8 Ways to Avoid Foreclosure: For Sale By Owner

Selling your house “For Sale by Owner” is a method to avoid foreclosure.

The idea is to sell the house before the foreclosure date and pay off the mortgage balance therefore stopping the foreclosure. This could be a good strategy for someone who already understands the real estate market along with the title and escrow process. This could get the house out on the market to have multiple offers.

The downside is, if the homeowner does not understand the real estate market and how to value a house, they could sell the house too low, and not get all of the equity out. Also, the homeowner could list the house too high and not have the property sell before the auction date.

If the house is unable to sell, the property will still go to foreclosure auction and be recorded as a foreclosure on the owner’s credit report. This method is also very difficult for people who do not understand the title and escrow process. If a homeowner sells to a traditional buyer, the closing can take 30 to 45 days and is contingent upon the buyer’s financing. A homeowner facing foreclosure could get an offer and not know until weeks into the process that their buyer will not be able to close.