Buyer Education Series
Third in a series of ten educational articles
About Short Sales
by Michelle C. Carr-Crowe, ABR®, ALHS®, RECS®, SRES©
A short sale is a simple concept with a sometimes complex process that can end in a pleasant result - at least for the buyer-a nice home in relatively good condition at a very fair-and often low-price.
A short sale is when the seller is "short" of money to close the sale. The amount "short" is determined by the current market price a willing, able and qualified buyer is committed to pay at any given time.
In the higher-end markets throughout Santa Clara County (Silicon Valley), such as Palo Alto, Saratoga, Cupertino and parts of San Jose with Cupertino Schools, short sales have historically been rare until relatively recently. For example, there have been no short sales in the Lynbrook High area of San Jose until just this year. Today there is a 1138-square-foot 3 bedroom nicely updated starter home for $818,000, making it the lowest-priced single-family home within the very desirable school combination of Dilworth, Miller & Lynbrook High.
There are two ways of being "short""
1) the seller doesn't have enough money left over after paying off all of the loan(s), tax bills or other liens to cover the other standard closing costs.
2) the home is worth less in the market than the existing loan(s) on the property, so there isn't enough money to pay off the loan(s) and the closing costs.
A short sale requires lender approval of any offer, regardless of whether the seller has accepted the offer. If there are two loans, (even if they are both with the same lender), they are originated in two different departments requiring two different approvals. Again, the lender(s) must approve any offer before it can truly move forward to close.
A pre-approved short sale is when a lender has already authorized acceptance of a particular price on a home, either thru the efforts of an agent, the seller, or a professional short sale negotiator - OR due to a prior approved offer where the buyer backed out prior to completion.
Pre-approved short sales are usually based on approving a particular buyer and their qualifications for a specific property. Sometimes a negotiator is able to obtain a pre-approved price subject to a qualified buyer being found after the fact. While a pre-approved short sale can speed up the process, some lenders insist on starting all over again when a new buyer comes in, even if they write an offer at the same exact pre-approved terms.
With short sales, the existing lender(s) have the legal right to, and commonly require, the new buyer to submit a loan application and all documentation for their review, just as if applying for a loan with that lender. (Some that frequently do this include Countrywide, Wells Fargo and Bank of America.) However, the existing lender(s) cannot require the new buyer to actually obtain the new loan with them.
Things to keep in mind: this can be a long process - sometimes as fast as 30-45 days, other times as long as 9 months. The process is impersonal and governed by people at the lending institution for whom the home is just a file, and there is no urgency on the lender's end to complete a deal in any particular time frame, even when they are losing money or the buyer is losing interest. Some lending institutions, such as IndyMac, require additional signatory approvals after receiving the basic approval - often from a bank officer, CEO, CFO, etc.
For a buyer with the time and patience to endure the slow process, a short sale can be a blessing in the long run. A great real estate consultant can help prepare, educate and guide you through the process. If you think of the short sale purchase as navigating through the jungle, you'll be better able to cope with the surprises, frustrations and scares that occur along the way.
Interested in learning more about short sale and other buying opportunities in your area? Just send an email with your information, the area you're interested in, specifics about the type of property you like, your timeline, and your contact information to shortsale@michellejudycarr.com. To see a list of current short sale properties in popular Cupertino, San Jose and Saratoga areas with Top Cupertino and Saratoga Schools, visit our Short Sale pages.
Michelle C. Carr-Crowe is a full-time real estate consultant and the leader of the Get RE$ult$ Team based in the Silicon Valley Bay Area. A licensee for over 20 years (DRE #00901962), Michelle and her team specialize in helping people buy, sell & invest in homes and properties in the San Jose Lynbrook, Cupertino, Saratoga & Palo Alto School Districts throughout Santa Clara County. She can be reached at 408.252.8900, info@lynbrookhighhomes.com or www.michellejudycarr.com.
Just Call ... (408)252.8900
Michelle C. Carr-Crowe and the Get RE$ult$ Team,
Your Lynbrook, Cupertino & Saratoga Schools Experts &
Your Family's Real Estate Consultants for Life
For more information and showings of these and other short sale, bank-owned and traditional home opportunities.
Michelle C. Carr-Crowe's unique qualifications include being an ABR® (Accredited Buyer Representative), ALHS® (Accredited Luxury Home Specialist), RECS® (Real Estate CyberSpace Specialist), and SRES© (Seniors Real Estate Specialist.
Buyer Education Series
Third in a series of ten educational articles
About Short Sales
by Michelle C. Carr-Crowe, ABR®, ALHS®, RECS®, SRES©
A short sale is a simple concept with a sometimes complex process that can end in a pleasant result - at least for the buyer-a nice home in relatively good condition at a very fair-and often low-price. In the higher-end markets throughout Santa Clara County (Silicon Valley), such as Palo Alto, Saratoga, Cupertino and parts of San Jose with Cupertino Schools, short sales have historically been rare until relatively recently.
A short sale is when the seller is "short" of money to close the sale. The amount "short" is determined by the current market price a willing, able and qualified buyer is committed to pay at any given time.
There are two ways of being "short:" 1) the seller doesn't have enough money left over after paying off all of the loan(s), tax bills or other liens to cover the other standard closing costs.2) the home is worth less in the market than the existing loan(s) on the property, so there isn't enough money to pay off the loan(s) and the closing costs.
A short sale requires lender approval of any offer, regardless of whether the seller has accepted the offer. If there are two loans, (even if they are both with the same lender), they are originated in two different departments requiring two different approvals. Again, the lender(s) must approve any offer before it can truly move forward to close.A pre-approved short sale is when a lender has already authorized acceptance of a particular price on a home, either thru the efforts of an agent, the seller, or a professional short sale negotiator - OR due to a prior approved offer where the buyer backed out prior to completion.
Pre-approved short sales are usually based on approving a particular buyer and their qualifications for a specific property. Sometimes a negotiator is able to obtain a pre-approved price subject to a qualified buyer being found after the fact. While a pre-approved short sale can speed up the process, some lenders insist on starting all over again when a new buyer comes in, even if they write an offer at the same exact pre-approved terms.
With short sales, the existing lender(s) have the legal right to, and commonly require, the new buyer to submit a loan application and all documentation for their review, just as if applying for a loan with that lender. (Some that frequently do this include Countrywide, Wells Fargo and Bank of America.) However, the existing lender(s) cannot require the new buyer to actually obtain the new loan with them.
Things to keep in mind: this can be a long process - sometimes as fast as 30-45 days, other times as long as 9 months. The process is impersonal and governed by people at the lending institution for whom the home is just a file, and there is no urgency on the lender's end to complete a deal in any particular time frame, even when they are losing money or the buyer is losing interest. Some lending institutions, such as IndyMac, require additional signatory approvals after receiving the basic approval - often from a bank officer, CEO, CFO, etc.
For a buyer with the time and patience to endure the slow process, a short sale can be a blessing in the long run. A great real estate consultant can help prepare, educate and guide you through the process. If you think of the short sale purchase as navigating through the jungle, you'll be better able to cope with the surprises, frustrations and scares that occur along the way.
Interested in learning more about short sale and other buying opportunities in your area? Just send an email with your information, the area you're interested in, specifics about the type of property you like, your timeline, and your contact information to shortsale@michellejudycarr.com. To see a list of current short sale properties in popular Cupertino, San Jose and Saratoga areas with Top Cupertino and Saratoga Schools, visit our Short Sale pages.
Michelle C. Carr-Crowe is a full-time real estate consultant and the leader of the Get RE$ult$ Team based in the Silicon Valley Bay Area. A licensee for over 20 years (DRE #00901962), Michelle and her team specialize in helping people buy, sell & invest in homes and properties in the San Jose Lynbrook, Cupertino, Saratoga & Palo Alto School Districts throughout Santa Clara County. She can be reached at 408.252.8900, info@lynbrookhighhomes.com or www.michellejudycarr.com.
Just Call ... (408)252.8900 Michelle C. Carr-Crowe and the Get RE$ult$ Team, Your Lynbrook, Cupertino & Saratoga Schools Experts & Your Family's Real Estate Consultants for LifeFor more information and showings of these and other short sale, bank-owned and traditional home opportunities.
Michelle C. Carr-Crowe's unique qualifications include being an ABR® (Accredited Buyer Representative), ALHS® (Accredited Luxury Home Specialist), RECS® (Real Estate CyberSpace Specialist), and SRES© (Seniors Real Estate Specialist.
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