SoCal Expert Short Sale Realtor
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What is a Short Sale?
Short Sale Definition
Simply put, a Short Sale occurs when a homes market value is less then the outstanding mortgage debt plus sales costs (sometimes called an upside down Mortgage. In order for a Short Sale to actually close, the mortgage bank(s) must agree to write-off a portion of the outstanding loan debt.
Short Sale Example
For example, if a home is currently worth, and sells for $600,000 with $20,000 in total sales costs, and the total outstanding loan balance is $670,000, then the lender(s) would have to agree to reduce the mortgage loan debt by $90,000 in order to allow the short sale escrow to close. At the close of all of our Short Sale transactions, the homeowner is debt free and incurs no cost of sales, for we insure the fee's and expenses are paid by the bank.
New Federal Govt HAFA Short Sale Program
The US Treasury Department has released the new federal Home Affordable Foreclosure Alternatives program (HAFA). The HAFA program is designed to streamline the short sale process and offers financial incentives to both homeowners and mortgage banks to encourage this type of resolution versus foreclosure. The purpose of the HAFA program is to help reduce the rate of foreclosures, for short sales have been shown to reduce the financial loss to the banks. And, short sale properties are rarely left vacant and neglected, thus reducing the chance of vandalism and deterioration that often becomes foreclosure properties. Visit our got.HAFA webpage for more information on this new program.
Why Would a Mortgage Bank Consider a Short Sale?
Lenders often entertain such an option for in the long run, they will usually receive a higher percentage of their principal back as compared to forcing the property into Foreclosure. In a Foreclosure, the Mortgage Bank runs the risk of property neglect or damage, and additional delays and costs, and other market losses.
Today, most California lenders won't commit to a Short Sale until their is a valid and firm purchase offer in hand from a qualified new buyer, and a knowledgeable broker/agent who can negotiate the deal. It's imperative to work with an experienced real estate broker for they will need to prepare a professional and complete Short Sale package.
How is a Short Sale Negotiated with a Mortgage Bank
Short Sales are one of the most difficult and complicated residential transactions. Compared to a normal sale, these transactions require additional paperwork, intricate negotiations with the mortgage banker(s), and careful preparation of the process and purchase offer. A Short Sale package typically includes: a purchase offer contract, buyers loan qualifications, a realistic and detailed analysis of the fair market value of the home, current local real estate market conditions, seller financial information, seller hardship letter and more.
Basically, the Short Sale real estate professional must demonstrate to the mortgage bank(s) that the home is upside down, the purchase offer is fair and just, and the homeowner has a financial hardship worthy of a short sale. This financial hardship can be due to job layoffs, illnesses, divorce, or even the unexpected large increase in mortgage payments due to interest rate resets.
What's Causing the high volume of Short Sales in the Southern California Real Estate Market?
Today, the upside down Mortgages in California are due mostly to the risky, highly leveraged loans that were extensively used over the past 7 years to purchase homes with little or nothing down. Worse yet, many of these loans were adjustable rate loans, or negative amortization loans in which the loan balance gets higher every month.
In addition, southern California home prices have decreased by as much as 35% to 45% in some areas. These factors are causing many home owners to consider a Short Sale to solve their financial crisis. The result is, there are 1,000's upon 1,000's of southern California homeowners who are upside down on their mortgage loan by then of thousands of dollars, and can no longer afford their mortgage payment.
Do I need a Real Estate Professional to Conduct my Short Sale?
Although, it is theoretically possible to conduct your own Short Sale (ie: Do-It-Yourself), we strongly recommend that you do not. Here is why: 1.) Our Services effectively cost you nothing... Need I say more?... but I will. We Negotiate our fee's with the Mortgage Banks, and we do not charge any type of up front fee's (be very wary of anyone who wants to charge an upfront fee by the way).
Why should I work with ShortSalesASAP?
We are glad you are thinking about this question... The Association of Realtors recently conducted a statewide survey which reported that only 10% of all Short Sales actually closed escrow!!! That's terrible.. the Great News is our Short Sale closing Rate is better then 94%. How you may ask?... Experience - Education - Tough Bank Negotiations - Dogged Persistence. Our team consists of Bank Negotiators, an Attorney, a Real Estate & Internet Marketing expert, Listing and Sales experts, and Transaction Coordinators. Our team experience goes back to the mid 1990's when southern California experienced it's last major real estate down turn.
Please give is a call TODAY, so we can begin to help you TOMORROW. Call us at: 888-201-7066 we are easy to talk to, or drop us an email at: Info@ShortSalesASAP.com. We'll keep the conversation and your situation in our strict confidence. If you prefer, contact us by filling out the form above.