Short Sales

Team Whitney is very experienced with short sales and pre-foreclosure sales.  We have been able to assist several homeowners in the South Bay community with these types of sales, and many Buyers are also interested in short sales and pre-foreclosure sales, as these properties tend to sell for less than market value as distressed property sales. This type of sale is different than a foreclosure or real estate owned sale, more commonly known as an REO sale, which we will discuss in a different blog.

If you are a Seller and the unpaid balance on your property is more than the current market value, Team Whitney can possibly process a short sale with your lender at no cost to you.  Be aware of companies that try to charge you, as the Seller, to facilitate a short sale on your behalf.  The process is called a short sale, as a Seller is essentially selling the property “short” meaning “for less” than the balance owed on the property, and requesting for their lender to forgive the remaining debt owed on their loan.  Our team calls them “long sales”, as the average time to negotiate with a Seller’s lender takes about 9 weeks BEFORE we can open a 30-day escrow period.  The lender will want us to document and prove the Seller’s hardship which has or will prevent them from being able to make their mortgage payments.  A lender will not agree to a short sale and take a huge financial hit on a property if the Seller does not have a legitimate hardship.  Examples of hardships are the loss of a job, relocation, a deceased spouse, fluctuation in self-employment income, or health issues.  As a Buyer, you want to make sure you hire a real estate team who is very familiar with the short sale process.  If Team Whitney represents you as a Buyer, and the short sale is not our listing, we will ask the listing agent a series of questions to make sure their Seller has a legitimate hardship.  Many agents list short sales for Sellers who do not qualify, so in the end, it ends up being a waste of time for everyone involved.  Team Whitney negotiates short sales for other real estate agents in the area too, so we are very knowledgeable on the short sale process.  Many agents will not show their Buyers short sale properties.  Our team feels short sales can be a benefit to both Buyers and Sellers in our community.  If a Seller is truly in financial distress, our team can potentially help them facilitate a short sale to get them out of their property debt.  Homeowners who participate in a short sale may be able to purchase a new home in 2-3 years, whereas with a foreclosure, a purchase cannot take place for 5-7 years.  Our team has also been successful in obtaining relocation fees for Sellers up to $30,000, where as in a foreclosure, a Seller normally does not receive any monetary compensation.  On the Buyer side, a short sale is beneficial too, as you normally can purchase a property for 5-20% under market.  If you are a lower down payment Buyer, using a loan product such as a VA or FHA loan, Team Whitney has been very successful in also having the Seller’s lender pick up our Buyer’s closing costs, so our Buyers essentially only came out of pocket their down payment for the purchase.  Buyers need to be aware that just because a Seller accepts your offer for a short sale, does not mean the bank will agree to the accepted price or terms of your offer.  Once the Seller signs your offer, it is submitted to the bank, and that average 9-week process begins.  At the end of the 9 weeks, the bank can reject the short sale all together, accept your offer, or counter your price and terms.  As the California contract currently states, while you are waiting out those 9 weeks or so, the listing agent can submit additional offers to the lender as they come in.  Our team does not believe this is a fair process, as with a normal escrow process, when the Seller signs your offer and you enter an escrow, any other offers that come in are in a backup status.  Team Whitney places additional clauses in the contract to protect you as a Buyer, preventing any additional offers from being submitted to the Seller’s lender.  Whether you are a Buyer or a Seller, it is important for you to hire a real estate team who is very knowledgeable with the intricate short sale process.

Every foreclosure situation is different, so for more information, please contact Danielle Whitney Moore with Team Whitney (Keller Williams Realty L.A. Harbor) at (310) 987-9103.