Yes, that is exactly my understanding now. Sanctification will always result in works that are good in the eyes of God. Such works are impossible for the lost. Therefore, sanctification cannot happen with the lost, only the saved.
In the process of redemption works are a secondary feature. They reveal the changed believer, they do not save the believer. It is only by Grace thru Faith that we are saved. I think any Christian Sect that demands works from believers is attempting to take on the role of the HOLY SPIRIT, or does not have enough FAITH in GOD to believe that the regenerate believer will change.
Justification by Faith Alone is not only theologically sound, but serves as a great tool to measure how much confidence any Christian sect has in the power of God Alone.