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How is a Palo Alto Short Sale Different From a Regular Sale?

How is a Palo Alto Short Sale Different From a Regular Sale


A short sale is not the same as a regular sale and the differences are very significant. It is not a simple process and if you are buying or selling a short sale you should be working with an agent who knows what her or she is doing.


In a short sale the seller owes more on the home than it is worth. The seller needs to ask the lien holders if they will accept less than the amount owed to them.  There can be one or more lenders, and there can also be liens from other places, tax liens, personal loan liens, etc.  Every lien holder has to agree to agree to take less, and the first lien holder gets to say how much they are willing to give to the other lien holders. If everyone can come to an agreement then the sale can proceed.


Certain rules apply:


1.     The house is sold “As Is”

2.     Disclosures are the same as in a regular sale.

3.     The water heater needs to be strapped and smoke detectors are required.

4.     The home goes on the market and one or more people can make offers on the property.  The seller accepts one offer, and that offer is sent to the first lien holder for approval.  All other offers and any subsequent offers can be back up offers, but they are not supposed to be sent to the bank unless the accepted offer drops out.

5.     The buyer must include a proof of funds for the down payment, a pre-approval letter, and if the first lien holder requests it, their social security number.  They must not have any relationship to the seller.

6.     The first lien holder will look at the seller’s financial information and the strength of the buyer’s offer and determine if they will accept, reject, or counter the offer.  They also determine how much money they are willing to give to any other lien holders to settle the debt. This can take anywhere from a few weeks to a few months.

7.     Once the first lien holder has made a decision they put it in writing and the seller and buyer have to accept the terms of what the first lien holder is offering.  If everyone agrees and there are no other liens then the sale can proceed.

8.     The buyer has their contingency period, gets a loan, and closes escrows.

9.     If there are other liens the same process occurs for those loans.


If you have any questions about buying or selling a home in a short sale please feel free to contact me.


Marcy Moyer

Keller Williams Realty


D.R.E.  01191194

Federal Government Disclaimer (MARS): 1. You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us commission as agreed to in listing contract for our services.
2. Marcy Moyer of Keller Williams Realty is not associated with the government, and our service is not approved by the government or your lender; and 
3. Even if you accept this offer and use our service, your lender may not agree to change your loan.


Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales

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