Short Sale Information

The Carlsbad real estate market is being affected by the mortgage credit crisis, the flat and declining housing market in San Diego County, and the overall economy. Because of these basic issues affecting many homeowners, many people have been looking into real estate short sales.

What is a short sale:

A short sale is when you sell your home and ask the mortgage company holding your note to accept less than the outstanding mortgage amount. Homeowners have started t o use this method when the value of their home is less than the money they own on the mortgage.

The benefits of this type of sale are that it allows the home owner to sell the property with out going into foreclosure or declaring bankruptcy. Not all lenders have been allowing short sales but given the current market, we are seeing more and more short sales being completed. In addition, not all properties qualify for a short sale. If you would like to know if your property qualifies, please contact us for a free evaluation.

Selling a Short Sell Property:

If you are interested in selling your home through the short sale process, we would recommend you start by doing the following:

Obtain legal advice from a competent real estate lawyer
Call an accountant to discuss short sale tax ramifications

Once you have determined that it makes sense to follow this path, you should then proceed to follow the next steps as outlined below:

Call your Lender - They may ask you to fill out a number of forms which will allow them to collect the data necessary to make a decision based on your current situation. In addition, it may take a few calls to reach the proper person to be able to help you at the Lenders. Many of the top mortgage companies have specific departments to handle these issues and given the current market, they are most likely overwhelmed so be persistent.

Offer on the Property, Once you have an accpeted offer, the lender will then want a copy of the offer. They will then determine under what terms they will agree to the sell. This can range from renegotiating the agents commissions to refusing to pay certain fees which are a normal part of the transaction.

Buying a Short Sell Property:

If you are interested in buying a short sell property, the biggest thing to remember is that the process will normally take twice as long as buying a regular property. There are many reasons for this but the primary reasons are that you have more people involved in the transaction in addition to the fact that the lender is most likely dealing with multiple properties at once and can only work so fast. So be patient and be persistent.

If you are willing to put up with the added hassle of purchasing a short sale property, the list below will help you succeed in achieving your goals.

Before you make an offer, make sure to research the public records and find out some of the details. For example, who is the lender, who is on the title of the property, is there a second mortgage on the property. These are all important aspects and the more you know the higher your chances of success.

Also Remember, just because you have an accepted offer from the seller, the deal will not be valid unless the lender agrees to the offer as well.

Give the Lender a deadline to accept: Although this does not always work, this is good for your planning. You don't want to be waiting for the lender to approve while you could be looking for another property if this sale is not finalized.

Make sure that you have the ability to have the property inspected. Although you pay this fee, it is important you know what you are getting yourself into. Remember, the seller is already in default of the loan so chances are they have also not properly maintained the property and there will be repairs that you will have to make when the purchase is finalized . The lender, in general sells all properties as-is so remember this is not a tool to use in the negotiation process.

We hope this information has given you some of the basic issues associated with a short sale property. If you are interested in this method of buying or selling real estate, give us a call or send us an EMAIL. We will answer all your questions and get you started down the path.