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What is a House Short Sale? - Orange County Home Owners Want to Know

Posted by Leslie Eskildsen on Wednesday, February 17th, 2010 at 3:39pm.

In today's tight economy, many Orange County home owners are deciding that a Short Sale is the best option when it comes to their home.

Options for Home Sellers in the Face of Difficulty

Faced with issues like job loss, divorce, illness, and other life changing events, many times getting out from under the burden of a home mortgage is the best option.  Here's some basic information for Orange County home owners evaluating Short Sale advantages.

What is a Short Sale on a house?

A Short Sale is when the bank that gave you a loan to purchase your house for $500,000.00 agrees to let you sell the home on the open Real Estate market for less that what you owe on the home.  If you financed 100% of the $500,000.00 purchase, you probably currently owe about $500,000.00.  They house may only be worth $400,000.00 in today's market.  The bank must agree to sell your home for less that you owe. 

Can I Do a Short Sale?

To be eligible for a Short Sale of a home, you must prove financial hardship to your lender.  Each lender has a specif process for submitting your hardship case.  Typically you will be asked to provide a Financial Statement - outlining in detail all the income and expenses of your household, bank statements, pay stubs, and the last two years of tax returns.  Showing hardship gives the lender a good reason to consider pre foreclosure short sale rather than the more costly and credit-damaging alternative.

How Long Does It Take?

Once you have submitted your information to your lender, and the lender agrees to approve your situation for a Short Sale, you will work with your Realtor on a marketing plan for your home - the best result being multiple offers in a very short span of time.  You and your Realtor review the offers and submit the best one to your lender.  Each lender has its own Short Sale process - this can take from 1 - 6 months to reach a conclusion.  Patience is certainly required, although some lenders are working on rolling out "Fast Track" or "Pre-Approved Short Sale" programs.  And it helps to have an agent who specializes in Short Sales on your side.

Read more in our Short Sale FAQ.  If you'd like to learn more, or talk about your specific situation, I'm here to help.

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