Orange County California Short Sale Guide - What is a Short Sale?

By
Real Estate Agent with Village Real Estate Services, Inc.

Short Sale Guide - Chapter 1 Waht is a Short Sale?

Orange County, California home owners often ask, "What exactly is a short sale?"  Many people have an idea what it means, but there are some interesting ideas percolating out there.  Here are a couple of things a short sale is NOT:

  • A short sale is NOT a streamlined process so you can close escrow faster.
  • A short sale is NOT a way to get the bank to take less than you owe on your mortgage just because you don't like the idea that you owe more on your home than you could sell it for today. 

A short sale IS when the bank agrees to accept less than you actually owe as payment in full on your home loan - IF you and your home qualify.

How to identify if you and your home can qualify for a short sale:

  • When the sales price of a home falls below what is owed on the home loan, the home owner(s) may qualify for a short sale.  
  • There must be a documented hardship.  If the home owner(s) is/are unable to prove a hardship, the bank will not consider a short sale.  It is NOT considered a hardship if you simply owe more on your home than it is worth in the current market.  Some examples of hardship are:
    1. Divorce
    2. Death
    3. Job loss or job change that requires a move
    4. An increase in interest rate that creates a mortgage payment that is beyond the borrower's ability to reasonably pay.
    5. Extraordinary medical expenses

When a homeowner finds themselves in the position to consider a short sale of their home, one of the best resources is to work with a local REALTOR® who is familiar with how to list and sell a short sale.  Not all agents are trained or even care to work with short sales.  It is a lengthy process, there is a great deal more paperwork than for a traditional home sale, and there is an added layer of work involved in communicating regularly with the lender(s). 

If you or someone you know is having difficulty making their payments and they need some help in deciding whether a short sale is the right thing to do, please give me a call as soon as possible so we can discuss your options.  I have been specially trained to negotiate with lenders on your behalf and know what paperwork needs to be gathered to document a short sale. 

It's my pleasure to provide my clients with information to assist them in making informed decisions when contemplating buying and selling homes in Orange County, California. If you have questions and would like some honest answers or need more resources, please give me a call, text me or email me.

Marlene Bridges, REALTOR®

800 777-1775 - Toll Free  ~ or ~  Text Me 714 745-2592

Orange County Real Estate Website

Orange County Seniors Lifestyles Blog

 SRES - Seniors Real Estate Specialist®

CRS-Certified Residential Specialist®

President - Laguna Hills/Laguna Woods Chamber of Commerce 2007-2009

President Elect - Southern California Chapter Certified Residential Specialists® 2008 - 2009

Marlene is a highly experienced and respected South Orange County CA REALTOR® specializing in residential Real Estate and the sale of Homes and Condos in South Orange County, California and Saddleback Valley cities of: Laguna Woods, Laguna Hills, Laguna Niguel, Laguna Beach, Rancho Santa Margarita, Lake Forest, Dana Point, San Juan Capistrano, San Clemente, Aliso Viejo, Mission Viejo.

 

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Topic:
Home Selling
Location:
California Orange County
Groups:
California Short Sales, REO's, and Foreclosures
Orange County Real Estate
Tags:
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Ambassador
687,085
Ann Allen Hoover
RE/MAX Advantage South - Hoover, AL
CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL

Consumers have a lot of confusion about what a short sale is, this is a good explanation.

Apr 05, 2009 01:09 AM #1
Rainmaker
238,029
Marlene Bridges
Village Real Estate Services, Inc. - Laguna Hills, CA
Laguna Homes|Laguna Condos|Laguna Real Estate

Hi Ann - Thanks for stopping by to comment.  I'm glad that the information is clear.  My goal in writing this post was to increase awareness for the general public.

Apr 05, 2009 02:55 AM #2
Rainmaker
1,247,582
Steven L. Smith
King of the House Home Inspection, Inc. - Bellingham, WA
Bellingham WA Home Inspector

Marlene,

You did a great job of describing that. I knew, in general, what they were but you told me finer points that I did not know.

Apr 05, 2009 03:25 AM #3
Rainmaker
238,029
Marlene Bridges
Village Real Estate Services, Inc. - Laguna Hills, CA
Laguna Homes|Laguna Condos|Laguna Real Estate

Hi Steve - Thanks so much.  I hope it will be of value as I explore more about short sales in future chapters.  Thanks for your encouraging words.

Apr 05, 2009 03:29 AM #4
Ambassador
1,542,873
William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Marlene, In San Diego we have a lot of sales that are short and NOT Short Sales. LOL. Actually that isn't funny. Meaning of course the house is worth less than they owe ( no hardship financially). I sold a home for $550 in 2005 and had to sell last fall for $470. So I taught the Sellers how to take better advantage of the loss. Buy a bigger/better home for less and offset the loss. They did and they feel very happy right now. For some this may not be an option but for this couple it worked out great.

Apr 05, 2009 08:45 AM #5
Rainmaker
238,029
Marlene Bridges
Village Real Estate Services, Inc. - Laguna Hills, CA
Laguna Homes|Laguna Condos|Laguna Real Estate

Hi William - I'm working with a couple right now in Orange County who are in a similar situation.  It can be a good time to reposition in a better home at a bargain price.  The difficult part to get comfortable with is the loss that is experienced on the selling side.

Apr 06, 2009 02:50 AM #6
Rainmaker
495,818
Richard T. Dolbeare, R(B)
eXp Realty - Wailuku, HI
R(B), ABR, CRS...Hawaii Multi-Island Specialist

Many seem to think that a short sale is the 2nd bullet and don't understand that a hardship is required. 

Apr 06, 2009 07:09 PM #7
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Rainmaker
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Marlene Bridges

Laguna Homes|Laguna Condos|Laguna Real Estate
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