Short Sales

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

Real Estate Agents & Short Sales

If you think a pre-foreclosure sale might be right for you, working with the right professionals is critical. Real estate agents are paid only on short sales that actually close, which can create a terrible conflict of interest if closing the sale would not be in the homeowner's best interest. Frequently, lenders ask homeowners to sign a liability agreement (e.g. a promissory note) after the transaction closes. Closing a pre-foreclosure sale on these terms leaves the homeowner worse off. Only qualified real estate attorneys can give you sound legal advice and fully represent your interests.

Navigating Tax Issues

Due to potential tax repercussions, it is important to talk to your tax advisor or work with a law firm before selling your property. If you sell your home for less than what you owe, the IRS may consider this difference as income and tax it accordingly. Most pre-foreclosure sellers can close the transaction without owing any additional taxes, but the deal must be structured correctly. Again, only qualified attorneys can advance your best interests.

Need Assistance with a Short Sale?

Whether you are selling your house as a short sale or you are interested in buying a short sale home, McFarlin LLP in-house brokerage Clear Point Real Estate Services can meet all of your needs. We want to make your short sale process a success and protect you from the complications that may arise. We offer free consultations to prospective clients.

For more information about your rights in real estate transactions, call McFarlin LLP at (949) 570-5025 or contact us online today. A consultation with our Irvine short sale lawyers can help you make the right choices in your sale or purchase.

Hear What Our Clients Are Saying

  • “Everyone I dealt with at this firm was both caring and professional and I thank them.”

    - Len Brown
  • “Tim and his gang of awesome lawyers have helped my family the past five years.”

    - Whitie Rhodes
  • “Their representation was efficient and effective and things worked out in our favor.”

    - Madison Loyola
Discover Our Book on
Making Personal Investment Foreclosure Decisions

Awards & Memberships

  • As Heard On Go Country 105 FM
  • Debt Relief Radio on KABC 790 Saturdays at 2PM
  • As Heard On KNX 1070

Schedule a Free Case Evaluation Today

Contact Us
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please enter a message.