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Santa Cruz County Short Sale Specialist

by Patti Lyles

Santa Cruz County Short Sale Specialist

Short Sale Specialist in Santa Cruz County

What is a real estate short sale in Santa Cruz County?

A quick sale in real estate, also commonly called a short sale, happens when a lender is willing to accept a lower pay off on a loan than what is currently owed due to the borrowers inability to continue making payments.

What does it take to qualify for a Santa Cruz County Short sale?

Short Sale Specialist Realtor in Santa Cruz CountyWhile lenders seem to be easier to work with lately regarding qualifications, there are usually three borrower qualifications that most lenders require for a Santa Cruz County short sale.

  1. Negative Equity - The proceeds from the sale of the property, after all closing costs
    are paid, are less than the amount currently owed on the property,
  2. Financial Insolvency - Financial insolvency means that the borrower has no other assets that could cover the deficiency (the difference between what is owed on the property and the proceeds from the sale)
  3. Financial hardship - Financial hardships that are acceptable do vary some from lender to lender, but the most common ones are; divorce or legal separation, loss of employment or reduction in income, job transfer or relocation, incarceration, medical emergencies or major medical expenses, death of a family member, vacant rental properties, damaged property, just to name a few. Most lenders believe that a short sale is not for home owners who simply want to sell, but for those who have to sell.

Is it possible for me to get money back for completing a short sale?

Until recent times, it was almost unheard of for a home owner to get money back in a short sale. Things have changed for the better. The HAFA program, backed by the US Government, allows homeowners $3,000 to use towards relocation expenses. In addition, some lenders will offer generous incentives of their own in addition to money offered through the HAFA program. We have seen home owners get as much as $35,000 back to complete a short sale.

Who will pay the Santa Cruz County short sale Realtors® commission?

In a short sale it is customary for a lender to cover all fees associated with the sale of the property, including your Santa Cruz County short sale specialist as well. In almost all cases, a home owner in hardship will pay no out of pocket expense to complete a short sale transaction.

How Can a Santa Cruz County short sale specialist help me?

As a Santa Cruz County short sale specialist, I have helped many home owners who are in a Short Sale Realtordifficult financial season get a fresh start with a short sale. Short sales are not part of our "basic training" as real estate agents, and are something that should only be left to those of us who are especially qualified and experienced. Experience is everything when it comes. I'll not only market your home in the traditional manor, but will guide you through this transition while simultaneously processing the short sale with your lender. Visit my website for more information on the short sale process.


Patti Lyles

License Number: 01385517

Century 21


~ Your Santa Cruz County Short Sale Specialist Realtor® ~


Buying a short-sale property comes with risk

by Patti Lyles
 In this deal, ball is in lender's court

By Dian Hymer

In the recent past, the inventory of homes for sale was pitifully low. Now, the number of homes for sale has increased in many areas. However, there are listings being offered for sale on less-than-advantageous terms. An example is the so-called "short sale."

In a conventional home sale, the buyer usually needs only the seller's acceptance in order to go forward with a transaction. However, in a short sale, the lender's approval is also needed in order for the sale to close.

A short sale occurs when a property sells for a price that is insufficient to pay back the loans secured against it and the seller's closing costs. In such a case, the sellers either have to come up with enough cash to cover the shortfall, or their lender(s) must agree to forgive the amount that the sellers are short in order for the sale to go through.

Short sales have not been a big part of the home sale market since the recession of the early 1990s. At that time, home prices dropped as much as 20 percent in some markets. Some sellers who purchased just before the recession with little cash down were unable to sell for a high-enough price to pay back the amount they owed.

A low cash down payment at that time was typically 10 percent of the purchase price. During the past couple of years, many high-income, low-cash-down home buyers used no-cash-down, interest-only mortgages to complete their purchase. If such a buyer is transferred a year later, loses his job or gets divorced and has to sell, a short-sale situation could occur, even if home prices haven't declined.

Here's why. A buyer who makes no down payment has no equity in the property. With an interest-only loan, the amount borrowed isn't reduced during the first years of the loan unless the borrower makes additional principal pay-downs.

If the mortgage is a pay-option variety that permits the borrower to pay less than an interest-only payment, the principal or amount borrowed could actually increase rather than decrease with each monthly mortgage payment. Couple that with scant home-price appreciation and a seller could come up short even if he sold for the amount he paid, once closing costs such as the brokerage commission and transfer taxes are taken into account.

HOUSE HUNTING TIP: Beware of sellers in short-sale situations who list their properties at below-market prices in order to entice buyers into making offers. Before getting serious, find out the amount of the loans that must be paid off to close the sale. If the loan amounts total more than the sellers' asking price, then you will either need to pay more, or the seller's lenders will need to agree to accept less than they're owed. That is, unless the sellers have savings to contribute to the sale.

Buyers who want to go ahead with a purchase that is subject to the lender's approval should be prepared for a longer-than-typical closing. Usually, the lender won't even take a short sale under consideration until the sellers have accepted an offer. It can then take three or four months before you'll know whether or not the lender will approve the sale.

THE CLOSING: Be sure to include a provision in the contract that allows you to withdraw at any time up until the lender approves the sale. This way you can get out of the contract without penalty if it looks like the transaction has little chance of closing.

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Contact Information

Photo of Patti Lyles Real Estate
Patti Lyles
Century 21 Showcase, REALTORS
P.O. Box 67275
Scotts Valley CA 95067

DRE #01385517