Pre-Foreclosure Short Sale

What is a pre-foreclosure short sale?

A pre-foreclosure short sale is a real estate short sale, a bank short sale or a mortgage short sale done when the homeowner is not yet in foreclosure. Usually a short sale is done on a home that is already in foreclosure. This is simply because most homeowners are in denial until the house is in foreclosure and then they finally have a moment of truth.

Can a pre-foreclosure short sale be done?

Of course! A pre-foreclosure short sale is as good of a short sale as any. A homeowner does not need to wait until he or she is in foreclosure to start a short sale process. Sometimes, a pre-foreclosure short sale will work even better than a short sale after a notice of default is filed or trustee sales date set.

How many payments do I need to be delinquent before I can do a short sale?

The good news is there is no specific rule of the number of payments a homeowner has to miss before he or she can start a bank short sale process. In some cases, a homeowner does not need to have delinquent payments at all. It is up to his or her mortgage company, of course, whether they will accept a short sale early on.

What to do if you know you won't be able to make future payments

If you know that you won't be able to make future mortgage payments and you think a pre-foreclosure short sale may be your home solution, get with a short sale expert and get him or her to call the bank on your behalf. You want the real estate investor or potential buyer to let the bank know that you will not be making any more payments. At this point, the real estate investor or short sale expert will open a short sale negotiation for your home. This pre-foreclosure short sale negotiation can be done before your mortgage payment is late.

Benefits of a pre-foreclosure short sale

If a pre-foreclosure short sale can be done, it is usually best do it rather than wait for the notice of default of the foreclosure notice from the mortgage lending company. A pre-foreclosure short sale will save the homeowner from having to go through some of the foreclosure process and have a dent in their credit report. A pre-foreclosure short sale can also save the bank much money because the bank will not have to spend time and money initiating the foreclosure process.