Can I Sell My Home if It Is in Foreclosure? Why Time Is of the Essence
Life sometimes throws us curveballs, such as death, divorce, job loss, or medical bills. And along with those curveballs might come a fastball: missed mortgage payments.
It’s natural to feel paralyzed with sadness and a sense of panic when those overdue notices come from your mortgage company. Overwhelmed, you might ignore the problem, hoping it’ll just go away. Or perhaps you start to believe that the only option is losing your house. But then a flicker of hope sparks a question in your mind: “Can I sell my home if it is in foreclosure?”
DISCLAIMER: This article is meant for educational purposes only and is not intended to be construed as financial, tax, or legal advice. HomeLight always encourages you to reach out to an advisor regarding your own situation.
The answer is often “yes,” but you’re going to need to acknowledge the situation, and then take prompt, decisive action.
“The best advice I can give to sellers facing foreclosure is don’t wait till the last minute,” says Bethany Mendoza, top real estate agent in the Modesto, California, area who’s helped clients navigate selling their homes to avoid foreclosure.
“Don’t wait until your foreclosure is 30 days away from the sell date. That’s what homeowners typically do because they’re in denial. That just puts you in a dire situation where you have to sell aggressively, which leaves money on the table,” she explains.
If you’ve exhausted your options for working out an arrangement with your lender to stay in the property, then you need to act sooner rather than later to get the house sold — or prepare to face the ramifications of home foreclosure.
When does foreclosure begin, and how long does it take?
If you’ve missed a few mortgage payments, you’re probably wondering when your lender will begin the foreclosure process. The answer is: It depends.
Foreclosure rules, processes, and timelines vary by state and among mortgage companies. According to HUD, mortgage companies typically begin foreclosure three to six months after your first missed mortgage payment.
After about three months of missed payments, you’ll likely receive a Demand or Notice to Accelerate letter. This letter tells you how much you owe and typically gives you 30 days notice to get your balance current. Lenders send registered letters so that they have legal proof of communication.
From the date of the Demand Letter, HUD’s guidelines note that it can be as little as two to three months to the scheduled sale of your property if you take no action to square up with the mortgage company.
Depending on your location, the timeline could be much longer. According to ATTOM, in Louisiana, foreclosure took an average of 3,045 days to complete in Q3 2023, and in Hawaii it took 2,457 days. Nationally, it took an average of 770 days to foreclose on a home.
