Short Sales & Foreclosures
What is a Short Sale?
A Short Sale is a when a home owner is unable to make their monthly house payments and the loans are more than the home is now worth. The owner asks the bank’s permission to try and sell the house for as much as they can get, which will still be less than the amount the bank is owed. A Short Sale can only happen before Foreclosure. In some cases it may be flagged as a Notice of Default (NOD) or Foreclosure in Process.
The owner may still live in the house during this process. They have to complete a “Short Sale Package” which shows their inability to continue to make the payments and only the bank can approve the Short Sale attempt.
Remember, neither the bank or the owner can control the outcome. They can only try to convince a buyer to make an offer the bank will accept. The owner’s agent has permission to work with the bank on their behalf. When the bank does approve the Short Sale Package, the bank is in the driver’s seat at this point.
[Read more about Short Sales or see below for listings of short sales in the Orange County area]
Orange County Short Sales, $900,000 - $1,000,000
24 Search Results Found. Showing Results 1 - 15.
MLS# S674896
MLS# S680373
MLS# S611533
MLS# S674259
MLS# S672351
MLS# S674660
MLS# S672666
MLS# P811295
MLS# S674927
MLS# S653382
MLS# S680685
MLS# S678749
MLS# S672167
MLS# U11002982
MLS# S667099
How Does a Short Sale Work From the Buyer’s Perspective?
When you as a buyer decide to make an offer on a Short Sale property, you must be aware of the following:
- The bank does not tell the seller or their agent what they are willing to sell for – they will only respond to an offer initiated by a buyer
- It can take 2 months OR LONGER to get a response on your offer
- There will usually be multiple offers – you may not know if yours is highest
- The bank will usually take the highest offer, regardless of the characteristics of the buyer
- If you wait it out, you may win since the highest offer may back out
- The bank may not accept any of the offers they receive
- Your loan program may change while you wait for the bank (higher or lower rates, or more down payment required)
- You may lose another house while you wait for the bank to respond
- If the bank does accept your offer, be prepared for a short close date (within 20 days in most cases).
- If the bank says yes to an offer, and the buyer has gone away, NOW the seller knows what the bank will accept
As a successful Short Sale agent, I will always make sure you are informed and can make decisions about your role in the process.
Short Sale Tips for Sellers
- Get an experienced Short Sale agent to represent you
- Complete and submit the Short Sale Package to your bank as soon as possible
- List your house for sale as quickly as possible
- Set a low price for your house
- If you don’t get offers the first week, lower the price
- Have an exit plan – where will you move to?
- Don’t take anything personally
- Ask for help whenever you need it
- Make sure the bank postpones the Trustees’s Sale if you have submitted one or more offers for the bank to consider – do everything you can to get evidence that this has been postponed
- Make sure you know the consequences of a Short Sale
- Be prepared for Foreclosure – don’t be in denial of the possibility it may happen
The most successful strategy I have seen in today’s market to sell a house in a Short Sale and avoid foreclosure is to set a price for the house that is well below the market value. In other words, the agent puts a lower asking price on the house than what other comparable houses have sold for. This usually results in multiple offers that come in quickly – exactly what is necessary to start the process with the bank.
What Happens if a Short Sale Property Does Not Sell?
If a distressed home owner tries to sell their house in a Short Sale and it does not happen before the Trustees Sale, the bank’s Trustee tries to sell the house at a public auction; notice of which is given prior to the sale. If no one buys it at the sale, the bank becomes the owner. This leads to the REO process.
Short Sale Success Stories
- Buyer waited 3 months for the bank to respond to an offer, finally got the offer accepted and set a new low price for the neighborhood.
Scary Short Sale Stories
- Bank agreed to accept the buyer’s offer, then forgot to tell the Trustee to cancel the sale. The bank took the property back, the seller was unable to avoid foreclosure, and the buyer ended up homeless.
- Buyer made an offer and during the 3 months they waited for the bank to respond, their loan program changed and they no longer qualified. The buyer ended up homeless.
- Buyer made an offer over the highest known offer while the seller was still waiting for a response from the bank, but the offer was never presented to the bank for consideration. The buyer ended up homeless.
For more information about Short Sales or Orange County real estate, contact Leslie Eskildsen, Realtor, Coldwell Banker Previews Int'l. Phone: (949) 678-3373 Fax: (949) 709-1994
