The Rise of Foreclosures: How Homeowners Can Sell Successfully Before Losing Their Property

Foreclosure Is a Process, Not an Overnight Event

Foreclosure activity has risen from the unusually low levels seen during and immediately after the pandemic. ATTOM reported 40,277 U.S. properties with foreclosure filings in August 2026, up 13% from August 2025. Completed foreclosures were also higher than a year earlier. At the same time, ATTOM noted that overall activity remained below historical pre-pandemic levels.

For an individual homeowner already behind on payments, however, national statistics matter less than the specific property, equity position, mortgage status, and foreclosure timeline.

Why Homeowners Fall Behind

Financial hardship can happen for many reasons: job loss, divorce, unexpected expenses, business problems, changes in household income, or rising costs. A homeowner can have substantial equity and still struggle with the monthly payment.

That distinction matters. Home equity and monthly affordability are two separate issues.

The Earlier You Act, the More Options You May Have

One of the most common mistakes is waiting because the homeowner hopes the problem will resolve itself. Sometimes circumstances do improve, but if missed payments continue and the foreclosure process advances, options can become more limited.

If selling is being considered, starting early gives the owner more time to determine market value, obtain a mortgage payoff, identify other liens, prepare the property, market it, evaluate offers, and close before a critical deadline.

Can a Homeowner Sell During Foreclosure?

In many circumstances, a homeowner can sell a property before foreclosure is completed. The critical issue is timing and the legal status of the property.

A traditional sale may be possible when there is enough time to market the property, accept an offer, complete due diligence, and close before the foreclosure process reaches a point that prevents the owner from completing the transaction.

Because foreclosure laws and timelines vary by state, homeowners should not rely on general internet advice. A local real estate professional and appropriate legal or housing professional can help explain the situation.

Determine What the Property Is Worth

The first practical question is: what could the home realistically sell for today?

That means looking at recent comparable sales, current competition, property condition, location, buyer demand, and the likely marketing timeline. The homeowner should also determine the approximate mortgage payoff and identify other liens or obligations.

For illustration, imagine a property worth $325,000 with a $245,000 mortgage payoff and $25,000 in other liens and selling costs. The homeowner could potentially have approximately $55,000 remaining after those obligations. Actual results depend on the specific transaction.

Should You Make Major Repairs?

When someone is already experiencing financial distress, spending tens of thousands of dollars renovating a property may not be practical.

Focus instead on cleanliness, safety, basic curb appeal, obvious inexpensive repairs, and keeping essential systems operating when possible. The objective is not perfection. It is making the property marketable without creating another financial burden.

What About Selling to a Cash Buyer?

A direct cash buyer or investor can sometimes offer a faster closing and may purchase properties that need substantial repairs. That can be useful when the owner's timeline is tight.

But speed comes with a tradeoff. A cash offer may be below the price the property could achieve through a traditional listing.

Homeowners should compare the actual economics of each option: purchase price, closing costs, repairs, commissions if applicable, timeline, contingencies, and certainty of closing.

Watch for Foreclosure-Related Scams

Financial distress can attract legitimate professionals as well as people making unrealistic promises. Be cautious about anyone who guarantees that foreclosure can be stopped, demands large upfront fees, tells you to stop communicating with your lender, pressures you to transfer ownership, or promises a specific amount without properly evaluating the property.

A Successful Sale Starts With a Realistic Plan

If selling is appropriate, the goal is to create a realistic plan that gets the property sold before the homeowner loses control of the transaction. That begins with understanding the numbers, then pricing, marketing, evaluating offers, and managing the closing process.

Don't Wait for the Final Notice

Receiving a foreclosure notice does not automatically mean every option has disappeared. For homeowners with sufficient equity, selling before foreclosure is completed may provide a way to satisfy the mortgage and move forward.

The earlier you understand your options, the more opportunity you generally have to make a deliberate decision instead of being forced into one by the clock.