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The California Short Sale Process

The California short sale process is similar to other real estate sales in many respects, yet very different in many others. The biggest difference between a California short sale and other types of real estate sales is that the lender must be willing to accept less for the home than what is owed. This condition substantially changes the transaction’s requirements.

To help you get a better understanding of what occurs during a short sale, let’s take a step-by-step look at the California short sale process:

  1. The property owner must prove to the lender there is a hardship that prevents him/her from making the monthly payments. The lender will require a hardship letter from the homeowner outlining the reasons the property owner wants to sell. The lender can approve or deny the request for short sale.
  2. The property is listed for sale. 
  3. Any offers are submitted to the lender for approval. 
  4. The lender will usually hire a local appraiser or a real estate agent to perform an appraisal to provide a Broker Price Opinion (BPO). The lender will use this information to determine if the sale price offer is reasonable. 
  5. The lender may approve the offer, counter it or reject it. 

Though the California short sale process sounds somewhat simple, it’s actually fraught with obstacles. In fact, only a small percentage (about 15%) of California short sales managed by real estate agents are successful. Here’s why:

  • To ensure a successful short sale, the selling agent must have the resources to follow-up with the lender on a regular basis to keep the California short sale process moving along. However, most real estate agents would prefer to list and sell properties rather than negotiate short sales.
  • Real estate agents with little experience selling short sales often list the home at a price too high to attract buyers.
  • Real estate agents submit the highest and best offer, painting themselves in a corner so to speak.  Because the lender is losing money, they will often make a counter-offer, leaving no financial "wiggle room" room for the agent and buyer.
  • Most buyers in this economy demand steep discounts on their real estate purchases – prices that the lender will not accept in a short sale unless the evidence is presented correctly to them! 
  • Due to the time and effort it takes to complete the California short sale process, most buyers are not interested in purchasing short sale properties.
  • When buyers are in the middle of the California short sale process, they often become highly frustrated by the amount of time it takes to complete the transaction. Quite often, buyers cancel the transaction in the middle of the process out of sheer frustration.

Though it may seem that a favorable outcome with a California short sale is impossible, it’s not. Working with a talented California short sale negotiation team, like Proper-T-Solutions, will greatly improve the short sale approval rate.

How does a short sale negotiation team improve the odds that your short sale will be successful? Here are just a few ways that a negotiation team brings value to the California short sale process:

  • These specialists often have investors willing to submit immediate offers to help homeowners avoid or prevent foreclosure.
  • Short sale negotiators understand the California short sale process and how to market properties to determine their true value in any market, including those that are weak and declining.
  • Short sale negotiators know how to influence the lender so they will approve the short sale.
  • Short sale negotiators understand how to lessen the tax and credit rating implications of a short sale. They’re also skilled at helping the seller avoid deficiency judgments.

Are you interested in learning more about the California short sale process and how a short sale negotiation team can help you? Contact Proper-T-Solutions today!