Can't Pay Your Mortgage? 3 Ways to Sell Before Foreclosure in Florida
If you can't pay your mortgage, you have more options than you might think. You just have less time than you'd like. If you own a home in Jupiter, Palm Beach County, or anywhere in Florida and your payment has become unaffordable, selling before foreclosure is usually the way to protect your equity and your credit.
This isn't a fun topic, but it's an important one. Below I walk through the three real ways to sell when you're behind on your mortgage: a local wholesaler, an institutional cash buyer, or a traditional sale on the open market. I'm assuming you have equity in your home, which most Florida owners who bought more than a few years ago do.
What matters most: certainty to close
Before comparing options, here's the one thing I want every homeowner in this spot to understand. When you can't pay your mortgage, what you need more than anything is certainty to close. The buyer you sign with has to have a very high likelihood of actually getting to the closing table.
How much time you have depends on where you are in the foreclosure process:
About to miss your first payment. You have the most time and the most options.
Already several months behind. Your window is shrinking, and speed starts to matter more than price.
A lis pendens has been filed. The lender has started the foreclosure lawsuit, and the clock is running.
A foreclosure sale date is posted. You need a buyer who can close fast, with almost no risk of falling through.
Know which stage you're in before you choose a path. The right option for someone who hasn't missed a payment can be the wrong one for someone with a sale date on the calendar.
Option 1: Selling to a local wholesaler
In my experience, this is the option least likely to make it to closing. That's a serious problem when time isn't on your side.
A wholesaler may offer you, say, $300,000. Look closely at the contract and you'll often find an assignment clause, a very small deposit, and language that lets them bring other people through the house. You may also find very little information about the buyer.
Here's why. Many wholesalers never plan to buy your home. They put it under contract and then look for a second buyer at a higher price, maybe $330,000. On closing day they assign the contract to that buyer and keep the $30,000 difference. If they can't find that second buyer, the deal can fall apart, and you've lost weeks you didn't have.
If you talk to a wholesaler, ask directly: Why is this contract assignable? Are you closing on this property yourself, or are you planning to assign it? Get a clear answer before you sign.
Option 2: Selling to an institutional cash buyer
Institutional, or corporate, buyers are well-funded companies that buy homes nationwide. They buy below market value, and they do it at scale. You can research who they are, and they have the money to close. It's a growing part of the market, and I've done a number of these deals.
They typically offer two kinds of deals:
Straight cash offers. These come in below market, but with real certainty to close, sometimes in as little as 21 days.
Renovation partnership offers. If your home needs work, such as an old roof or a dated kitchen, the company gives you some money now to get you out of trouble with the mortgage. You can receive more later if the home sells for more after it's renovated. It's not the cleanest structure, but it works for some people.
Here's how it works when I handle it. I come out, take photos and video, and submit the property. The company comes back with a fairly tight value range, does a quick inspection, and closes a couple of weeks later.
For homeowners who are behind on payments, this is often a strong middle ground. You give up some equity for speed and certainty, which beats letting the home go all the way through foreclosure. It can also work well if you've inherited a home you need to sell quickly.
Option 3: Listing your home on the open market
Listing on the MLS will net you the most money. There's really no debate about that. Exposing your home to the largest pool of buyers produces the highest price.
The catch is that you have to be realistic. When you're on a deadline, price the home to sell, and favor strong offers over the highest number. Ideally that means a cash buyer, a short inspection period, and a quick close. You can't afford to gamble on a shaky buyer whose financing might fall through.
Which option fits your timeline?
In every case, the worst outcome is doing nothing and letting the home go through foreclosure.
I went through the housing crash myself, and I made mistakes I now help people avoid. If you're behind on your mortgage, or about to be, and you're in Florida within about two hours of Jupiter, I'll come to you and walk through every option.
This article is general information, not legal or financial advice. If you're facing foreclosure, consider also speaking with a real estate attorney or a HUD-approved housing counselor.
Frequently asked questions
What should I do if I can't pay my mortgage in Florida?
First, figure out where you are in the foreclosure process: about to miss a payment, months behind, a lis pendens filed, or a sale date set. If you have equity, selling before foreclosure is usually the best way to protect it. Your three main options are a traditional MLS listing, an institutional cash buyer, or a local wholesaler.
Can I sell my house if I'm behind on mortgage payments?
Yes. You can sell your home while behind on payments, and even after a lis pendens has been filed, as long as the sale closes before the foreclosure sale. The mortgage is paid off at closing from the sale proceeds.
What is a lis pendens in a Florida foreclosure?
A lis pendens is a public notice filed when a lender starts a foreclosure lawsuit. It signals that the property is subject to pending legal action. It doesn't mean you've lost the home, but it does mean your timeline is shrinking.
How fast can an institutional cash buyer close?
Many institutional buyers can close in about 21 days, sometimes faster. The process usually involves photos and video of the property, a value range, a quick inspection, and closing a few weeks later.
Why do wholesaler contracts include an assignment clause?
An assignment clause lets the wholesaler transfer your contract to another buyer, usually at a higher price, and keep the difference. That's why these deals fall through more often. Always ask whether the buyer intends to close themselves.
Which option gets me the most money for my house?
Listing on the open market almost always nets the most money. It works best if you're early in the process and have time to sell. If you're several months behind, speed and certainty usually matter more than top dollar.
About the author
Casey Prindle has been a licensed Florida Realtor since 2009, specializing in Jupiter, Jupiter Farms, and Palm Beach County residential real estate. With a background in banking and finance, Casey takes a data-driven, straightforward approach to helping buyers and sellers, including homeowners navigating difficult situations like missed mortgage payments and inherited properties. Have questions about your options?
