In the last 3 years, short sales have become the predominant type of sale in Orange County, CA. It is estimated that over 60% of all home sales are short sales. As an independent agent, they make up the majority of our work. We specialize in short sales and handle each and every shorts sale in house with diligent care. This is unlike “short sale mills”. Your case is handled and orchestrated by a highly skilled agent with tremendous experience in short sale transactions. We will attempt to answer some of your most common questions. After reading this document, please see our additional materials under the short sale category of our blog and call for an immediate personal consultation.
1. How long will it take?
The typical range of short sales is from 4 months (rare), to 6 to 8 months (typical), up to over 1 year (sometimes).
2. Why does it take so long?
Mainly because the bank typically does not start to take the file seriously until it is almost in foreclosure. Don’t be surprised when you get a notice of a trustees sale even though you have requested a short sale. Typically we just need to call and make sure an extension has been granted. It can be granted by most banks up to 4 times.
3. How much does it cost?
Most of our sellers do not pay anything out of pocket to short sale their homes. All of the fees typically come out of the gross proceeds of the sale. What is left pays off the remainder of the note. Therefore our commission is paid from the gross sales price of the home. Rarely, a bank may request seller contribution towards a settlement. However, we do our best to negotiate any requested fees down or ask the buyer to contribute towards settlement.
4. Can I stay in my house even though I am not making the payments?
Yes, absolutely. It is better that you occupy it rather than abandon it. The bank would rather have you taking care of the premises and not let it be subject to vandalism and deterioration.
5. What will happen to my credit?
It depends. Most of the material that I have read indicated that it is the mortgage lates that effect you most. Therefore, you have the option to make the payments to try to minimize the impact to your credit. However, if you can not, you may rehabilitate your credit after the short sale is complete.
6. How long until I can buy a home again?
That depends. Fannie may states that you may qualify after a 2 year waiting period. This is of course dependent on you re-establishing good credit. Other options help you repurchase faster are contracted sales, seller carries, AITD’s, lease options, and other creative forms of home purchasing. Theoretically, there is nothing to stop you from making a deal to purchase a home right away!
7. What are the steps to a short sale?
A. To begin with, start with a personalized interview free or charge by our skilled representatives. There are many aspects to a short sale that you will want to consider. 1. Are there tax ramifications? You may want to check with your CPA. 2. Do you have a prepay rider or any other special consideration? Do you need to consult a real estate attorney? 3. How many banks are involved? Did they take government bail out money or not. Private lenders tend to be tougher then large public institutions.
B. Meet with your Orange county short sale realtor and list your home for sale.
C. Fill in all forms, paperwork and complete short sale package. We will assist you in making sure that you do this correctly.
D. Find a prospective buyer – This usually take 2 to 4 weeks.
E. We will submit the short sale package.
F. Then wait. Typically your short sale listing will go quiet while the bank assigns a negotiator. This can take 30 to 60 days. Then they will order an appraisal or BPO (brokers price opinion) this may take an additional 30 to 60 days.
G. Once they have the package complete and all of their work done, they may send it to a supervisor or investor for approval. This can take another 30 to 60 days.
H. Upon approval, you are typically granted 30 days to complete escrow. However, if the buyer backs out for any reason then a new buyer and extension will have to be obtained. This could reset the clock another 30+ days.
j. Also be aware that if there is more than one bank involved, the second can hold up the sale. Sometimes by the time the approval is granted on the second, the first will expire and we will need to re-approve. These banks move slow and it is sometimes hard to coordinate their joint activities.
K. Finally, upon closing of escrow, your debt will be settled and your short sale will be completed with a pay off.
8. What happens if they do not approve my short sale?
Great question. First let me say that nearly all of our short sales get approved. The reason for this is that we pre-screen our clients to make sure they are good candidates. However, in the event that you run in to an unforeseen road block, you still have the option of bringing your note current, or allowing the home to foreclose.
You may have many additional questions, and please feel free to email or call. I would be happy to help any way that I can. I want to applaud you for having the courage to face your and apply the correct solution toward resolving your financial problems. It has been my experience that our clients enjoy immense freedom and relieve knowing that they can move forward and rebuild on more solid ground.
I am looking forward to working with you. Please visit our additional short sale resources at: http://www.jdanielrealty.com/orange-county-real-estate-news/category/short-sales/