The prevalence of Santa Barbara short sales is a relatively new phenomenon that happened shortly after the national housing market bubble burst.
Thus, if you don't understand what a short sale is and how it works, don't worry! We've compiled a list of frequently asked questions that we often hear from Santa Barbara home sellers just like you:
A short sale occurs when a Santa Barbara home seller decides to sell their home for less than what is owed on the home. Typically Santa Barbara home sellers will choose this as a better alternative to a Santa Barbara foreclosure - which can stay on your credit report for a decade!
In both the short- and long-term, a short sale is a lot better than a foreclosure for both the seller and lender.
For the seller, it frees them from a mortgage that they can no longer pay. It also protects their credit score better than a foreclosure would.
For lenders, it saves them money because they're recouping at least some of the money they lent in the first place.
One study found that a lender will lose anywhere from $30,000 to $80,000 on every foreclosed property. Those losses are a lot smaller when they approve a short sale.
Not if you're working with an experience Santa Barbara real estate agent like us!
The key to getting a Santa Barbara short sale approved is filling out all the necessary paperwork in a timely manner and convincing the lending institution that the short sale is in the best financial interest of both them and the home seller.
It depends on the bank with whom you took out a mortgage. While some banks will make you wait until you're at least 90 days behind on payments, others will let you start the short sale process while you're still current on payments.
Check with your lending institution to see what their policy is. As a general rule, however, the sooner you get started on the short sale process the better.
We understand that the short sale process can be daunting for Santa Barbara home owners who've never completed one.
We'd like to help you navigate that process on the Santa Barbara real estate market.