This is another successful Short Sale case study for a detached home located in Dana Point, Ca. The details of the homeowners name, address, and exact financial details will be masked to protect the privacy of the homeowner.
This property was sold and closed escrow in March of 2009, via a Short Sale by the OC Short Sale Team. This single family detached home was 4 bedroom, 3 bath, 2,600 square foot home, with 3 car garage.
This roomy house was purchased in August of 2005′, for $975,000 with a 20% down loan with Wells Fargo. 9 Months later the homeowner obtain a equity line of credit (HELOC) loan for $200,000 in 2nd position. The first mortgage was about $780,000 and the total loan debt after the HELOC loan was $980,000. The home went up in value about 5% from the time it was purchased until about springtime in 2006′ and then prices began to decline from there.
Since the peak in the local market in April of 2006′ prices have been dropping about 12% per year for the past 3 years. This drop applies to most of Orange County, but has not as severe in Dana Point. This featured short sale property has declined in value about 27% from the time it was purchased. The homeowner had a financial hardship and a medical sikness in the family, and they were not able to keep up with their mortgage payments.
The first step in our short sale process for this Dana Point property, was to gather all of the required documents from the homeowner. We then packaged these documents and sent them to the banks to present our short sale case. After some tough negotiations, our short sale specialists were able to obtain preliminary approval for the Short Sale. During this short sale preparation period, the homeowner was able to live in the property as normal, with no interruptions from other agents or prospective home buyers. Due to their financial hardship, the family was living in the home without making mortgage payments.
After the preliminary bank approval, the Short Sale marketing and sales effort began. We advertised the property for sale extensively on the Internet and in the Multiple Listing Service (MLS) for a price of at a price of $789,000. After about 3 weeks with no offer, we dropped the price to $749,000. Then again 3 weeks later we lowered the price to $729,000 and received an offer 6 days later. After two counter offers, we negotiated a price between the buyer and seller for $725,000.
This final step was to set up the short sale for escrow closing. After we obtained the signed offer from the Buyer, we packaged the purchase offer, along with required Short Sale disclosures and Buyers loan qualification paperwork. We rushed this information to the banks, and negotiated the final short sale adjustments of the terms, conditions and costs. After some tough discussions with our expert short sale Realtor team, we received the bank short sale approval letters. We then moved forward with the buyers closing through escrow. The last step was accomplished in about 32 days.
After the short sale was completed and the escrow closed, the entire mortgage debt was retired and the homeowner was forgiven from the debt of the HELOC loan. If the home had gone to foreclosure, the $200,00 HELOC loan would have not be retired, and they could have gone after the homeowner for collection. In addition, the homeowners credit was not as badly damaged as it would have been if the banks had foreclosed. They are planning on working with our associate premiere credit rehabilitation firm, so that they may buy another home within a year or less.
The OC Short Sale Team is licensed real esate Broker with the California Department of Real Estate, that specializes in short sales. 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
