Short Sale Lawyers in Irvine

Serving LA, Orange County & Southern California

A short sale is when a homeowner sells their home for less than what they owed on the mortgage. Homeowners who are experiencing financial hardship often use this strategy to avoid foreclosure or bankruptcy. On the other end of the spectrum, many investors are anxious to buy nearly foreclosed properties because they can be a bargain.

At McFarlin LLP, our Irvine short sale attorneys want you to know your rights and options when it comes to real estate. The more you know, the better you can avoid financial harm. Below, we provide insight into how short sales can either benefit or harm you.

For answers to all your questions, call (949) 570-5025 or contact us online for a no-cost consultation.

The Buzz About Short Sales

Bookstores are full of books about buying properties at discounted prices due to short sales. An equal number of websites promise bargains or promote “foreclosure lists” for a fee. But the process of locating, buying, and working through the legal and emotional complications is not for everyone.

Benefits of Selling a Home Through a Short Sale

Short sales can provide many benefits. Depending on your specific situation, the benefits may include:

• Working out an arrangement with the lender to avoid any potential legal action
• Freeing yourself from an underwater mortgage (i.e. when you owe more than what the property is worth)
• Obtaining a fair price for the property and liquidating a declining asset
• Avoiding foreclosure and staying out of public record filings
• Potentially avoiding bankruptcy
• Wrapping up a bad investment with no loose ends or lingering liability

Benefits of a Short Sale for a Home Buyer

Many investors assume that the very status of a property as a “short sale” home listing makes it a bargain. However, this is not always true, and it can be a dangerous approach to real estate investing. The benefits for a buyer are determined by the particular transaction, not a generalization or universal criteria.

Buying a pre-foreclosed home can, however, prove to be a lucrative and rewarding experience. This is especially true when you hire a professional to ensure you avoid making the common mistakes most investors make. McFarlin LLP has an in-house brokerage Clear Point Real Estate Service, which can assist you with every aspect of buying a short sale house.

The Challenges of Short Sales

Knowing the difficulties you can face during a sale is just as important as knowing the benefits.

Common challenges faced in short sale transactions include the following:

• The home has decreased in value since the last sale, and it may be in a declining market
• The property is sold “as is” without any representations or warranties from the lender
• It can take much longer to close the transaction because the lender must approve all aspects of the deal

Investors should be aware that lenders typically refuse to pay for common items such as:

• Suggested repairs on a home inspection
• Pest control (even if the home has such problems)
• Roof certifications or roof repairs
• Home protection plans
• Deferred maintenance