Short Sales – What Are They & Can You Get One? – You Owe More on Your Orange County, CA Home
than It’s Worth & You Don’t Know What to Do – Option 4
This is a series for people who are “upside” down in their homes and looking to learn about their options. For the the first 3.5 posts see You Owe More on Your Orange County, CA Home than It’s Worth & You Don’t Know What to Do
Perhaps you’ve heard the term short sale bandied about the past several months, and you kind of know what it means, but you’re not really certain. If so or if you just want more information on short sales, this post is meant for you.
WHAT IS A SHORT SALE ANYWAY?
In simple terms, a short sale occurs when the bank who currently holds the mortgage on a property agrees to accept less than it’s owed when the house is sold.
This is known as “shorting” the bank; thus, the term “short sale“.
Many Orange County, CA homes are short sales at the moment because of a 40% drop in median values in the last couple of years.
HOW DO YOU QUALIFY FOR A SHORT SALE?
- Hardship – the borrower/owner must have experienced a material change from the day the loan was received.
- Job loss
- Too much debt
- Death
- Divorce
- Change in mortgage payment
Wanting to walk away from an Orange County, CA home that is upside down is not considered a hardship.
2. Monthly short fall
- Bank wants to see the borrower is having a very difficult time making the mortgage and other expenses each month.
- If you have a lot of money left over, the bank’s are unlikely to consider a short sale.
- You will need to complete a financial worksheet to determine this.
3. Insolvency
- Occurs when debts and liablities exceed all assets.
- Borrower doesn’t have liquid funds to pay down the mortgage.
- Banks may choose not to use retirement accounts when considering this.
WHY WOULD A BANK AGREE TO “SHORT SALE” AN ORANGE COUNTY, CA HOME?
If a person qualifies for a short sale and is facing foreclosure, the bank may choose to accept a short sale for basic business reasons.
- They may net more money from a short sale than a foreclosure.
- If the short sale is completed, the bank may not have a non-performing asset on its books for as long.
- The property is likely to be in better condition than if it were a foreclosure because the seller is more likely to take care of the property while attempting to sell it as a short sale.
Next time, we’ll discuss foreclosure and deed in lieu.
We know what your options are when you owe more on your home than it’s worth and don’t know what to do, and we will share it with you over the next few weeks.
If you want to make sure not to miss any of this series, please subscribe to this blog to learn your options.
If you have questions in the meantime, please contact Christine Donovan at 714-319-9751 or e-mail Me!
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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.
Are you upside down in your home? Do you owe more on your Orange County home than it’s worth, and you don’t know what to do? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.
Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about our system which will make your buying and selling experience easier.
Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.
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Copyright © 2009 by Christine Donovan, All Rights Reserved. Short Sales – What Are They & Can You Get One? – You Owe More on Your Orange County, CA Home than It’s Worth & You Don’t Know What to Do – Option 4