Can I sell my house while it is in foreclosure?

When a house goes into foreclosure, the bank begins a process to repossess the property on which it has a lien. Typically, foreclosure proceedings begin after one or two missed payments and can take up to a year or more to complete. While the foreclosure process is ongoing, the homeowner has a variety of options.

Can I sell my house during a foreclosure?

Yes, you can still sell your property during a foreclosure, since you still have a legal right to the property and any equity you have built on it. Many times, homeowners will try to negotiate a short sale with the lender. Short sales allow the property owner to sell the home for what he can get for it. The bank generally forgives any outstanding balance or can only claim a portion of the balance in accordance with state law.

You may be able to get a stay of foreclosure

While selling the property is an option, it may be possible to prevent your lender from moving forward with a foreclosure proceeding. This can be done by filing a Chapter 7 or Chapter 13 bankruptcy. During the time of the stay, it may be possible to work out an alternative payment plan. If you file for Chapter 13 bankruptcy, your debt will be reorganized and the stay will be in effect as long as all payments are made in accordance with the bankruptcy plan.

Know your rights under the law

You may want to consult with an attorney before taking any steps to sell the home during foreclosure. Ideally, you’ll work out a payment plan with your lender, sell it short, or sell it outright. Before going on a short sale or selling it outright, make sure there are no clauses in your mortgage that prevent you from paying upfront or from making a deal. With the help of an attorney, it is possible to delay a foreclosure without filing bankruptcy while still allowing the borrower to sell their home.

Can I sell my house? That’s probably the most important question on your mind when you first hear that you’re about to foreclose. Fortunately, the answer is yes, and there may be no penalties for doing so. So don’t be afraid to put your house on the market instead of leaving your fate in the hands of a bank.