California Short Sales
With the current real estate market, you can’t avoid the home search process without finding California Short Sales. Due to the poor economy and rapid decline in home prices over the last few years, there are huge numbers of short sale homes in California.
Nearly all Short Sale homes for sale in California are found on the MLS. People trying to sell short usually need to sell quickly, and need the help of a competent real estate agent who knows how to handle California short sales. Click the link below to search California Short Sales on the MLS.
What is a Short Sale?
A short sale is simply a property where the home is underwater and the homeowner owes more than the property is worth. Short sales typically occur among distressed properties where borrowers are behind on their mortgage payments.
Because banks do not want foreclosures, they are willing to accept less than what is actually owed in order to avoid the foreclosure. Foreclosures are very costly for banks. They involve legal fees, time, and in the end they must still sell a property that they don’t even want. It is the lenders best interest to allow a short sell rather than let a distressed borrower foreclose.
In some cases short sales happen even when the borrower is not behind on their mortgage payments. These cases usually occur when a borrower has more than one loan. The second loan is in second position, and if a foreclosure were to happen would likely get nothing. These second loans will often convert the loan from one secured by real estate to a personal loan in order for the borrower to be able to sell their property. In these cases, the California borrowers are not forgiven of their debt, but actually still must repay it.
How do I buy California Short Sale Homes
Buying short sale homes is really not much different than purchasing other California Homes. The main difference is that it requires a lot more patience, uncertainty, and waiting.
When an offer is made on a California Short Sale property it not only needs to be accepted by the seller, but also by all of the mortgage lien holders. The bank approval on short sales can take months. When priced low, these properties typically get several offers, but by the time the bank finally gets to the file none of the parties are still interested in the properties.
Short sales in California are often priced low for a couple of reasons:
1. The seller isn’t going to get anything out of the house, and so they don’t really care about getting the best purchase price possible.
2. In order to get banks to start looking at the short sale file, there usually needs to be an offer. For this reason listing agents often price the homes really low to get the ball rolling. To get at least some offer in on the property so they can get someone assigned to their short sale file.
For this reason, purchasing short sale homes in California can be a good way to get an undervalued home. However, there is definitely a cost involved with buying California Short Sales in time and frustration.
It is usually not a good idea to try and purchase a short sale home if you have a timetable of when you need to buy as the banks get to things at their own leisure. They generally have no respect for deadlines or what the real estate purchase contract says.
What Kind of Homes are Short Sales?
Short Sales in California can be any type of home. They can be singe family homes, ramblers, bungalows, townhouses, condos, lofts, condominiums, duplexes, or homes with second kitchens. They are found among starter homes as well as luxury homes for sale. California Short Sales are found in the ghetto’s as well as in gated communities and really nice areas. The type or size of the home isn’t what matters. What matters is that the people owe more on the home than it is now worth. Most short sales for sell in California are of homes that were purchased, or refinanced, during the housing boom between 2003 and 2007. It is these properties that are most likely to have mortgage liens greater than the market value they can sell for.
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