Costa Mesa, CA – Seller Short Sale Success Story: This article is a case study for a short sale that our team conducted on a detached home located in Costa Mesa, California. Certain details about this property will not be revealed to protect the privacy of the previous home owner. This single story detached home was 3 bedroom, 2 bath, 1640 square foot home, with 2 car garage, and was built about 60 years.
This ranch style home was bought many years ago, but was refinanced in the Summer of 2004′ for a loan amount of $680,000. Then a 2nd mortgage HELOC loan was also obtained in the Winter of 2005″ for an amount of $140,000. At the peak of the market in mid 2006′, this home had appraised for, and was worth about $875,000. In the past 3 years though, prices have dropped about 35% in Orange county in in most of Costa Mesa.
The homeowner had a severe medical problem and was not able to work full time. They inquired about a loan Modification, but their Debt to Income ratio was to high to qualify for a Lona Mod, given the decrease in income. Also, due to this financial hardship the home owner was having difficulty keeping up with their mortgage payments. They went on the Internet and found us and contacted us inquiring about a Short Sale. The Short Sale process is broken down into 3 Phases as follows:
PHASE A: The Costa Mesa property was first put in our Short Sale Preparation Phase. To start, our team obtains all of the required documents from the homeowner and contact the banks to present our short sale case. Then, our negotiations personnel begins the process of negotiating the preliminary terms, price and conditions of the short sale. Our expert team was able to obtain preliminary approval for the Short Sale from both the 1st and 2nd mortgage banks. This Preparation Phase took about 6 weeks to complete. During that time the home owner lived in the property as usual, and was not bothered by any collection firms, other agents or prospective home buyers. And, due to their hardship, were forced to stop making their mortgage payments and lived rent free.
PHASE B: At this stage, we started the Short Sale Marketing and Sales Phase. Our team markets the property for sale in the Multiple Listing Service (MLS) for a price of at a price of $715,000. After a period of about 3 weeks, we did not receive much interest, so we dropped the price to $675,000. Within 2 weeks later, we received an offer a solid buyer for $620,000. After several days of back and forth negotiations, headed up by our short sale Realtor Nick Roshdieh, we obtained a purchase price of $645,000.
PHASE C: This final Phase of this Short Sale process is primarily the escrow closing and final bank negotiations stage. Here we first gather the signed offer from the Buyer, and package the purchase offer, along with required Short Sale disclosures and Buyers loan qualification paperwork. We submit this updated package to the 1st and 2nd mortgage banks, to conduct the final short sale adjustments of the terms, conditions and costs. After some difficult negotiations utilizing our associate attorney, we got Mortgage Banks to agree to this modified short sale offer. Once we received the bank short sale approval letters, we moved forward with the buyers closing through escrow. The last Phase took about 43 days to complete.
When all was said and done, the entire debt on the home was removed from the back of the home owner. Due to their financial hardship, the home owner was able to live in their property 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 badly 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 buy a home again in the near future. Finally, we were able to convince the 2nd Mortgage HELOC loan to not come after the home owner for unpaid debt, and accept a complete satisfaction of debt for the $10,000 that we were able to negotiate for them. If the homeowner had let this home got to Foreclosure, then the HELOC would have had a legal right to try to come after the property owner for satisfaction of the unpaid debt.
ShortSaleASAP is licensed with the California Department of Real Estate, and we are a Member in Good Standing with the Orange County Board of Realtors. 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
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