After a homeowner misses 3–6 mortgage payments, the lender files a Notice of Default or lis pendens — a public record that the property is in default. This begins a redemption period of 90 days to 12 months depending on state, during which the owner can cure the default or sell the property. After this period, the property goes to foreclosure auction. The sweet spot for investors is the 60–90 days after NOD filing and before the auction date.
NOD filings are public records available from the county courthouse or clerk of court. Services like PropStream, ATTOM, and REDX aggregate these filings and make them searchable. Filter for recent filings (last 30–60 days) in your target zip codes, then skip trace owner contact information and reach out immediately — the window is short.
Pre-foreclosure sellers are in a difficult situation — approach with empathy, not a sales pitch. Acknowledge you understand the situation is stressful. Present your purchase as one of several options they have, not the only one. Be transparent about what you do: you buy at below market value in exchange for speed, cash, and no repairs. Do not pressure — sellers who feel pressured will call an attorney or housing counselor instead of accepting your offer.
When a property is worth less than the mortgage balance, a short sale may be needed. The lender must approve the below-payoff purchase price. Short sales take 60–180 days to close and require substantial paperwork. They are not a quick-flip strategy — but they can produce deals in high-equity-loss markets. Partner with a short sale-experienced agent if you pursue this path.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in Northern Virginia real estate for 20+ years.