Why Over 40% of California Short Sales Fail to Close
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According to a March 8, 2011 news release from the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.), fewer than 60% of short sales begun in California during 2010 actually made it to closing.
That news came as a result of a Short Sale Lender Satisfaction Survey conducted in December 2010, and answered by 2,150 California REALTORS®. Of those responding, 94% said that they had participated in at least one short sale transaction in 2010.
Although there has been no follow-up survey to give us statistics for 2011, we do know that new laws passed in 2011 have made it even more difficult to bring a short sale to closing. Under those new laws, second lien holders can only seek deficiency judgments after foreclosure. A short sale removes their opportunity to recover more than a small percentage of funds lent on second mortgages and home equity lines of credit. Thus, many second lien holders are reluctant to approve short sales.
As a result, it is more important than ever to seek help from an experienced and skilled California short sale negotiator.
The 2010 survey revealed overall dissatisfaction with lenders and loan servicers. And of course, that hasn’t changed. Some REALTORS® reported delays of more than 6 months in getting a written answer to a short sale request. Most reported a response time of just over 2 months. Nearly half of the REALTORS® responding said that lenders took more than five business days to respond to any form of communication, including telephone and email messages.
This should not be surprising, given that many agents work on only a few short sales per year and simply don’t have the experience necessary to deal with the banks.
REALTORS® who hope to succeed in handling short sales should learn all they can about each lender’s preferred procedures and then follow them to the letter. Submitting a short sale request in the manner that each bank prefers will help keep your request at the top of the pile. Mistakes will send it to the bottom.
As successful short sale specialists, we’ve also learned that it’s vital to develop working relationships with loan servicers in each bank. Because we’ve made the effort to develop these relationships, we can generally count on a response to our emails or phone calls within 48 hours.
The HaroDunlap Team has handled hundreds of short sales for San Diego County homeowners over the past 6 years, and with good results. In fact, we’ve maintained a 98% success rate, even when dealing with banks that many consider the most difficult.
Success comes as the result of sound preparation and presentation, combined with persistence and strong negotiating skills.
If you’re underwater on a home in Carlsbad, Coronado, La Jolla, Rancho Bernardo, North County, Del Mar, Mission Hills, Kensington, Metro San Diego, or downtown San Diego, you may be wondering: Should I short sale or shouldn’t I? Click here to get advice from Tom Dunlap – San Diego’s top short sale specialist.
Tom will be happy to explain the entire short sale process, show you the steps that lead us to success when others fail, and answer any questions you might have.
Note: If you’ve been involved in a failed short sale and are running out of time, click here to learn about the “Cash Short Sale Express.”
You can also reach the HaroDunlap Team by writing email@example.com or by calling 619-325-4170.
Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.
This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.