What Will It Cost Me to Short Sale My Orange County Home?

Though you may want a clear cut answer, the true answer is, “It depends.”

It depends on your hardship, your financial situation, whether your loan was used to purchase your home or if the loan is a refinance.

Although there are many variations, this post will discuss the most common scenarios.

In most Orange County short sales, the bank will pay a large majority of the closing costs for a short sale, incuding the real estate agents’ commission.

Costs Most Commonly Paid by the Short Sale Lender

• Real estate agent commissions
• Seller’s title insurance
• Seller’s escrow fee – though they often limit the amount
• Termite inspection, though often not repairs
• Past due real estate taxes – as long as they are not too old
• A small amount to the second mortgage

Items Sometimes Paid by the Short Sale Lender

• Termite repairs
• Past due HOA – Homeowners’ Association – Dues
• Home Warranty for the new buyer
• Buyers’ closing costs

So, when might a seller have to pay some of the costs of a short sale?

• The short sale lender may not be willing to pay as much to the second lender as the second wants, and someone needs to pay it – however, the seller might be able to negotiate this with the buyer if the seller has no money, and the buyer is getting a good deal and has the cash.
• Past due HOA dues – sometimes the amount can be negotiated with the HOA, and the buyer or seller can pay or share these if the short sale lender will not pay them.
• The short sale lender may require a cash contribution or a promissory note to approve the short sale.  Though I have had many banks ask for these, they seem most adamant about wanting a contribution when the seller has refinanced the house and taken out cash during the refinance.

We have completed a large percentage of short sales where the sellers paid no money to close the short sale.  We have had a few where the seller needed to bring a few thousand dollars to close, and in one case the seller had to bring a good amount of money to be released from the deficiency the second mortgage could have received.  Even in this last situation, the short sale seller contributed less than 25% of what they would have had to pay just for the commissions in a traditional sale.

If you need to sell your home and you owe more than it is worth, don’t decide not to sell it just because you think that you will have to pay all of the closing costs of a traditional sale. In many cases, there are little or no costs to the short sale seller when you do an Orange County short sale.

If you have questions about doing an Orange County short sale and whether or not you may qualify, please give me a call at 714-319-9751.