Simply put – a short sale is when a bank agrees to a sale that is “short” of the amount owed.
If you sell a home for a price where the net proceeds of the sale are less than obligations on any notes like the mortgage and any second mortgage that creates a deficiency. The “short sale” that you hear so much about is the sale where a lender agrees to waive the deficiency.
Example: A typical home purchased in Wildomar, CA between 2004 and 2006 would cost around $450,000. In today’s market, the same home may sell for around $250,000, leaving a “short” of $200,000. The lender(s) will need to agree to this “short” and then your property will sell and close escrow. The lender/bank will take a $200,000 loss.
A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower. A short sale will often result in a negative credit report against the property owner; however it is less damaging than a foreclosure report.
A short sale is typically a better alternative to a foreclosure; however, timing is critical when you are considering a short sale. Also, there are different types of short sales such as HAFA, and each bank has their own process and policies. This is why it is important when choosing a short sale agent that they have the ability to navigate through your bank’s process and policies. This is why I do not do all the negotiating myself. My team has a full time bank negotiator that continually works on our files and keeps track of all requirements and deadlines. This allows me to focus my attention on my clients and their needs.
It is a rough world right now and dealing with the banks is not for the faint of heart. Let me help you through the process. If you are looking for a kind, caring, and competent Short Sale Agent, I would be honored to represent you. Please call Odalys (951) 440-6029. There is no cost for consultation or our services. The bank pays for my services.