Keller Williams Real Estate

Los Angeles & Surrounding Areas Short Sales: An Overview

If you can’t afford your mortgage payment any longer and you know a loan modification will not serve you for the long term; then it is time to look for a permanent solution for your under water property.

A short sale is simple selling your Home at a price that is less than what is owed against it. You’re selling the home “short” of what you owe. Sounds pretty easy, yes? In reality for the sellers, the process is not difficult, but will require patience.

In many cases you can get an approval in 30-60 days, but there are no set guidelines and every short sale is unique. Sellers must understand this and as long as the process keeps constantly moving forward, stick with it and you’ll give yourself the best chance to get your short sale approved.

For real estate agents, a short sale is a complex transaction that demands expertise and diligent follow up systems; connections with lending institutions are invaluable.

The process stops becoming intimidating when you can easily understand how it works. We want to take away the mystery, so you can make an informed decision.

So many sellers, who already felt they have lost a sense of power with their home, feel even more unsettled because of a lack of information on short sale and a poor job of communication by their agents.

Why Do a Short Sale vs. a Foreclosure?

The whole point of a short sale is to allow a troubled homeowner the opportunity to sell their home in a market where their home is upside down.

A short sale offers numerous advantages over a foreclosure. With a foreclosure you are simply abandoning your debt. Future creditors will look at a foreclosure more negatively than a short sale. Sometimes borrowers who let their properties foreclose are then forced into bankruptcy to protect themselves from future liability of the debt.

A short sale in many instances, settles the debt and eliminates any future recovery of the debt as long as the short sale approval comes with a complete lien release and satisfaction.

Keller Williams Real Estate Believes Short Sales maybe one of the Keys to the Real Estate Recovery

Back in late 2008 we took stock of the market and came to the conclusion that homes were going to have to be liquidated through a means other than foreclosure. Foreclosures are the most destructive means to clear a property in default. Some reasons why short sales are preferred over a foreclosure:

• Banks recover less on foreclosed homes than those successfully modified or sold as a short sale.
• Neighborhoods suffer with abandoned homes and the devastating effects foreclosures have on pricing.
• Buyers could benefit by purchasing a home earlier and often in better condition vs  not getting the opportunity to buy it until only after it has been foreclosed.

The market three years ago was in a free fall. Even so, it became apparent that once the initial foreclosure wave passed, short sales would become very important since widespread loan modification to include principle reductions were not common in our market.

It is just a matter of getting the right training, following up on files with the banks like blood-hounds.

The government, banks and the real estate market are fluid and ever-changing. Our aim is to be successful on behalf of our clients,  we know what works for short sales today; not 6 months ago and certainly not what worked for short sales 20 years ago!

When Can I Start a Short Sale?

If you are already behind on your mortgage payment or know that you will be unable to make your payment in the future, then a short sale may be an option for you.

If you have already received a Notice of Default or a Notice of Trustee Sale it is time to consider getting your home on the market quickly before any potential foreclosure.

Should I Try Loan Modification or a Short Sale?

This is a personal decision but whatever you decide be realistic. Don’t just think there is some magical unknown government or bank program that will save you. If there were, there would not be a national foreclosure crisis. Get informed, deal with your problems, and get good advice from experienced professionals in both areas, loan modification and short sales.

Delinquent borrowers often waste too much time trying to do a loan modification and leave insufficient time to get a short sale purchase offer on their home. If you wait until your about to have your home foreclosed, your chances to sell on a short sale diminish greatly. It is still possible? In some instances homes were listed for three days prior to a foreclosure date, postponed, and eventually closed the home via a short sale.

That result was atypical, however, it just goes to show it is possible, but not probable.

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PHONE:                                       310 925-6056