Selling Your Home Before Foreclosure in Los Angeles: What AB 2424 Means for You

Can you still sell your Los Angeles home after receiving a Notice of Default?

Yes. California's AB 2424, effective January 1, 2025, gives homeowners facing a scheduled trustee's sale the right to request a 60-day postponement by delivering a signed listing agreement to the foreclosing trustee at least 5 business days before the auction date. The listing must be active on the MLS at a price of 67% or more of the property's fair market value. If a buyer opens escrow before the rescheduled sale date, you can get up to 45 additional days to close.

By Paul Blair | October 3, 2026

You missed some payments. Then you got a certified letter. Now there's a Notice of Default recorded against your property, and your phone doesn't stop ringing with callers who want to buy your house for fifty cents on the dollar.

Here is what most of those callers won't tell you: you almost certainly have more time and more options than you think.

California's non-judicial foreclosure process has a specific sequence, and each stage has legal protections attached to it. AB 2424, which took effect January 1, 2025, added a meaningful one that most homeowners don't know about until someone tells them.

The California Foreclosure Timeline

California doesn't require a court order to foreclose on a property. The lender works through a trustee, and the process is faster than most people assume.

Here's the sequence:

1. Missed payments. Your lender can begin foreclosure proceedings after a certain number of missed payments, typically three or more. Many lenders will attempt outreach before filing anything.
2. Notice of Default. The trustee records a Notice of Default (NOD) with the county recorder. This is public record. From this point, you have 90 days to cure the default by paying everything owed, including back payments, late fees, and trustee costs.
3. Notice of Trustee's Sale. If you don't cure during the 90-day period, the trustee records a Notice of Trustee's Sale (NTS). California law requires a minimum of 20 days between recording the NTS and holding the auction.
4. The trustee's sale. The property goes to auction. If no third party bids above the opening price, the lender takes title and the foreclosure is complete.

From first recording to auction, the minimum timeline is around 4 months. Real-world foreclosures usually run longer because of servicer delays, loss mitigation review, and administrative backlogs. You very likely have more runway than the paperwork suggests.

What AB 2424 Actually Does

Before January 1, 2025, once a Notice of Trustee's Sale was recorded and the 20-day window was running, your practical options were narrow: pay off the debt in full, file for bankruptcy to trigger an automatic stay, or watch the sale proceed.

AB 2424 created a fourth path: list the property on the MLS and request a postponement.

Under the law, if you own a 1-to-4 unit residential property, you have the right to request that the trustee postpone a scheduled trustee's sale for 60 days. To trigger this right, you deliver to the foreclosing trustee a signed listing agreement showing that the property is listed with a licensed real estate agent on the MLS at a price of at least 67% of the property's fair market value. You must deliver this at least 5 business days before the scheduled auction.

Once you deliver the listing agreement, the trustee must postpone. This is not a request the trustee can decline based on judgment or discretion. It's a legal right.

And if, during that 60-day period, a buyer enters into a purchase agreement and opens escrow, the trustee must grant an additional postponement, up to 45 more days, to allow the sale to close.

That's up to 105 days from the moment you engage an agent. In most Los Angeles transactions, 30 to 45 days to close is standard. You have room to work, provided you price the property to sell and get moving quickly.

A couple of things worth noting: AB 2424 applies to the trustee's sale specifically, not to the entire foreclosure process. And the 5-business-day delivery deadline is real. If the Notice of Trustee's Sale is dated for next Tuesday, today may already be too late. Every day you wait after the NTS is recorded costs you options.

If you've received a Notice of Default or a Notice of Trustee's Sale and you want to understand what your home is worth in today's market before you decide anything, get a quick home value estimate at greysq.com/home-value. There's no pressure and no commitment. Just numbers.

What You Actually Net Compared to the Auction

The argument for listing before the auction isn't just about avoiding the stigma of foreclosure. It's about money.

Auction buyers are compensating themselves for significant risk. They typically can't inspect the property before bidding. They take it with all liens, code violations, and title issues in place. They pay cash on the spot with no financing contingency. All of that risk has a price, and that price comes off your proceeds.

Trustee's sale prices on residential property in Los Angeles regularly come in 20 to 30 percent below what the same home would sell for on the open market with preparation, marketing, and time. On a home with a market value of $1.2 million, that's $240,000 to $360,000 that doesn't end up applied to your debt or in your pocket.

A market sale through CRMLS (the California Regional MLS that serves Los Angeles and most of Southern California) gives buyers financing options, time to inspect, and the ability to compete. That competition tends to produce prices closer to actual market value.

The 67% minimum list price that AB 2424 requires is a floor for qualifying for the postponement, not a ceiling on what you can accept. You price to the market. You let buyers compete. You close.

If the property's market value exceeds what you owe, you might walk away with equity you'd otherwise lose entirely at auction. If the value is less than what you owe, a short sale in Los Angeles may be the more appropriate path, since a short sale requires lender approval of a price below the loan balance. Your agent will help you work through which scenario applies to your situation.

For context on what you might owe on any judgment or deficiency after a non-judicial foreclosure completes, California's non-recourse mortgage protections limits personal liability in many cases, but the specifics depend on your loan type. That's a conversation worth having with a real estate attorney.

What to Do If You're in This Situation Now

If a Notice of Default has been recorded:

1. Request your payoff statement. Call your lender or servicer and ask for a complete payoff statement that includes the amount to bring the loan current and the full payoff amount. You need both numbers.
2. Get a real market analysis. Not a Zestimate, not a neighbor's opinion. A proper comparable sales analysis based on what's actually closed in your neighborhood in the past 60 to 90 days. This tells you whether a sale generates enough to clear the debt and what you'd realistically net.
3. Talk to your lender about loss mitigation. If your income disruption is temporary, many servicers offer loan modifications, forbearance arrangements, or repayment plans. These don't require you to sell, and they can stop the foreclosure clock while a workout is being reviewed.
4. Contact an agent before the Notice of Trustee's Sale is recorded. The more time you have, the more options you have. Waiting until you see the NTS puts you on a very tight clock. The AB 2424 postponement still applies after the NTS, but the 5-business-day requirement means you're working against a fixed deadline.
5. If the NTS is already recorded, move immediately. Get the listing agreement signed and delivered to the trustee with time to spare. Five business days is not five calendar days, and weekends and holidays don't count.

One more thing to check: your preliminary title report will show the NOD, any other liens, and the chain of title. Knowing what's attached to the property before you list is essential for pricing accurately and avoiding surprises at escrow.

Frequently Asked Questions

Does AB 2424 apply to all California residential properties in foreclosure?

AB 2424 applies to non-judicial foreclosures on 1-to-4 unit residential properties. California is predominantly a non-judicial foreclosure state for residential properties, so the law covers most homeowners in this situation. Commercial properties and judicial foreclosures fall outside its scope.

What if the 60-day postponement expires and I still don't have a buyer in escrow?

If the postponement runs out without a bona fide purchase agreement going into escrow, the trustee can schedule and proceed with the auction. This is why pricing correctly from day one matters so much. An aspirational price that sits without offers will exhaust the window without a result.

Can my lender oppose the AB 2424 postponement?

The postponement is a statutory right. As long as you deliver a qualifying listing agreement to the trustee at least 5 business days before the scheduled sale, the trustee must postpone. The lender and trustee don't have discretion to refuse. That said, "qualifying" has specific requirements: the listing must be active on the MLS, signed by a licensed agent, and priced at or above the 67% threshold.

What's the difference between an AB 2424 postponement and a short sale in Los Angeles?

An AB 2424 postponement gives you time to list and sell at market, and if the sale proceeds cover your full loan payoff, no lender approval is needed. A short sale is a transaction where the lender agrees to accept less than the full balance owed. If your home is underwater, a short sale requires lender cooperation before you can close. The two aren't mutually exclusive: you can list under AB 2424 and pursue short sale approval simultaneously if your market analysis suggests the value won't cover the debt.

Does Measure ULA apply to a pre-foreclosure sale in Los Angeles?

Yes. If the property is within the City of Los Angeles and the sale price is above the applicable Measure ULA threshold (currently $5,400,000 for the 4% tier, $10,900,000 for the 5.5% tier, indexed annually), the ULA transfer tax applies to gross proceeds regardless of the seller's circumstances. Most pre-foreclosure sales in Los Angeles fall well below these thresholds, but if your property is a multi-unit building or a higher-value home in the city limits, confirm the calculation with your escrow company.

A Notice of Default is not a foregone conclusion. The California foreclosure process has built-in time, and AB 2424 added a specific legal right designed to give homeowners a real chance to sell before the auction takes place.

If you want to understand what your home is worth right now and what a sale would actually look like before you make any decisions, I'm glad to run a market analysis for your address. No pressure, no pitch, just real numbers.

Get a home value estimate at greysq.com/home-value or reach out at greysq.com/contact.

About Paul Blair

Paul Blair is the founder and broker of Grey Square, a virtual real estate brokerage representing buyers and sellers across Dallas and Los Angeles. With 22 years in the business and more than $200 million in closed transactions, Paul works the full range of the market, from luxury homes in the Park Cities and Preston Hollow to estates in the Hollywood Hills and across the Westside. Connect with Paul and the Grey Square team at greysq.com. TX TREC #9011505 · CA DRE #01792671.