What is a short sale or short pay? If you are thinking of buying a home in 2009 you are probably asking yourself this question. In simplest terms; it’s a home being sold by a seller for less than what that person owes to the bank, thus shorting what is owed to the bank. A good example is when a person owes $600,000 to their bank and puts their house on the market, then asks the bank to accept a lower amount than the $600,000, like $300,000. Once the bank receives the offer from a new buyer for the $300,000 then the bank sends out an appraiser to make sure that the property is in fact valued at $300,000 or close to it. As of late banks have been accepting short sales much more than they were earlier in the year.
In the Conejo Valley; Thousand Oaks, Newbury Park, & Westlake Village, CA our team has seen an increase in sales of short sales and a reduced amount of REO’s (Real Estate Owned). The process of a short sale is still taking from about 2 months to 6 months on average. Obviously we have seen short sales that have gone for over a year without closing and it always surprises me that the bank doesn’t foreclosed on these, but it happens. Please note that the name short sale has nothing to do with the time it takes to close these deals, they are anything, but short.
If you are thinking of buying a short sale it is important to note that the banks will most likely sell the property in “as is” condition and will not fix any items of the home. If you want to search for short pays in Southern California click here. For any other questions about short sales feel free to email me or comment below.
Tristan Ahumada
Tristan and Associates 