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What Is A Short Sale?

What Is A Short Sale?
By John Occhi, Hemet CA REALTOR
Hemet CA Real Estate

A Short sale is simply a program that lenders have in place to satisfy their need to liquidate properties, without undertaking the expensive and time consuming foreclosure process. It is their way of cutting their losses. They do this by accepting less than the amount owed on mortgages that meet their criteria and have fallen into default.

In Hemet CA, real estate market has taken a turn, as it has throughout all of Riverside County and the Inland Empire region of Southern California. Today many homeowners cannot afford the mortgages they entered into only a couple of short years ago. Many of these loans had a low teaser rate that has dramatically escalated - or will very soon. It is not uncommon for a Hemet homeowner to be paying $500, $750 or even a thousand plus dollars more than they were on their mortgage from a year ago.

The effect of this epidemic situation is that properties are being sold for less than the existing debt.

If you are a consumer in this situation, you should consult with your legal and tax advisors, because a REALTOR is not allowed to give legal advise. You should find out how this will adversely affect your credit and what if any tax consequences a short sale will have on your personal tax bill at the end of the year. Also, make sure you check to see how much worse a foreclosure would be if you do nothing.

Do not be offended if an investor wants to buy your home for less than what you owe - it has become the natural cycle in the real estate market in Hemet California, today. Investors will negotiate with your lenders hoping to buy the property for about 75% to 80% of the now current fair market value - which is undoubtedly less than your loan if you borrowed 100% of the value when you bought your home within the last two years.

If you are anticipating problems with your mortgage and would like to know if there is a solution that can help you save your home, I suggest you contact the Freedom Foreclosure Prevention Services, a reputable company that I have recently aligned myself with.

If you learned anything here, please feel free to add a comment below.

Now Have a Blessed Day,

John Occhi, Hemet CA REALTOR
Mission Grove Realty
Loss Mitigation Consultant

SEE ALSO:
How do Short Sales Affect the Economy?

Until Next Time, Have a Blessed Day,

John Occhi, ePRO & Five Star Certified REO REALTOR®
www.JohnOcchi.Com
Hemet - San Jacinto Valley, CA
The Excellence in Real Estate Team @
Allison James Estates & Homes
2281 W. Esplande Ave, #102-B
Next to "Starbucks"
San Jacinto CA 92582
(951) 654-5550

This blog and the contents written here is the intellectual property of John Occhi, Hemet - San Jacinto Valley REALTOR® in the South West Riverside County region of the Inland Empire of Southern California. The views and opinions expressed are just that - views and opinions of John Occhi and those who comment. Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance.

This blog is part of the ActiveRain Real Estate Network, which is a social network highlighting the best of Web 2.0. Information is provided with the intent of educating and assisting home owners, home sellers, home buyers and real estate investors with information the can be used to make better real estate decisions.

I am proud to be a full time REALTOR® who is proud to be a contributing member of the ActiveRain community.

Posted by John Occhi, ePRO, Hemet-San Jacinto CA Real Estate, 951-443-6259 on 06/10/2007 02:35 PM

Comments (16)

hemet, ca, real estate, short sale, foreclosure, freedom foreclosure, loss mitigation, investor, ffps

Originally posted at: John Occhi's Blog: What Is A Short Sale?

This post has been included in California Information Riverside County, CA Information Hemet, CA Information
Post is included in group: Realtors®
Post is included in group: Real Estate Investing Newtork
Post is included in group: Real Estate Agent-Investors
Post is included in group: Short Sale Specialists & Pre-Foreclosure Education
Post is included in group: Short Sales Specialists

16 Comments on What Is A Short Sale?

JUN

2007

I see Hemet, CA is really taking a hit. This is one reason I don't like to pressure people to hard into buying.

Short sales will be almost assuredly be increasing across the country as ARM programs begin to adjust (especially in the sub-prime sector). Astute agents may be able to get to these people before they are in trouble and can possibly sell the house and get them out of trouble.

It will be a win-win situation for everyone.

more than ever before lenders are offering restructuring and other forebearance programs.

as long as you don't wait you may be surprised.

i'd try this before i went to a foreclosure specialist.

Thanks for the article. I'd love to hear more about the process of contacting the banks/lenders.

JUN

2007

Treci - Regardless of the market - I NEVER PRESSURE anyone into making a buy or sell decision. My job is to facilitate the process - there are enough homes for them to make up their own mind.

Steven - I agree, the key is to get to the seller before they are in foreclosure. There are so many more options that way.

Jay - just like every other aspect of a legal action, the end user can always do it on their own. but why? A Foreclosure Prevention specials will use the same methods but will do them professionally. Let me ask if it was you and the only time you could conduct this business was while you were at work - with people around ll the time, could you sit on hold for an hour or two and then have such a personal conversation? Probably not. A foreclosure specialist is just that, a specialist - just as you specialize in selling real estate - why can't someone do it themselves and save your multi-thousand dollar commission when a foreclosure specialist will be in the ball park of a single mortgage payment.

Kelly - Thanks for the input. I have a series of articles planned, so please check back often

Now have a Blessed Day,

John Occhi, Hemet CA REALTOR

Thanks John. Well explained. I many many listings on my local mls that are either short sales or bank/lendor owned. Paying full real estate commissions and not as willing to negotiate as I would have thought! The homes aren't going to go up in value anytime soon and will most likely continue to depreciate in value. Why aren't banks/lendors more willing to slash prices, get there money back and start generating more business before they're forced to foreclose?

Also, I'd love to hear from some experienced members who could advise real estate agent on how to make their clients low ball offer more attractive.

JUN

2007

One advantage to a short sale specialist is that they are often allowed to order the appraisal or BPO.

LAURA - That would definatley be an advantage

EVAN - As far as the maket my personal belief is that we are at the very beginning of the next rtrend and as the summer comes and goes, we are going to see some heavy drops beofe the year is out - my opinion. I trhink you should be able to convince your selling clients that any offer right now is a good one. If they are in a short sale situation, it really does not matter too much what they sell for - the key is they sell and avoid foreclosure. too many options for the buyer today. Make sure you give them an IRS 982 - Reduction of Tax Attributes Due to Discharge of Indebtedness and advise them to consult with thier tax advisor.

Now Have a Blessed Day,

John Occhi, Hemet REALTOR

JUL

2007

John,

I live in Texas and just happened across Active Rain and your articles. I have found them to be very informational, even though California and Texas are worlds apart in real estate. I am curious about something... is there a resource to find foreclosures that don't require a subcription? It seems like this is public information and would be available without having to buy into a subscription like RealtyTrac (sp?).

Would love your comments.

PS - I am not in the real estate business.

John,

Would love your comments.

PS - I am not in the real estate business.

J Berardi - Thanks for stopping by and your kind words. Please feel free to leave a comment on every article you read, if you find some value. Your comments may help others and certainly helps inspire me.

You are right the information is free. Perhaps your county Recorder has a website that you can access. Certainly you have the ability to go to the course at your county and look at all of the documents that they have there. You can bring a pad or you can bring your laptop and log in all the info you can find. However it is hard to keep up to date - especially if you are more than a few minutes from the county recorders office.

The services pay for thier information, so they charge for it - like any other business model. Heck, you cant even call 411 for free anymore. There is value in information and it costs to disburse - so for the foreseeable future, I am sure this is the business model that will prevail for the foreseeable future.

This may not be the answer you are looking for. I hope it helps,

Now Have a Blessed Day,

John Occhi, Hemet REALTOR®
Mission Grove Realty

AUG

2007

I have just made some monor adjustments to this post - including the groups that it is posted in. so, I home that anyone looking for information on Short Sales will find this useful.

Now Have a Blessed Day,

John Occhi, Hemet REALTOR®
Mission Grove Realty

FEB

2008

John, are you having much success with Freedom Foreclosure Specialist?

FEB

2008

Intersting post. I have two listings that are a possible short sale. Thanks for the post. Alot more short sales in the coming months as those ARM's start to adjust.

FEB

2008

Hello!

Would you like to become part of our community, network, learn and teach others about what you know.

Please come and introduce yourself!

Investors Lounge Online is networking communities where like-minded people gain knowledge, share ideas, information, and resources and help each other achieve financial success through real estate related investments.

We would like to know about your interest and learn some thing from you!

Respectfully

Hanh Dang Brown

MAY

2008

john, question.

i have a duplex in los angeles. i've been trying to sale since last, june. sales, refinance and nothing has worked. due to an adjustable loan - can't pay. behind 6-9 months and it's getting worst.. was speaking with a broker and they mentioned 'investor-short sale'.. is this something i want to considered..

my loan is not upside down .. i don't have any other loans attached to the property.. just the frist loan.. although i owe 3yrs of back taxes. the property appraised for much higher than i owed..

should i continue conversation with this investor and how will i be able to get some of my equity back or at least the money i've put in the property?????

great website - very informative,

sandra / los angeles

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