Home Selling in Santa Maria>Question Details

C, Both Buyer and Seller in Santa Maria, CA

What happens if you sell your home for less that what you owe on the Central Coast? Is it considered a short?

Asked by C, Santa Maria, CA Mon Jul 21, 2008

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It's a short sale ONLY if you already have your lender's approval to do a short sale. Otherwise, you will have to bring money to the closing table - enough to cover your mortgage and all your closing costs. Don't just assume you can do a short sale - there are specific requirements, including demonstrating hardship. If you are in a hardship situation, I recommend connecting with a Realtor who has short sale expertise, and talking with your lender.
2 votes Thank Flag Link Mon Jul 21, 2008
In real estate, a short sale is when a bank or mortgage lender agrees to discount a balance due to an economic hardship on the part of the mortgagor. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower's financial situation.

A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure on their credit history. Additionally, a short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount.

Call http://www.ShortSaleSettlements.com/_statelist.asp at 1-888-504-6572 for free advice on short sale procedure. Then find a realtor in your area using the ShortSaleSettlements.com Realtor Directory.
1 vote Thank Flag Link Tue Jul 22, 2008
Hi C,

Deal with the other home you own first. The prices on the coast aren't going anywhere any time soon. We are back to the "new normal" market. I don't believe these prices are going anywhere any time soon. Position yourself to buy after your home in Valley is dealt with.

Web Reference: http://MintProperties.net
0 votes Thank Flag Link Sat Oct 30, 2010
Hi C,

Yes, when you sell a home for less than what is owed on the loan balance and you ask the lender to forgive the remaining balance, you are "short selling" the home. Many people in Santa Maria and Orcutt are in this situation as home prices during the boom were on average at least $200,000 above what they are today. Keep in mind that pending federal legislation may help you refinance at today's values and stay in your home. So, if your goal is to keep your home, you may want to sit tight and see what the Feds come up with. If you have to sell NOW, because of divorce, job transfer, etc., a short sale may be an option for you. Keep in mind that short sales do take additional time because you are asking the lender to forgive the loan balance and that request takes time to process. I would estimate a minimum of 90 days. I've written a recent article about short selling in the Santa Maria and Orcutt market on my blog:


If you need help analyzing your situation, feel free to give me a call.

Tni LeBlanc, JD, MA, e-PRO
Mint Properties
0 votes Thank Flag Link Wed Jul 30, 2008
We are not behind on our mortgage, we just bought at the wrong time. 1 1/2 years ago when we purchased the market wasn't this bad. We could not afford to buy a home on the coast at that time, so we moved to the valley and bought a house. We intended to keep the house for only 2-3 years and then sell, take our equity and move to the coast. Best laid plans. Now we are stuck with a mortgage here in the Valley when houses are finally affordable on the coast. Our families are both on the coast and we want to move back there. We are afraid if we wait until the market bounces back to sell our current home, we will likely only break even. Meanwhile, houses on the coast will likely have bounced back faster than valley houses and we will be priced out of the coastal market once again. Any advice?
- C
0 votes Thank Flag Link Tue Jul 22, 2008
If the bank will agree to it, it would be a short sale. You owe more than the property is worth.
Web Reference: http://GetPrequalified.com
0 votes Thank Flag Link Mon Jul 21, 2008
Hi C,

To add to what Susan stated regarding short sales, the best thing you can do is contact your lender if you have fallen behind. See if thy are open to a short sale for your home should you bring them an acceptable offer. Then contact me, a short sale Realtor that works in Santa Maria. I've recently gotten two short sales approved within the last 2 weeks to help out the borrowers and the lender. I also got an offer for both of those homes within the forst week they went on the market because they were marketed very well. Call me directly if you decide to do a short sale on your home.
0 votes Thank Flag Link Mon Jul 21, 2008

Any time you sell your home for less than what you currently owe, it is considered a short sale. If you are looking to sell you home you will want to find someone to help you who is familiar with the short sale process.

Good Luck!

Lisa Cartolano
Alain Pinel Realtors
0 votes Thank Flag Link Mon Jul 21, 2008
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