Disclaimer: This article is for educational purposes only and does not constitute legal advice. If you face a foreclosure hearing, consult a licensed North Dakota attorney to discuss your rights and options.
Detailed Answer
When co-owners decide to sell a jointly owned property before a foreclosure hearing in North Dakota, they must coordinate with each other, comply with mortgage terms, and meet state foreclosure requirements. Here’s how to prepare:
1. Review Mortgage and Ownership Documents
Obtain a copy of the promissory note and deed of trust or mortgage. Confirm the loan’s default status, notice requirements, and sale timeline under North Dakota’s power-of-sale statutes in N.D. Cent. Code Ch. 32-19. Verify the legal names and ownership interests of all co-owners on the property deed.
2. Communicate and Agree with Co-Owners
All title holders must consent to the sale. Draft a co-owner agreement that outlines who signs the listing contract, how sale proceeds will split, and how closing costs get allocated. Ensure every co-owner signs all listing and sale documents to avoid delays.
3. Obtain a Title Search and Pay Off Liens
Order a title search to uncover additional liens, judgments, or property tax delinquencies. Request payoff statements for each lienholder. You must clear these encumbrances at closing to deliver clear title. If the foreclosure sale price will not cover the mortgage balance, discuss a short sale with the lender or consider a deed in lieu of foreclosure under N.D.C.C. § 32-19-09.
4. Prepare the Property
Make cost-effective repairs to boost market value. Clean and declutter interiors and exteriors for showings. Obtain a recent appraisal or broker price opinion to set a realistic listing price that may avoid or shorten the foreclosure process.
5. List the Property with a Real Estate Professional
Hire a North Dakota-licensed real estate broker experienced with pre-foreclosure sales. Provide the broker with all signed co-owner authorizations. Use a listing agreement that names all sellers and states any special provisions related to payoff deadlines.
6. Coordinate Closing and Proceeds Distribution
At closing, the title company or closing attorney will pay off the mortgage and other liens, handle closing costs, and disburse any remaining funds to co-owners as per your agreement. If the sale proceeds fall short, each co-owner remains liable for the deficiency under North Dakota law unless the lender waives that balance.
Helpful Hints
- Start the sale process at least 60–90 days before the scheduled foreclosure sale date.
- Keep lines of communication open among all co-owners to prevent last-minute disputes.
- Get written lender approval if you plan a short sale or deed in lieu arrangement.
- Disclose any known property defects to buyers to avoid post-closing claims.
- Work with professionals (title company, broker, and attorney) experienced in foreclosure avoidance sales.
- Maintain organized records of all communications, payoffs, and closing documents.