Introduction

If you're a homeowner under financial stress, you might be wondering if a short sale is your best option — and more importantly, when to start the process. A short sale allows you to sell your home for less than what you owe on the mortgage, with your lender's permission, but the timing of your decision plays a crucial role in how smooth and successful that process is.

In this guide, we’ll break down the ideal windows of opportunity for starting a short sale and help you decide if now is the right time for you.

1. When You're Struggling to Keep Up with Mortgage Payments

One of the clearest signs it may be time to consider a short sale is if your monthly payments are becoming unsustainable. Whether due to job loss, reduced income, or rising expenses, if you're constantly behind or dipping into savings, you're at risk of default. Acting early — before you're too far behind — may give you more flexibility in negotiations and help preserve your credit standing.

Learn more about how short sales impact your credit here. 

2. When Your Home's Value Has Dropped Below What You Owe

If your home is underwater — meaning it’s worth less than your remaining mortgage — selling through traditional methods may not be an option. A short sale allows you to avoid foreclosure and walk away with less long-term damage to your financial future. Keep in mind that lenders need to see a legitimate hardship, not just a desire to offload a bad investment.

3. When You've Experienced a Major Life Change

Life events like divorce, illness, death of a spouse, or sudden relocation (especially job-related) can put you in a tough financial position. These situations often count as valid hardships for a short sale, and many lenders are more willing to cooperate when these factors are involved.

4. When Foreclosure Is Looming — But Not Final

Many homeowners wait until foreclosure proceedings are already underway before considering a short sale. While it’s still possible at that point, your options may be more limited. Starting the process earlier — ideally when you receive your first notice of default — gives you a better shot at negotiating favorable terms with your lender and avoiding the most severe credit consequences.

Compare your options on our short sale vs foreclosure guide.

5. When You’ve Explored Other Options First

A short sale isn’t always the first step — and it shouldn’t be. Options like loan modification or forbearance might provide relief without selling your home. However, if those have been denied or aren't viable, a short sale can be the most responsible path forward.

For government assistance and programs, visit https://www.consumerfinance.gov/ask-cfpb/what-is-a-short-sale-en-289/

What to Do Next

If you think a short sale might be right for your situation, don’t wait too long. A timely start gives you more control and a higher chance of approval. At Short Sale Cooperative, we’ve helped thousands of homeowners navigate this process from start to finish — with no pressure and zero upfront fees.

Start by reviewing the stages of a short sale so you know what to expect.