California Short Sale Homes

Do you owe more than your home will sell for?

What is a short sale? 

In real estate, a short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold. In a short sale, the bank or Mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor.

Basically, a short sale is when you owe more on the property that it will sell for in the current market. With this occurrence, you can only sell your home with the lenders approval to accept less, or short, than the amounts owed against the property.

The term "short sale" is becoming a more common term and practice in today's housing market. More and more home owners are finding themselves facing "hardship" and tough times selling or refinancing, due to a variety of factors. If you have experienced any sort of hardship, you may qualify for a short sale of your home and we can help.

How does a bank benefit from a short sale?

Banks make money by lending money and collecting interest on their money. They don't make money owning homes. In fact when they take possesion of a home, that home is considered non-performing asset. By selling and accepting less than owed is still more than auction prices will produce.

So why would a bank want to accept less?

One reason is foreclosures are costly. It costs the banks quite a bit to proceed with a foreclosure. The banks know they will only get the fair market price at best, anywhere. So why spend even more of their losses foreclosing on a property that they can accept a short sale on? Exactly! Short sale means a higher net to the bank.

Another reason is by listing your home for sale, the bank gets a licensed Realtor to actively market your home and bring in the highest and best offers. This clearly brings in more offers at higher prices than auctioning at the court house.