Selling a House in Foreclosure: A Step-by-Step Philadelphia Guide
Understanding Pennsylvania’s judicial foreclosure process and the local resources available within the Philadelphia Court of Common Pleas.
If you own a house in Philadelphia, PA and you are dealing with foreclosure, this page covers what actually happens next — the local timeline, what it costs, and the options that stay open to you. Everything below is specific to Philadelphia and how sales are handled in PA, not generic national advice.
Quick Answer
- Pennsylvania is a judicial foreclosure state requiring a court order before a home can be sold at a Sheriff's Sale.
- The Philadelphia Mortgage Foreclosure Diversion Program may provide homeowners an opportunity to meet with lenders via conciliation conferences.
- A property may be sold privately at any point up until the Sheriff's Sale is finalized to potentially satisfy the outstanding mortgage debt.
Judicial Oversight
Pennsylvania law requires all foreclosures to pass through the court system, offering homeowners multiple stages to present a defense or negotiate a sale.
Local Diversion Resources
The Philadelphia Court of Common Pleas offers a specific program to delay the sale process while homeowners seek housing counseling or a private buyer.
Equity Preservation
A private sale in Philadelphia may allow homeowners to capture remaining equity that would otherwise be lost during a public Sheriff's Sale auction.
The Detailed Answer
Pennsylvania Pre-Foreclosure Laws and Initial Notices
In Pennsylvania, the foreclosure process typically begins after a homeowner misses multiple mortgage payments. Under PA statutes Act 6 and Act 91, lenders are generally required to send specific notices before initiating legal action in Philadelphia County. An Act 91 notice informs the homeowner about the Homeowners’ Emergency Mortgage Assistance Program (HEMAP), which may offer financial aid to those facing temporary hardship. Homeowners usually have 30 days from the date of these notices to seek credit counseling or cure the default. Failure to respond to these notices may lead the lender to file a formal complaint in the Philadelphia Court of Common Pleas. Because Pennsylvania is a judicial foreclosure state, the lender must prove their case in court rather than proceeding with an automatic sale. Navigating this initial 30-to-60-day window is critical for homeowners in neighborhoods like Kensington or West Philadelphia who wish to explore selling the property on the open market before litigation significantly increases the total debt through legal fees and interest.
The Philadelphia Mortgage Foreclosure Diversion Program
Philadelphia is unique in Pennsylvania due to its mandatory Mortgage Foreclosure Diversion Program, established by the First Judicial District. When a foreclosure complaint is filed against an owner-occupied residential property in Philadelphia, the court automatically schedules a conciliation conference. This program aims to bring homeowners and lenders together to discuss alternatives to foreclosure, such as loan modifications, deeds-in-lieu, or a structured sale of the home. Homeowners are encouraged to contact the Save Your Home Philly Hotline at 215-334-4663 to be paired with a housing counselor. These conferences often result in a temporary stay of the legal proceedings, providing the homeowner more time to list the property with a real estate agent or find a cash buyer. In many cases, reaching a settlement through this diversion program can prevent a judgment from being entered, which is a vital step for preserving the homeowner's credit and maximizing the equity they might walk away with after a successful sale.
The Path to the Philadelphia Sheriff’s Sale
If the diversion process does not yield a resolution, the lender may move for a default judgment or summary judgment. Once the Court of Common Pleas grants this judgment, the lender can obtain a Writ of Execution, which directs the Office of the Sheriff of Philadelphia to sell the property. In Philadelphia, Sheriff’s Sales for mortgage foreclosures traditionally occur on the first Friday of every month. The Sheriff must provide public notice of the sale for at least 21 days by posting a handbill on the property and advertising in local newspapers like The Philadelphia Inquirer. For homeowners in areas like South Philly or the Northeast, this period represents the final opportunity to sell the home privately. Selling the house before the gavel falls may allow the owner to pay off the judgment in full and avoid the long-term credit impact of a completed foreclosure. It is important to note that once the Sheriff's Sale is finalized and the deed is transferred, the prior owner typically loses all legal rights to the property.
Legal and Financial Considerations for a Private Sale
Selling a Philadelphia home that is already in the foreclosure pipeline requires careful coordination between the seller, the buyer, and the lender’s legal counsel. The sale price must be sufficient to cover the total 'payoff amount,' which includes the principal balance, accrued interest, late fees, and the lender’s attorney costs. In Pennsylvania, if the sale price is lower than the debt, a 'short sale' approval from the lender is required, which can take several months to negotiate. Homeowners should also be aware of the Pennsylvania Realty Transfer Tax, which is typically 2% of the sale price in Philadelphia (split between buyer and seller). Additionally, any outstanding municipal liens, such as unpaid Philadelphia Water Department bills or PGW liens, must be satisfied at closing. Consulting with a Pennsylvania-licensed real estate attorney is highly recommended to ensure that all court filings are addressed and that the foreclosure action is properly discontinued upon the successful closing of the private sale.
Key Data Points
Visual Data
Philadelphia Foreclosure Process Timeline (Typical Months)
Side-by-Side Comparison
| Feature | Feature | Traditional Sale | Cash Sale During Foreclosure |
|---|---|---|---|
| Timeline | 60-90+ days | 7-21 days | |
| Contingencies | Inspection/Financing | Typically none | |
| Court Approval | Lender notification req. | Lender notification req. | |
| Repairs Needed | Yes, for FHA/VA | Sold as-is | |
| Commission Fees | 5-6% | $0 | |
| Stops Sheriff Sale | If closed in time | If closed in time |
Cost Breakdown
Estimated Costs of Selling in Philadelphia Foreclosure
Source: Philadelphia Department of Records
The Process
Receive Act 6/91 Notices
Review the mandatory PA notices which grant you 30 days to cure the default or seek state-funded HEMAP assistance. Do not ignore these, as they are the first legal trigger for foreclosure in Philadelphia.
Enroll in the Diversion Program
Attend the court-mandated conciliation conference at the Philadelphia Court of Common Pleas. This step may pause the litigation and allows you to present a plan for selling the home privately.
Market the Property
List your home or seek a cash buyer immediately to ensure the sale closes before a judgment is entered. Ensure the offer covers the full payoff amount including Philadelphia-specific transfer taxes and liens.
Obtain a Payoff Statement
Request an official payoff figure from your lender’s attorney, which includes all interest and legal costs. This document is required by the title company to clear the mortgage lien during the Philadelphia closing process.
Close and Dismiss Action
Finalize the sale and ensure your attorney files a 'Praecipe to Satisfy Judgment' or 'Order to Settle, Discontinue, and End' with the Philadelphia Prothonotary. This officially closes the court case and protects your record.
Local Context — Philadelphia
Philadelphia's foreclosure landscape is governed by the First Judicial District of Pennsylvania, which operates out of City Hall and the Juanita Kidd Stout Center for Criminal Justice. Homeowners in neighborhoods like Brewerytown or Fishtown face a judicial process that is significantly slower than non-judicial states, often taking 9 to 12 months from start to finish. Local non-profits like Community Legal Services (CLS) provide vital representation for low-income residents facing the Sheriff's Sale list.
Frequently Asked Questions
Sources & Citations
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Disclaimer: The information on this page is provided for general informational purposes only and does not constitute legal, financial, or tax advice. Laws, timelines, and market conditions vary by state and change over time. Always consult a licensed attorney, financial advisor, or tax professional about your specific situation before making any decisions. Any cash offer is subject to a property evaluation, and closing timelines depend on title, occupancy, and other factors. Results described on this site are not a guarantee of any particular outcome. Black Girls Buy Houses LLC is a real estate investment company that purchases properties directly; we are not licensed real estate agents or brokers and do not provide brokerage services. We are committed to the letter and spirit of the Fair Housing Act and conduct business in accordance with all federal, state, and local fair housing laws.
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