How To Sell Your House Before Foreclosure

Are you in the midst of a foreclosure process? Do you need to sell your house fast to stop foreclosure and keep your credit score from plummeting? If so, you’ve come to the right place. Here, we will detail how you can sell your home for a fair price before the mortgage company can seize the property. 

We will also explain the pre-foreclosure process and how home buyers can stop a foreclosure auction. If you’re wondering, “Can I sell my house before foreclosure?” you will find all the steps you need to complete the home sale below. Now, let’s get started!

foreclosure process in Texas

Your Guide to the Foreclosure Process in Texas

For Texas homeowners facing foreclosure, it is essential to learn about the specific process in Texas. First, you will need to understand terms like a mortgage lender, lienholder, borrower, and deed of trust. 

A guide on Texas foreclosure laws outlines how a deed of trust creates a lien on a property, which means a borrower owes the lender money. The lender can foreclose on the property if the financial obligation isn’t met.

In Texas, there are three parts of a legal foreclosure, which include:

  1. The mortgage company or lender executing the real estate lien note at closing showcasing the balance owed
  2. The borrower signing the deed of trust at closing, which gives the lender security interest over the property
  3. The Texas statutory and case law relevant to the particular foreclosure

Texas law matters when the deed of trust does not touch on a topic or goes against specific state laws. Chapter 51 of the Texas Property Code outlines the sale of real estate property under contract lien. For instance, the public auction for the foreclosure sale needs to occur between 10 AM and 2 PM on the first Tuesday of the month.

Section 82.113(g) of the Texas Property Code outlines the regulations around the “right of redemption” for homeowners facing foreclosure. It relates to a lien from the condominium owner’s association. 

Section 209.011(b) of the Texas Property Code discusses the “right of redemption” for the borrower facing foreclosure due to a lien from a property owner’s association. Furthermore, Chapter 34 of the Texas Tax Code governs tax lien foreclosures. 

However, in most foreclosure proceedings, homeowners were late on mortgage payments and faced significant mortgage debt from their lenders. 

Pre-Foreclosure and What This Means

Pre-foreclosure is essentially the very first step of the foreclosure procedure. The pre-foreclosure process allows homeowners to make up their missed payments or potentially file for a financial hardship that will enable them to stay in their homes.

When a homeowner fails to make their monthly payments, pre-foreclosure occurs, and the lender sends a notice of default to the borrower. The notice is a legal document showing that the lender has officially begun the foreclosure on a home.

If a homeowner misses three mortgage payments, they face default of their mortgage. That’s the first part of the foreclosure. However, a homeowner who cannot make their first payment should contact their lender to see if a loan modification is possible or ask for legal advice for any possible solution.  

When lenders are immediately notified of a potential financial situation, they are more likely to assist you with the problem and find ways to cover those monthly payments. Often, a lender can help you set up a mortgage forbearance, a pause in mortgage payments. Then you can create a repayment schedule that works for both parties.

Since the legal fees associated with foreclosure get pricey, lenders are much more likely to help you manage the loan instead of pursuing foreclosure on your home. 

Can I Sell My House Before Foreclosure?

Most lenders will allow you to sell your property through a short sale when you’re facing pre-foreclosure. However, during a short sale, the home buyer pays less than the remaining balance on the mortgage loan. 

As such, the lender will accept less than the money you owe on the loan. Therefore, you will need approval from the lender for the final short sale price. 

You will need to sell your home fast to avoid foreclosure and eviction. As such, you may benefit from seeking a cash home buyer who can provide a fair cash offer in only a few weeks. Banks prefer a short sale because that saves them time and money from going through with a foreclosure.

If you can’t take on the hassle of covering the total amount of the mortgage loan, then selling the house is a good option. You can also sell the home through a regular real estate transaction with the help of a realtor. You can do so if the foreclosure process has not begun, but you have missed one or two mortgage payments.

You should start the process as soon as possible to get a good offer on your home before the bank moves toward foreclosure and sells it during an auction. Many lenders are willing to slow down the foreclosure and eviction process if it means you can sell the house and pay off your mortgage.  

How To Stop a Foreclosure Auction Immediately

There are ways to stop foreclosure auctions immediately. First, you can file a bankruptcy called chapter 13 bankruptcy. When you file for bankruptcy, you can get a stay placed on everything you own, including your home. However, filing bankruptcy can get complex if you have other debt besides a home mortgage.

Another step you can take is to hire a real estate attorney and file a lawsuit against the lender in case the bank has overstepped its legal rights. 

The lender may not have given the required time before pushing for a foreclosure auction. Or the bank may have failed to work with you to find a solution to make up the missed payments. These are all reasons why you may have a legal case against the lender and can file a lawsuit. 

The last way to stop a foreclosure auction immediately may not be feasible unless you win the lottery. You can stop a foreclosure auction quickly if you can pay back your missed payments as well as interest rates and late fees. Doing so will allow the lender to reinstate your loan. 

Most importantly, communicate with your lender every step of the way to ensure you can avoid foreclosure.

foreclosure auction

How To Stop the Foreclosure Auction at the Last Minute

You can try keeping the bank from foreclosing on your home even at the last minute by pursuing any of the following four strategies, which include:

  1. Modifying your mortgage loan
  2. Filing for bankruptcy
  3. Transfer the deed back to the lender via a deed in lieu
  4. Short sale or regular real estate sale

The lender will require you to file a financial package outlining your monetary difficulties to modify your loan. If the lender allows for a modification, the bank will send you the offer of their new loan terms offer.

Filing for bankruptcy should allow you to keep your home since it would force the lender to forgive your unpaid debts. Creditors will also gain some level of repayments by liquidating certain assets.

A deed in lieu allows the homeowner to transfer the house deed back to the lender. However, there could be liability risks for the bank when committing to such a transfer, as a home may have lines of credit set up against it. 

In addition, a deed in lieu may harm your credit, so you will want to ask a credit reporting expert before pursuing the strategy.

Lastly, you can always try selling your home either through a short sale or a regular real estate transaction. However, you may want to consult with a real estate agent and attorney to ensure you follow all state laws during the home sale.

If your home is in the midst of a pre-foreclosure, you should sell the property to cash home buying companies or real estate investors. Most regular buyers are uncomfortable with purchasing a property at risk of foreclosure, which is why finding cash buyers is usually the way to go.


The guide above has answered the question, “can I sell my house before foreclosure?” and provided the critical steps for selling your home ahead of the bank foreclosing on it.

The cost of selling a house at risk of foreclosure often includes closing costs, property taxes, commission fees for realtors, and the costs of any last-minute repairs. Whether you choose a short sale or a regular real estate transaction, you will likely need to seek out house flippers, real estate investors, or cash buyers.

You’ll need to sell a house fast in Texas if you’re at risk of foreclosure. Cash home buyers in San Antonio and other parts of Texas can buy a house quickly and complete the transaction in a few weeks.

We buy houses in Kirby owners are looking to sell in a hurry, so contact us to see how we can help you today!

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