Short Sale Case Study #32 - We will describe another successful Short Sale for a detached home located in Laguna Niguel, Ca. The details of the short sale such as; property address, exact loan amounts, and names will not be revealed to protect the privacy of the previous homeowner.
Property and Finance Details: This Laguna Niguel home was a 4 bedroom, 3 bath, 3 car garage with 3,150 square feet of living area. This detached home was originally purchased in the Spring of 2004′ for $885,000 with a 10% down mortgage. In the summer of 2007′ an equity loan (HELOC) was also taken out on the home for about $245,000 with National City Mortgage. This property was sold via a Short Sale in the winter time of 2009′ by the ShortSalesASAP team.
Market Condition: Home prices have dropped dramatically in southern California due to the severe recession and nationwide financial crisis. More specifically, prices have been dropping about 1% per month for the past 2.5 years in Laguna Niguel, although there are now signs that prices may be leveling off. The homeowner experienced a financial hardship and was no longer able to keep current on the mortgage loan payments. They inquired into a Loan Modification, but even in the most optimistic scenario, they still would have been about $300,000 upside down on their home mortgage.
Preparation Stage: After we signed the listing agreement with the homeowner, we gathered all of the required documents from the homeowner. After review and packaging, we delivered these documents to the 1st and 2nd banks to present our short sale case. After some tricky and difficult negotiations, our expert team was able to obtain preliminary approval for the Short Sale with tentative terms and conditions. During this preliminary short sale approval phase, the homeowner was able to live in the property as normal. There were no interruptions from other agents or prospective home buyers, and due to their hardship, they were living rent free. This Preparation Phase took about 6 weeks to complete.
Sales and marketing Stage: Once the short sale was tentatively approved, we placed this Laguna Niguel property on the market for sale. It was listed in the Multiple Listing Service (MLS) for a price of at a price of $825,000. After a period of about 3 weeks with no offers, we dropped the price to $789,000. A week later we received an offer from a loan qualified buyer for $735,000. After several days of counter negotiations, we obtained a purchase price of approximately $750,000.
Closing Stage: In the final stage of this short sale process, we obtained the signed offer from the Buyer, and gathered the other required Short Sale disclosures and Buyers loan qualification paperwork. We submitted this package to the 1st and 2nd mortgage banks, to conduct the final short sale adjustments of the terms, conditions and costs. After some tough negotiations with our specialists obtained the updated short sale approval letter from the 1st and 2nd Mortgage Banks. Once we received these bank approval letters, we moved forward with the closing of escrow. The last Phase was completed in about 21 days.
The result was that the entire debt on the home was removed from the homeowner. The homeowner was able to live in their home during this short sale process and did not make any mortgage payments payments. Most importantly, if this home were to been lost in Foreclosure, the 2nd Mortgage HELOC loan would still be owed by the homeowner after the 1st mortgage lender foreclosed. As a result of this short sale though, the convinced to the 2nd Mortgage Bank to accept to small pay-off we generated for them as a settlement in full. The homeowner is now working with our credit restoration affiliate and their credit rating should be repaired to a level where they should be able to buy again home by 2010′ .
ShortSaleASAP is licensed with the California Department of Real Estate, and our services are free to the homeowner, for we are paid by the mortgage bank(s). If you have any questions regarding Short Sales, contact our team of experts at: (949) 388-3396 or drop us an email at: Info@ShortSalesASAP.com
