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Orange County CA Short Sale market update

by vbindi on March 30, 2010

This is another of the Short Sale market updates for residentail real estate market here in Orange County, CA. This report is brought to by the professionals at Short Sales ASAP, for real estate that is Active for sale, pending in Escrow, and Sold in the past 90 days, for all residential properties as compared to short sales. Currently there are 5,635 detached homes active for sale, and 1,246 short sale properties active for sale. The ratio of Short Sales to the Total is 22.1% .

There are now a Total of 3,260 attached condos listed for sale, and 1,119 of these active listings are short sales. This represents a ratio of Short Sales to Total condo listings of 34.3% .

Currently there are a grand total of 3,981 detached homes under contract in Escrow in Orange County. Of this total, 2,177 are short sales, which represents a ratio of 54.7% for Orange County .

In addtion, there is now a Total of 3,185 condominiums currently pending in Escrow, and 2,084 short sales in escrow, for a ratio of short sales to the grand Total of 65.4% .

In Orange County in the past 90 days, there have been a total of 3,497 detached homes that have Sold and closed escrow. Of this amount, 809 were Short Sales sold, which yields a ratio of Short Sales to the Total of 23.1% .

Lastley, for attached condos that have sold in the past 3 months, there have been 2,464 units that have closed. Of this Total, 776 were closed Short Sale condos, which represents 31.5% of the total.

There are some interesting observations to make, First, notice the large increase in the Ratio of Short Sales to Total when you compare Active for Sale to Pending in Escrow. This is due to the fact that most Short Sales are bargain priced and many home buyrs today are seeking value. But the next observation is even more interesting. Notice how the ratio of Short Sales to the  Total, decreases substantially when comparing Pending in Escrow to Sold in the past 90 days. This shows the high failure rate of Short Sale transactions. In the past 90 days, approximately 58% of detached Short Sale Transactions failed, and 52% Short Sale condo transactions failed to close.

The cause of this high rate of failure is many neighborhood Real Estate Agents do not have the experience to close short sales consistently. The Short Sales ASAP group are Orange County Short Sale specialists and have a closing succes rate of over 95%. For more information or questions about Short Sales, feel free to call us at: (949) 254-4774, or email us at: Info@ShortSalesASAP.com

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Lake Forest CA Short Sale – Agent Success Story #19

by vbindi on April 15, 2009

Lake Forest CA Short Sale Success Story – Case Study #19: The team of experts at ShortSalesASAP, closed another short sale listing in Lake Forest, CA, which will be outlined here as Case Study #19.   We always eliminate certain details, and give approximate dates and dollar amounts in order to protect the privacy of the previous homeowner.  This particular short sale was a 2 bedroom, 1 bath condominium, with 835 square feet of living are, and built in the early 1980’s.

The condo was originally purchase by our client in July of 2005′, for a purchase price of approximately $387,000.  This top floor condo was acquired by the homeowner using a 5%  down – 5/15/80 purchase money loan. The 1st mortgage loan balance was approximately $308,000 and the 2nd mortgage had a loan balance of around $58,000.  Both loans were with Countrywide mortgage and the 1st mortgage was a fixed rate loan, and the 2nd loan was an adjustable rate mortgage.  The total loan balance was roughly $366,000.

Lake Forest CA property values have dropped about 36% since the height of the market in mid 2006. Southern California has been hit hard by the  nationwide mortgage loan crisis and the recession.   The short sale property featured in this article, also dropped in price substantially by about 38% to a value of $242,000, since it was purchased in mid 2005′.  This Condominium was upside down by about $125,000. The homeowners income also dropped due to the local recession, and was experiencing difficulty making their mortgage payments.   They contacted us as a result of a past client reference, to conduct a short sale.

We first gathered the required documents from the homeowner which includes; 2 months of bank statement,  a simple financial statement,   hardship letter, Pay Stubs,  and bank account balances. Our team of short sale experts review and package this information in the format that the banks request, and deliver to the banks.  After some cunning negotiations by our Realtor expert Nick Roshdieh,  we convinced the bank who carried both the 1st and 2nd mortgage, to a preliminary short sale approval.   This Preparation Phase took about 4.5 weeks to complete, and during this time, the homeowner lived in the home as usual with no interruptions to their daily lives. Due to their hardship, they were unable to make their mortgage and lived payment free for the entire duration of this short sale transaction.

With the preliminary short sale approval in hand, we started the Marketing and Sales process for this property.   This Lake Forest condo was marketed on the Multiple Listing Service, and also on the Internet but the short sale status was not displayed on any Internet advertising to the public.   The listing price was initially $263,000, which was close to the market value at that time.  After about 4 weeks on market, we obtained an offer for $235,000.   After several counter offers, our listing Realtor, Nick Roshdieh got the buyers to agree to a price of  $243,000.

Our short sale processing team, then went out to gather all of the necessary signatures from the buyer and seller,  review the loan qualification status of the buyer, and we opened escrow.  Our team then packaged the new purchase offer, along with required Short Sale disclosures and Buyers loan qualification paperwork, and submitted the package to the mortgage banks, to conduct the final short sale adjustments of the terms, conditions and costs.

After some tough negotiations with our expert short sale negotiator, and involving our attorney, we got Countrywide Mortgage to agree to this short sale offer of $243,000. With the final bank short sale approval letters in hand, we moved forward with the buyers closing through escrow. This last step was completed in about 44 days and this short sale was completed and closed escrow in the Fall of 2008′.

After the completion of the short sale, and close of escrow, the $366,000 total mortgage debt on the home was deleted. The homeowner was able to rent a comparable condo and saved about $800 per month. The homeowner was able to live in their home during this short sale process and did not make any mortgage payments. In addition, the homeowners FICO score was not as negatively effected as it would have been if the banks had foreclosed.

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

Irvine Short Sale – Case Study #63

by vbindi on March 24, 2009

SUBJECT PROPERTY: This successful short sale was completed for a single family home in Irvine, CA.   It was 4 bedroom home with 2,080 square feet of living area.  This home was sold and closed escrow  in January, 2009,  via a Short Sale by  ShortSalesASAP. This detached house was  purchased by the homeowner in February of 2002′  for $405,000.  The owner then refinanced and also obtained a Equity Line of Credit loan (HELOC) in 2nd position with a total new loan balance of approximately $650,000 in 2005′ .    The 1st Mortgage was Virtual Bank with an adjustable rate mortgage with a balance of  $508,000, and the 2nd HELOC loan was with WAMU, which was an interest only loan with a balance of about $142,000.

FINANCIAL NUMBERS: Due to the dramatic drop in real estate prices that has hit southern California, including Irvine, this home has dropped in value by more then 32% since the refinance in late 2005′.   The homeowner had a financial hardship and was having trouble keeping up with their mortgage payments, so they investigated a Loan Modification.  They could not qualify for one, for the debt to income ratio was to low.    Also, the loan modification did not address the fact that the home had loan debts and other liens that were more then $50,000 more then the home was worth. They contacted us in July of 2008′ to learn about the Short Sale option, and selected us to conduct the short sale.

PREPARATION PHASE I: This Irvine home was initially put in our Short Sale Preparation Phase.  In this phase, we gather the documents from the homeowner and contact the banks to establish and present our short sale case. This Preparation Phase took about 4 weeks to complete, and during that time the homeowner lived in the property as usual with no interruptions from other agents or prospective home buyers.

SALES AND MARKETING PHASE: The Short Sale Marketing-Sales Phase is where we placed the property on the market in the Multiple Listing Service (MLS) at a price of $625,000.  After a period of about 4 weeks, we obtained a buyer. After several counter offers,  we obtained a purchase price of $615,000.  This Phase took 4 weeks to complete.

BANK NEGOTIATIONS PHASE: The Short Sale Bank Negotiations Phase began after we obtain the signed offer from the Buyer.  Here we packaged the purchase offer from the Buyer, with required Short Sale disclosures, along with the Buyers loan qualification documents. We submit the updated package to the 1st and 2nd mortgage banks, to conduct the final short sale negotiations. After some tough negotiations  with our expert short sale Realtor team, our attorney and the bank officials, we got both the 1st and 2nd Mortgage Banks to agree to the short sale offer. Once we received the bank short sale approval letters, we moved forward with the buyers closing through escrow. The last Phase was completed in about 3 weeks.

CONCLUSION: 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. They were also able to rent a comparable home for substantially less then what their payments used to be. In addition, the homeowners credit was not as damaged as it would have been if the banks had foreclosed. They are now working with our credit restoration affiliate and their credit rating should be repaired to a level where they should be able to once again buy a home in Irvine by the end of 2009′ .

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