Sell Before the Bank Does: What to Do If Foreclosure Is Looming in Victoria

/

If you're behind on your mortgage and the bank has started sending threatening letters, you're not alone — and you're not powerless. Every year, hundreds of Victorians wait too long and lose tens of thousands in equity because they didn’t act early enough. As David Dawn, Licensed Conveyancer at Victorian Property Settlements, puts it: “When you know you’re in trouble, selling on your terms is always better than waiting for the bank to do it on theirs.”

1. Understand What’s Coming: This Isn’t Just a Scare Letter

When your bank issues a default notice, you’ve entered the danger zone. You usually have 30 days to pay the arrears or they can begin foreclosure proceedings — which means:

  • Court action for possession

  • A mortgagee-in-possession sale (often below market value)

  • Your credit file marked for years

  • Costs and legal fees taken from your equity

By the time your home is listed by the bank, it’s no longer about protecting your future — it’s about damage control.

2. Why Selling Before Foreclosure Is Almost Always Better

When the bank sells your home:

  • You lose control over timing, price, and presentation

  • Fire-sale conditions may slash the final price

  • Your equity can evaporate after fees and interest stack up

  • The legal fees and marketing costs get added to your debt

But if you sell first, you can:

  • Choose your agent

  • Set a realistic sale price

  • Negotiate timeframes

  • Pay out the debt in full

  • Keep what’s left — with dignity

3. How Much Time Do You Really Have?

Not much. Once legal proceedings start, you could be looking at:

  • 14–30 days before court orders are sought

  • 60–90 days before the property is forcibly sold

  • A lifetime of credit damage if the shortfall is pursued

We’ve seen clients come to us just days before auction. By then, it’s often too late.

4. What to Do Right Now

If you're facing default or hardship:

🔹 Get the property valued or appraised
🔹 Call a conveyancer — not later, now
🔹 List the property for sale with a fast turnaround
🔹 Tell your bank you're selling — they will often give you time
🔹 Avoid expensive bridging loans or refinancing traps

You don’t need to move out right away. Selling now gives you time to plan, pay off the loan, and start over without a sheriff at the door.

5. We Can Help You Take Control

At Victorian Property Settlements, we’ve helped many clients navigate this exact situation. We’ll:

  • Work with your real estate agent to move fast

  • Notify your lender and manage the process

  • Make sure settlement discharges the loan properly

  • Protect your remaining equity

  • Keep the transaction legally sound and on track

🤝 Final Word

If you're under mortgage stress, the worst thing you can do is wait. Selling now could be the difference between walking away with money in your account — or owing thousands after your house is sold by the bank.

📞 Call us today on 03 9783 0111 for confidential advice, or visit
🔗 www.victorianpropertysettlements.com.au