A Premier San Diego Real Estate & Mortgage Company
Prestige Properties & Finance
|San Diego Short Sales 101
|What does "short sale" mean?
A short sale is when a property has more liens, or loans against it than the property
is worth. The home owner (seller) convinces their lender to agree to accept less than
what they are owed to release (sell) the property. Typically the home owner informs
the lender that they will not be able to continue to make payments and that the home
is worth less than they owe, and they have no money to pay the difference. By
agreeing to a short sale amount the lender is basically saying "we'd rather get X
amount today than X minus foreclosure costs down the road. A short sale can save
lenders tens of thousands of dollars versus a foreclosure process.
How do I buy a short sale? See also get the best deals
For the most part you buy a short sale as you buy any other home listed on the
MLS. It's just that the lender also has to accept the offer in addition to the home
owner (seller), because the lender is accepting less money than they are actually
owed. Sometimes the seller's side will have already obtained the short sale approval
for a specific amount before listing the property.
What are the pros and cons of buying a short sale?
There are a few concerns to watch out for when purchasing a short sale. Those
concerns include, but are not limited to likely having to wait longer than a few days
for an acceptance or counter offer to your offer and other seller required actions
and responses. They can sometimes take months to even accept your offer, usually
the sellers agent has more details of what stage a particular property is at.
Additionally, the seller's unfortunate situation could effect you negatively. This might
include a seller that fails to move out after escrow closes, in which case you would
need to evict them to actually gain possession of your new home that you are now
paying monthly for. Evictions are unpleasant for everyone and depending on the
sellers actions (contesting the eviction, filing bankruptcy, etc..), could take up to a
year or more.
And along the same line of concern you want to make sure you've inspected the
property thoroughly, something that should be done regardless, but in this case the
seller is not likely to have many financial resources to compensate you with after the
fact should find something not disclosed or simply not true after escrow closes.
These and other added potential risks can also create opportunity. Because of the
additional possible issues associated with a short sale there is less demand and
therefore may have lower prices. This is more so the case where a lot of similar
other listing inventory exists in the same area.
Identifying and then navigating around a particular home's issues is typically best left
to an agent who is familiar with short sales and knows how to logically work around
the pitfalls arising from a particular home's situation.
Sellers should work with agents familiar with short sales and be clear and realistic
about their goals upfront.
What's an insiders view on short sales?
Short sales can be good deals. The home owner (seller) typically has no financial
incentive in charging more for the home unless they plan on repaying the lender the
shortfall, which is generally not the case. The lender is also likely out of touch with
the neighborhood specifics and can overlook significant advantages of one home
However, waiting for lender approvals, sellers with no future housing arrangements,
and other obstacles can make them less attractive.
How can I find and purchase a short sale? See also get the best deals
It's simple really, contact us. We work hard ever day in the distressed properties
market in San Diego. We are on top of the real estate and finance market, and look
forward to utilizing our time, resources, and experience towards finding you the right
property. Tell us everything you know about your situation and we will provide you
with the best course of action to achieve your goal in the time frame you want to
achieve it. The more we know the better.
|Licensed by the California Dept. of Real Estate. License #01153458
An equal opportunity Real Estate & Finance Company. All information deemed reliable but not guaranteed.
|Prestige Properties & Finance, a Real Estate & Mortgage Broker
2658 Del Mar Heights Road, Suite 207, Del Mar, CA 92014
Ph. 858-484-3446 :: Fax 858-484-3577
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