What is a Short Sale?

KenGrech.com

A short sale is the sale of real estate for less than the total debt on the property. In other words, there is no equity in the property. This is also known as being “upside-down”.

Short sales typically occur when a property is highly leveraged and the market loses value quickly…like now, especially in California. A bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagor, which are most people that own highly leverage property in Southern California.

The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of proposed sales.

Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower’s financial situation.

A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing.

A short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of debt, generally on a piece of real estate, short of the full debt amount. Lenders have a department (typically called a loss mitigation department), which processes potential short sale transactions. Typically, Lenders do not accept short sale offers or request for short sales until a Notice of Default has been issued or recorded with the locality where the property is located.

But these are not typical times. Banks are now well aware that the longer they wait, the more the they stand to lose so many short sales are happening without notice of default being filed.

Lenders have to approve of any buyer’s or listing agent’s commission in advance, primary reason for non-brokered short sales with a specialist or facilitator to save on the margin. Many of these facilitators work with a private lending party for their financing, such as a partner or syndicate.

Lenders have a varying tolerance for short sales and mitigated losses. The majority of lenders have pre-determined criteria for such transactions. Other distressed lenders may allow any reasonable offer subject to a loss mitigator’s approval. “Red Tape” is very common in short sales, similar to REO and HUD properties, requiring potentially multiple levels of approvals and conditions. Junior liens, such as second mortgages, HELOC lenders, and HOA (special assessment liens), may need to approve of the short sale.

Frequent objectors to short sales include tax lieners (income, estate or corporate franchise tax-as opposed real property taxes, which have priority even unrecorded) and mechanic’s lien holders. It is possible for junior lien holders to prevent the short sale.

Short Sale your home

at No Cost to You!


Testimonials

What our Clients Say About us

Foreclosure Homes Silverlake
I believe that Ken was very professional and aggressive when it came to negotiating the deal. I have used Ken many times with the purchases or sale of my homes Ken is great at following through with every detail of the transaction. I highly refer him to anyone that wants a good realtor.
by Dan Maravilla
Condos Brentwood
Dear Ken, Chris, Peggy & Crew You are so thoughtful and kind. We are thrilled to be moving into our new home…something we didn’t see happening for quite some time. Thank you so much for jumping through hoops for us! We will be forever grateful!
by Kelly & Joseph Konopelski
Real Estate Santa Monica
We recommend Ken as he was very professional in dealing with the sale of my home that was listed with him. We were very pleased with the transaction of buying my new home with. We think the service he gave my wife and I was perfect. We would recommend him highly.
by Trenton Harrloe
Ranch and Farm Properties Westlake Village Hills
Working with Ken was extremely easy and he was very approachable when any questions or concerns were raised. He is very professional and does not waste time. When my husband and I would meet with him he would always make sure to go through all of the paperwork with us in a timely fashion (which can be tough when signing a thousand different documents). We really enjoyed working with Ken and could tell he was a very trustworthy individual.
by Claire Hastings
Condos Westlake Village Hills
For us Ken Grech is one of the best all around. He is honest, trustworthy, and very knowledgeable with property. I would never buy from any other person ever! This is our second time around with Ken and hopefully he will be their for our 3rd. Everyone knows it's always stressful selling / buying property, but with someone like Ken Grech on your side it becomes a great experience. It becomes easy when you have someone looking out for your best interest. We appreciated everything you did for us Ken.
by Alaysia Jennings
Condos Woodland Hills
Ken is an excellent realtor. He did an incredible job selling our house in 3 days during a pandemic. His attention to detail and his outstanding communication skills put him at the top. We were so impressed with his hard work and dedication that we are recommending him to all of our famjly and friends. It was a pleasure working with him. He knew we were nervous about leaving our home of 24 years and moving to a new state so he helped facilitate connecting us to a great realtor in the state we were moving to. He also researched nice areas in the new state to recommend to us. He helped us from start to finish. All of his help and guidance made the transition so easy. Working with Ken was a pleasure. He was there for us from the begining til the end. He met all of our expectations and guided us through the whole process with his expertise. It was a smooth and stress free transition because of Ken.
by Kylie Underwood
TownHomes Ventura Hills
Ken acted in a professional manner. I was very impressed with his knowledge of real estate, He read the sales data of surrounding homes perfectly, leading to my home to be sold on its first showing for higher than its listing price.
by Teresa Richard
Golf Course Homes Ventura Hills
Ken was on top of the deal all the way through. If you want an local area expert in real estate we highly recommend working with Ken. This was a very easy sell/buy experience and we are more than pleased with Ken's performance. Had it not been for his local knowledge, we likely would not have been able to purchase the beautiful Morrison Highland Estates house that we did. Ken is a true professional.
by Simon Barrett
Ranch and Farm Properties Valencia
Ken Grech did a wonderful job of making us feel we were in good hands with his leadership. I would definitely use his expertise in any further real estate transaction.
by Lauren Bradley
TownHomes Thousand Oaks
We met Ken at an open house and he seemed kind and knowledgeable. Ken was very valuable in the selection of a great neighborhood for our daughter to grow up in. All communications and documentation was very timely. Ken handled any problems that came up during the escrow period. Ken is very polite and cares for his clients and their future home. Ken made the whole process easy.
by Quincy Sampson
Rodeo Real Estate Agent
BUYING A HOME?
BUYING A HOME?

The longer your home is on the market, the less you will make. Learn what we do that nets you more.

Realtor Hollywood Hills
SELLING A HOME?
SELLING A HOME?

The longer your home is on the market, the less you will make. Learn what we do that nets you more.

Real Estate Agent Bel Air

Kenneth Grech

Real Estate Agent

Simi Valley | California

1308 Madera Rd Suite 8,
Simi Valley CA 93065
DRE#01328727

Contact Us

For all Enquiries, please Email us Using the Form Below


Compare listings

Compare