Long Beach Short Sale Case Study #26: The ShortSalesASAP team of experts have closed another short sale in Long Beach CA. We close over 95% of our Short Sales, but unfortunately, only about 20% of short sales close statewide. We will outline this short sale process, but withhold some of the financial and property details to respect the privacy of the short seller.
The subject property was a single story, ranch style family detached home located in the Los Altos community of Long Beach. The home was a 3 bedroom, 1 bath, 1,200 square feet, built in 1956.
This home was purchased in the Spring of 2006′ for $575,000. The financing consisted of a 10% down payment, with a $460,000 1st mortgage with Wells Fargo, with a $57,500 2nd mortgage with Citbank. This is commonly called a 10/10/90 loan, in the which the 1st loan was a fixed rate loan, and the 2nd was an adjustable rate mortgage.
The local market conditions in southern California and Long Beach has suffered a severe market correction. Property values have dropped about 40% since the height of the market in Spring of 2006′. Southern California, has been hit hard by the nationwide mortgage loan crisis and regional recession. Due to this factors, one of the spouses lost their job, and the other had their bonuses curtailed. This big drop in income, caused the property owners to become delinquent on the mortgage payments. Their debt to income ratio was to low to qualify for a loan modification. The property owners contacted us regarding a short sale in the Fall of 2008′.
Our short sale Realtor met with the owners and gathered the necessary short sale documents that the Banks require. Our team packages this information in the format that the Banks require, along with other market data and presented the short sale case to the Banks. After some expert negotiations with the 1st and 2nd mortgage holders, we negotiated preliminary terms and conditions for the short sale.
With the Short Sale preliminary approved, we started the Marketing of this Long Beach home for sale. The house was listed for sale for $365,000, which was the market value at that time. After a period of about 22 days, we obtained a purchase offer from a qualified buyer for $350,000. After one counter offer, the buyer and seller agreed upon a price of $359,000.
Our listing Realtor obtained all signatures, and reviewed loan qual status of the buyer. Escrow was opened, and our short sale team packaged the new purchase offer, along with Buyers loan qualification paperwork, and submitted the package to the 1st and 2nd mortgage banks. Our negotiation specialist persuaded both the 1st lender and 2nd lender to agree to the short sale offer.
At close of escrow, the entire $517,500 in total 1st and 2nd mortgage debts were retired. In addition, our expert negotiator was able to obtain a $2,500 cash rebate for the home seller, paid by the the 1st mortgage bank, which is referred to as “Cash for Cooperation”. The seller rented a similar Long Beach home and saving over $1,200 per month. In addition, the homeowner is now working with our credit Restoration affiliate firm and will be able to buy another home early next year.
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
Short Sale Information,