What is a Short Sale? – Costa Mesa Short Sale FAQs
Five years ago, the term short sale was unknown to most homeowners and even to many real estate agents that is because homes had been appreciating rather than depreciating for a decade or more and even back in the 1990’s, the decreases weren’t as drastic nor as long lasting.
Enough history, the question is what is a short sale?
A short sale occurs when a homeowner needs to sell their home, and they owe more on their Costa Mesa home than it is worth.
For instance, your Costa Mesa home might have been worth $650,000 in 2007. Today, it might be worth $425,000. If you had purchased the home with 100% financing, you might be almost $225,000 upside down in your home.
After you sell your home you will be “short” more than $225,000 (after closing costs) to pay the bank back the money loaned on your Costa Mesa home. This is where the term short sale comes from.
A few years ago, some people mistakenly thought that the term short sale meant that it should take a short time to sell the home, but many have been disabused of that notion.
So, basically a short sale simply means that due to a decline in real estate values, the value of your Costa Mesa home has fallen below the balance you owe to the bank plus the costs of selling your home such as commissions, title, escrow, etc., and you are requesting that the bank accept less than the full balance of the loan upon the sale of your Costa Mesa house.
If you are behind on your mortgage payments or believe that you soon will be, or you are concerned about losing your Costa Mesa home to foreclosure and would like to know your options, please contact Christine Donovan at 714-319-9751 for a free consultation.