A short sale is beneficial for a homeowner that owes more on their home that it is worth. The homeowner can sell their property  before a foreclosure takes place if they are 2 months late on their . The listing price is determined by broker price opinions, recent comps in the area and the condition of the home, and ultimately, in a short sale, the lender agrees to accept less payment than what is actually owed to them.By definition, any homeowner that is two months late on their mortgage payment and can also demonstrate the inability to pay their mortgage would be considered a short sale candidate. The homeowner is considered pre-foreclosure when the bank officially sends a notice of default or a notice that they're taking legal action against the homeowner to collect the debt.  A short sale can still take place once the foreclosure process begins.