WHEN IS THE BEST TIME TO DO A SHORT SALE?

The most commonly identifiable time to do a short sale is when the property is in what is called a “Pre-foreclosure” status. This means the property is not yet been foreclosed upon and the bank is working with the attorneys and the homeowner to come to some resolve to get the property back in a “performing” status.

There are two stages of Pre-foreclosure

1. Behind on Payments Only: This stage the homeowner is behind on payments, but the bank hasn’t hired and attorney and filed a LisPendens or foreclosure suit to start the process for foreclosure.

2. Behind on Payments with Notice of Default (N.O.D.) Filed: This is the stage where the bank is more motivated to consider a short sale because the only other option is taking the property through the auction for foreclosure. At this stage the homeowner has usually missed 3 or more mortgage payments.

If you want to get more short sales completed faster, you will want to target homeowners that are in the second stage of Pre-foreclosure. This also means the homeowner has missed more than 3 mortgage payments. One the Notice of Default (N.O.D.) has been filed and recorded, banks will get much more motivated to liquidate the property. This where you can get heavily discounted properties because every day the bank is losing money against the property.

You can get banks to do what is referred as “forced mitigation” where some rare cases, bank will push through a short sale request because it is determined the homeowner can no longer make payments and their hardship situation is on-going. An example of this would be a military relocation situation where the homeowner is transferred to another country for a few years and can no longer afford to make the mortgage payments.