date and redemption rights (per KRS 426.310) are clear.
- Title Search and Liens: Hire a title company or real estate attorney to identify outstanding liens, unpaid taxes, or judgments. Clearing secondary liens before closing prevents surprises at settlement.
- Obtain Appraisal and Market Analysis: A professional appraisal or broker’s price opinion establishes a firm asking price. Sellers typically net more by pricing competitively and marketing to prequalified buyers.
- Notify Co-Owners and Lender: Discuss the sale plan with all joint owners. If the loan holder agrees to a short payoff or “deed in lieu,” you may avoid foreclosure entirely. Lender negotiations often pause the foreclosure process (KRS 426.360).
- Prepare the Property: Clean, declutter, and make minor repairs. First impressions drive offers. Obtain a municipal “certificate of compliance” if local codes require it before sale.
- List With a Qualified Realtor: Choose an agent experienced in pre-foreclosure sales. Ask for a marketing plan that reaches investors and owner-occupants to close before the foreclosure hearing.
- Coordinate Closing Logistics: Work with your title company to satisfy the mortgage payoff at closing. Distribute net proceeds according to ownership percentages or as agreed in your co-ownership agreement.
- File Sale Documents With the Court: If the foreclosure hearing is already set, submit a motion to dismiss or notice of sale closed before hearing. Include the closing statement and payoff letter to demonstrate the debt is satisfied.
Helpful Hints
- Act Early: Start 60–90 days before the hearing to allow time for appraisals, marketing, and lender negotiations.
- Budget for Costs: Plan for real estate commissions, closing fees, outstanding taxes, and pro-rata mortgage interest.
- Keep Records: Document all communications with co-owners, the lender, and service providers.
- Understand Redemption Rights: In Kentucky, borrowers can redeem property up to the sale date (see KRS 426.310).
- Consider Mediation: Some lenders participate in court-approved foreclosure mediation programs to explore sale or loan modification.