You can sell a house you are behind on, and you can sell it after foreclosure has started. The right to sell survives right up until the foreclosure sale itself. What shrinks is the time available to arrange it, which is why the first job is finding out exactly how long you have.
Establish two things in writing. The first is your reinstatement figure, the amount that brings the loan current including fees, with a good through date, because the number grows as costs accrue. The second is the sale date if one has been set. Homeowners guess wrong about this constantly, and every option depends on it.
Equity decides which path is open. If the house is worth more than the payoff, a sale ends the problem cleanly: the loan is paid at closing, the foreclosure stops, and whatever remains after costs is yours rather than the lender\'s. A completed foreclosure rarely returns surplus to the homeowner in practice, so selling first is usually the difference between keeping something and keeping nothing.
If the payoff exceeds the value, you are looking at a short sale, which needs the lender's approval and takes considerably longer. Servicers will generally review a complete package, and the common failure is an incomplete application followed by an assumption that silence means refusal. Apply properly, keep copies, and note every date and name.
There are also loss mitigation options that do not involve selling at all. Repayment plans spread the arrears across future payments, forbearance pauses them, a modification changes the rate or term permanently, and a deferral moves the arrears to the end of the loan. If the hardship that caused the default has genuinely passed, one of these is usually better than any sale. Further reading at this article .
Timing is the reason cash buyers appear in these conversations. A conventional sale needs a buyer, a lender and thirty to forty five days that you may not have; a cash sale can close inside the window that remains. The trade is price for certainty, and whether that trade is worth making depends entirely on how many days are left.
Two real estate marketing warnings. Foreclosure filings are public records, so approaches by mail and phone will increase sharply once yours is recorded, and not all of them are legitimate. Never sign a deed over to anyone who is not paying off the loan at a closing, and be wary of anybody asking for money up front to stop a foreclosure. Legitimate buyers pay you at a title company, and legitimate housing counsellors do not charge for the advice.
