A short sale starts as simply a proposal.  A short sale starts as a proposal for the Lender to allow a sale of a home when its sales price is less than the total amount of the balance due. Your Lender may voluntarily agree to a short sale by accepting less than what is owed.

If your property is a one-to-four residential unit your Lender (s) are generally prohibited from holding you personally liable for the deficiency under California Law after approving and completing a short sale. Restrictions can apply.

A short sale can many times be a more dignified approach to leaving the property compared with a foreclosure. A short sale is not a foreclosure!

• Usually a short sale is a far more dignified and orderly way to leave the property. A  short sale is not a foreclosure as you are working with your Lender(s) to sell the property and find a solution to the problem rather than working against your Lender(s) and walking away.

• Someone is there to handle the paperwork for you. A Licensed Real Estate Professional with short sale experience can walk you through the process of a short sale and keep you updated each step of the way.

• Often times a short sale can minimize your liability with a Junior Lien Holder (2nd Mortgage). What you don’t read on many websites that encourage homeowners to walk away from the property is that often times Homeowners can be liable AFTER the foreclosure for the 2nd mortgage or junior lien holder. This is known as a “wiped out junior”. A property forecloses and the 2nd mortgage may not go away! Not so with a short sale. Some Restrictions Apply

• A short sale can minimize the liability of having a vacant property. In my community, Antioch, Ca the average home forecloses after approx. 9 months of missed payments. Many times the property sits vacant and is often times vulnerable to vandalism, theft, and squatters. Not so with a short sale it is generally recommended to stay in the property until the property is sold.

• $3,000 Relocation Assistance (if you qualify for HAFA).

• Simply put, it’s not a foreclosure!  Have you ever filled out an application for a car loan, personal loan, home loan and it asked “have you ever had a foreclosure”? After completing a short sale the answer would be “NO” as a short sale is NOT a foreclosure.

• It saves the Lender money. I was once told that the cost to a Lender who pursued foreclosure rather than a short sale was averaging $47,000 in Antioch, Ca. In this case, it cost the Lender $47,000 more to not work with the homeowner and foreclose! Compared to a foreclosure a short sale can actually save the Lender money?

•  Through HAFA, the Lender and/or the Investor can often times receive financial assistance to complete the short sale.

• Usually the property through a short sale is sold in far greater condition than through a (trustee sale) foreclosure. As mentioned, I live inContra Costa and foreclosures are usually not presented to the bank in the best condition.  Actually I regularly see homes that have no appliances, no fixtures, even missing flooring.   Because of the lengthy nature of a foreclosure often times the property sits vacant for months before the foreclosure is complete encouraging vandalism, theft and squatters. Not so with a short sale, actually with a short sale the bank never gets the property back but simply approves the sale and it is generally a good practice for the homeowner to remain in the property until the short sale is complete.

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Disclaimer:   A short sale may have legal, tax, credit, and other potential implications therefore readers with credit, legal and tax questions are advised to seek the advice of an attorney or tax professional. The information above is not to be considered legal and or tax advice.  Lic# 01741661.