Definition: A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed.
Also Known As: Shorted sale
Alternate Spellings: Short-sale
Examples: If the unpaid balance of a loan is, say, $100,000 and a property sells for $90,000, under a short sale the lender might accept $90,000 as payment in full.

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July 13 2007

CORONA NICK
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Cool.... so is this the same as a pre forclosure? Does imply that the seller is very motivated on selling the property?

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July 13 2007

Robin Lynch, "robin398"
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Robin Lynch, "robin398"

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Preforeclosures are the period between the mortgage Lender's notice to the Borrowers of their default on the mortgage payments and the auction sale event that finalizes the transfer of title to the property to the Lender.

A short sale is when a homeowner in financial distress owes more against the home than what the home is worth, and the homeowner MUST sell.

If the homeowner does not have to sell, or does not want to sell their home, there are MANY options available to homeowners. They could move into a more affordable home and rent out their existing home, they could take on a roommate, they could refinance (although this is not always the best path. Homeowners in a short sale situation are often in financial distress, which means higher rates and fees because you?re seen as a higher credit risk to a new lender), they could talk with their existing lenders to re-configure the terms of the loan. Homeowners who do not want to sell or do not have to sell ought to seek out a HUD-approved housing counseling agency that offers default counseling. Why? Because at bare minimum, SOMEONE, in this case our federal government, has deemed the housing counseling agency competent. What a homeowner should not do is to blindly trust that the signs by the side of the road are from reputable folks. In fact, the assumption ought to be that if a deal looks and sounds too good to be true, it is. There are no angels on earth. Homeowners, you can be easily taken advantage of by these folks. Wake up and keep reading.

Selling short means you?re asking the underlying lender(s) to accept less than their payoff in order to facilitate a sale of the home, instead of foreclosing on the home.

Foreclosure is expensive for a mortgage lender. Mortgage lenders are not in the business of foreclosing on houses. Banks and lenders are in business of making loans. They don?t want the house back. This is a business decision for the lender. Which means it has to make rational, logical sense.

Homeow

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July 13 2007

CORONA NICK
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Are short sales public information?? Where or how can one determine if the property is a short sale???

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July 13 2007

Robin Lynch, "robin398"
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Robin Lynch, "robin398"

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Because you might want to think twice about making an offer on a pre-foreclosure, short sale home. It's not as simple as you may believe, and very few can close in 30 days or less.

A short sale means the seller's lender is accepting a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.
Be aware that the seller will need to be in default, to have stopped making mortgage payments, before a lender will consider a short sale. Also, the seller might have over-encumbered, owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.

Check the Public Records

Do your research before making an offer to purchase. Your agent can find out who is in title, whether a foreclosure notice has been filed and how much is owed to the lender(s). This is important because it will help you to determine how much to offer.
If there are two loans, you will probably deal with the second mortgage lender. The first mortgage lender's position is protected by the second lender unless the second lender does not want to foreclose. For example, if a seller owes $160,000 to the first lender and $40,000 to the second lender, you cannot offer $160,000 because it will wipe out the second lender.

Hire an Agent with Short Sale Experience

It's one strike against you if the listing agent has never handled a short sale, but it's even worse if your own agent has no experience in that arena. You need an experienced short sale agent.
An agent with experience in short sales will help to expedite your transaction and protect your interests. You don't want to miss any important detail due to inexperience or find out your transaction is not going to close on time because no one has followed up in a timely manner.

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July 13 2007

CashRightAway
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Investors who specialize in this may also be a resource. We currently have a dedicated team of short sales representatives.

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July 13 2007

Charley Tabbara, "Orange CountyRealtor"
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Charley Tabbara, "Orange CountyRealtor"

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Nick most short-sales in corona can be found through the mls. Everything is subject to bank approval! Just as any other house you would put an offer on a home. Seller would accept and from then the offer is sent off to the lender for final approval. I've seen homes in escrow get foreclosed on if the lender does not approve. There are some good deals out there in Corona/ riverside couny. A lot of short-sales and a lot of bank ownedhomes aswell which have already been foreclosed on. Ussually what happens is a notice of default is filed aainst the property after 90 days a notice of trustee sale which ussually gets foreclosed on and turns into bank owned. You can use my website to look for some of these homes in Riverside County. WWW.CHARLEYSELLSHOMES.COM

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July 13 2007

Laura Padilla Reyes, "LauraPadilla"
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Laura Padilla Reyes, "LauraPadilla"

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Hi Nick,
Where are you located and if your are considering a short sale you will want to get your home on the market as soon as possible. Feel free to call me or email me your information. www.go2Laura.com

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July 13 2007

CORONA NICK
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What are the most common problems/difficulties and things to watch out for when getting a property through a short sale?

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July 17 2007

Marci Reinheimer
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Corona,

I have run into a lot of problems with sub prime banks accepting the offer. In the area I live, we have homes going into foreclosure because of all the creative financing that went on a year or two ago and the banks not willing to negotiate. It's a long wait process with no guarantee that you will get accepted.

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July 17 2007

Kary L. Krismer, "Krismer"
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Kary L. Krismer, "Krismer"

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I'd second what Marci said, but a lot of it depends on what the listing agent did in advance. If they did nothing to contact the bank prior to listing, you're more likely to end up being disappointed.

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July 21 2007

Fictional Agent
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Fictional Agent

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Not all short sales are profitable, or even a good deal. Be careful! Although they are called "short sales", this as nothing to do with the escrow time. Most of the time, a short sale will take more than 30 days. Have your agent determine (1) has a notice of default been filed; (2)how many loans are on the property; (3) how much money is owed on the property.

If there is a second loan, which is common these days, you will most likely be dealing with this lender. The first lender is covered by the second lender unless for some reason the second lender doesn't want to foreclose.

Keep in mind that it could take weeks to get an acceptance. I wrote an offer on a short sale property to find out that there were 8 other offers on it. This property is in California, and the lender in Texas took over a month to respond. Although you would think they want to make a deal, it often takes a long time to even get a response.

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July 25 2007

Kary L. Krismer, "Krismer"
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Kary L. Krismer, "Krismer"

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I just realized you can make exactly $87,978 a month doing short sales! If only I'd known that a year ago! ;-)

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July 26 2007

mme2000
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mme2000

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For those that are interested my company has a site that is geared to help Realtors. The site is informational only but helpful. It's a 3 step registration process. It will automatically default you to the local branch manager. Once you register you can change your representation to anyone you like, even me. E-mail me direct if you want a list of REOs or more information on Short-Sales in your area.

http://realtors.countrywide.com/Realtor/Realtor.aspx

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July 27 2007

Charley Tabbara, "Orange CountyRealtor"
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Charley Tabbara, "Orange CountyRealtor"

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Nick if you're not already working with a ealtor call me and I'll explain how short-sales in riverside county go. Within 15 minutes tops I'm sure you'll understand short-sales and bank owned/forclosures.

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July 28 2007

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