What is a Short Sale: Orange County Real Estate Attorneys

WHAT IS A HOME SHORT SALE?

A real estate Short Sale is when a mortgage lender agrees to sell a home at a price lower than what is owed on the property.
BUYING A SHORT SALE

Purchasers of short sale properties, especially those using a short sale service, often get misled into thinking just because a property is a home short sale they are getting a deal, this is not necessarily the case. Just because the property is being offered for less than the previous buyer owes on it, does not mean it's a deal. If the market has declined 40% (as it has in many places in and around Southern California), and a short sale service is offering a property at a 20% discount, that's still too high! This is the problem with working with a short sale service, to buy or short sale a home, the information isn't always accurate.
When an investor considers making an offer on a home short sale, it is critical to conduct extensive research and economic analysis on the short sale property and the surrounding area. There may be short sale services that can help with this type of background work related to the short sale a home. Short sale services should be viewed with a critical eye, however, as many of them have just been created overnight by the recent housing market correction.
HOME SHORT SALE PROCESS GENERALLY

To short sale a home a seller typically initiates the home short sale process by listing the property for sale at fair market value, notwithstanding what is owed on the mortgage. Eventually, a buyer comes along and the property goes into escrow at a price that will not be sufficient to pay off all liens or loans on the property. After much wrangling, the lender or lenders agree to allow the property to be sold at the agreed upon price and waive the deficiency. The critical part of this process is to have the lender agree to waive the deficiency judgment against the homeowner. This type of result can often only be negotiated by an attorney, not by a so called "short sale service".
SHORT SALE SERVICES

Typically short sale services from a real estate company or short sale agent are completely worthless. That sounds harsh, but a seller of real estate who owes more on the property than it is worth and desires to "unload" the property should seek legal advice as there are many pitfalls to the old do-it-unrepresented home short sale.
The real estate investor looking to buy a home short sale should not work with a specific short sale service, but rather seek out a reputable real estate agent who can assist them in meeting their investment goals. Limiting oneself to only short sales through a short sale service is irrational as many great deals exist in the marketplaces that are not short sales.
If you are a homeowner in foreclosure who has been contacted by a short sale service who has offered to short sale a home for you, please contact McFarlin & Geurts LLP right away to discuss important rights under the California Foreclosure Consultant Act (California Civil Code Section 2945). It is illegal for any such short sale services to charge a fee to homeowners in foreclosure or default. Fee based home short sales are tightly regulated, contact our law office today for real help.