If you’re a Southern California homeowner, struggling with your mortgage and considering a short sale, here’s what you need to know in advance! Take a look at the video and read below to learn more! Questions? Contact Certified Distressed Property Expert, Matt Gregory at 661-713-4799.

Not all short sales are successful!

It doesn’t matter what real estate professional you speak to, no one can promise 100% short sale success. If they do, we advise you to run like heck the opposite direction. Remember the old adage, “if it sounds too good to be true, it probably is!” We’re not trying to discourage anyone from a short sale, but as responsible Santa Clarita real estate agents and short sale experts, we must also be honest and realistic. Now that we have that fact out of the way, let’s discuss the factors that will determine the success or failure of your short sale.  

Primary Contributing Factors

It’s difficult to determine exactly which factors have the most impact on the success or failure of a short sale. The most important advice we can give is, start the short sale process as soon as possible. The sooner the better! The longer you wait the less chance for success! The factor which we have the least amount of control, but has killed many short sales is the BPO or, Broker Price Opinion. The lender sends someone to the property to do their own valuation and determine the present market value. Often the person doing the valuation is not familiar with the community and provides the lender with an inaccurate appraisal. It often makes absolutely no sense, and there’s not much your agent can do to convince the lender otherwise. There are some proactive steps the homeowner and agent can take, but once done, it’s up to the lender! We’ve seen short sales in our Santa Clarita Market Center fail due to an incorrect and high BPO. We’ve even seen the lender foreclose and end up losing much more money than if they would have accepted the short sale offer!

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Success / Failure Factor List

Take a look at the list below to see most of the factors that should be considered when determining the potential for your short sale success or failure. Please contact Certified Distressed Property Expert, Matt Gregory with any questions. Matt is highly trained and experienced with short sales and has helped many friends and clients avoid foreclosure and short sale their homes. Contact Matt at 661-713-4799.

• Start Early – Start the Short Sale process as soon as possible – the sooner the better!
• Hardship -The homeowner must be able to prove a true hardship exist.
• Package – The Short Sale Package must be accurate, complete, and submitted as directed by the lender. Your agent or negotiator will work with you on this.
• Real Estate Agent – it’s critical your agent is trained and experienced with short sales. Don’t let this be a factor! Solve this problem in advance by contacting Short Sale Specialist Matt Gregory! 661-713-4799. Your friendly neighborhood real estate agent may not be trained and experienced enough to handle these difficult and complex short sale transactions.
• Short Sale Negotiator – Must be trained and experienced. We advise the negotiator have training and a background in the banking or lending business. By the way, lawyers don’t always make the best negotiators!
• How many loans? One is best, but if there’s a second it can still work.
• Notice of Default – If a NOD has been filed, time is limited. Your negotiator will request an extension on the sale date and lenders will usually grant it at least once. The bottom line is this – The sooner you start the short sale process, the better your chance at success!
• Property Liens – How many and how much?
• Who is the lender? Some lenders are more cooperative that others!
• How far behind in payments and what’s the difference between what is owed on the loan and the market value of the home
• HOA – If the home is part of a HOA it’s best if the monthly HOA dues are up to date. This can be a deal killer if not! Someone is going to have to come up with the HOA money and most lenders will not pay for it!
• BPO – Broker Price Opinion – The BPO is the way most lenders determine the value of a short sale property. If the lender thinks the property is worth more than the buyer’s offer, then they will decline the offer. This is the reason for most short sale failures. Often the person doing the BPO is not familiar with the community and is inaccurate with their appraisal. Your short sale qualified agent can help prevent this, to a degree. An offer can also be re-submitted at a later date for reconsideration. It could require a 90 day waiting period.
•  QUALIFIED, LOYAL and PATIENT BUYER! – It’s not uncommon for the original buyer to back out before the lender responds to the offer. This does not necessarily kill the deal, but your agent will need to find another buyer and the entire package may have to be re-submitted. Some lenders and handling this situation a little better now, but it’s a common problem.

We hope the above information was helpful but we know there’s much more! Short sales do take time but everyone must be patient and they will usually be successful. Should you have any questions please contact Matt Gregory at the Gregory Real Estate Group. 661-713-4799 or e mail mgregory@kw.com. We’ll be happy to schedule a FREE private consultation and help determine the best solution for each specific situation.