San Diego Short Sale Process
To our Patrons & Realtor Colleagues:
Our goal, first and foremost, is to get the short sale approval as quickly and efficiently as possible. The approval process is not always a dream vacation, but our intentions are to make it as hassle free and as fast as possible.
We like to set expectations right up front. Once we get the offer and full package submitted, there is a period while the file is “in line” where time does pass with no news. If the buyer’s agent does not hear from us, we are working on the approval, we simply have nothing new to report.
Please understand since 2008, we have closed 100% of our short sales where we represented the seller. If we list and market a property as a short sale, please understand we are confident we will close the sale. Unless you are the buyer’s agent or seller, we don’t have time to waste on these labor intensive transactions so we do not field calls into the nature of:
- status of the approval
- the seller’s indebtedness or financial condition
- number and names of lien holders
- Whatever interesting facts we have to report will be relayed in the remarks section or supplemental remarks if necessary
How We Work Our Short Sales
We share all of this information and our forms with our sellers before listing their properties. While all terms are negotiable, the client did engage us with these terms and processes in mind:
- If a property is active, submit an offer. If a property is pending or contingent, it is in escrow.
- Seller will respond to all offers and will accept only one offer to be submitted into escrow for short sale review.
- Buyers will complete inspections upon seller’s acceptance rather than upon lien holder(s) approval.
- Escrow to be Heritage Escrow and buyer’s earnest money deposit is to be deposited into escrow within 3 days of acceptance from seller, not lien holder(s) approval.
- Once an approval is given by the lien holder, your client will be asked to close escrow in 30 days or less.
Making an offer on our Short Sale Properties
- Agents – for the Short Sale Addendum, it should include 90 days at Paragraph One and boxes checked at (ii) of Paragraphs Two and Three.
- Please include Addendum 1 with your offer. You can use ours (click on Addendum 1 to left) or you can input the terms at the bottom of this page into your own addendum.
- We often find that lien holders will not pay for home warranties, particularly if the buyer has separately requested closing cost assistance. If your offer includes a request for closing cost assistance, make sure that it reflects the fact that buyer will pay for the home warranty from buyer’s credit.
- Generally, lien holders will not pay for repairs arising from Wood Destroying Pest (WPA) reports. Buyers are welcome to arrange for a licensed Structural Pest Control contractor to inspect the property at their own cost and to arrange for any remedial work after close of escrow.
- Short Sale transactions are an “as-is” purchase as the lien holder is already taking a loss; it is highly unlikely that they will agree to make any repairs.
- It is looked at more favorably by the lien holders if buyers allow the seller to choose escrow, title and NHD report. Most of the offers that are accepted by our short sale sellers include this Addendum 1
Terms of Addendum 1:
- CLOSING and DEPOSIT. Closing will occur within 30 days of delivery to Buyer of short sale approval and not more than 120 days of acceptance. Buyer’s deposit will be delivered to Escrow Holder within 3 days of acceptance.
- LOAN CONTINGENCY. Buyer’s appraisal and loan contingency will be removed within 21 days of delivery to Buyer of short sale approval.
- ALLOCATION OF COSTS. With regard to costs allocated in Paragraph 4 of the Residential Purchase Agreement, Seller will pay natural hazard zone disclosure (NHD), Seller’s share of the Escrow Holder’s Fee, Owner’s Title insurance, and County Transfer Tax. Buyer will pay all else, including up to $550 in miscellaneous fees customarily allocated to the seller, i.e. pay-off delivery, sub-escrow and related fees.
- BUYER’S INVESTIGATIONS AND CONTINGENCY. Buyer will remove contingencies for all items other than loan or appraisal within 21 days of acceptance.
- JOINT ESCROW INSTRUCTIONS. To comply with contingency removal, Escrow Holder will facilitate preliminary title report and, when applicable, HOA documents. Escrow Instructions and other pre-closing documents will be furnished to the parties as Short Sale Approval approaches.
- HOA FEES UPFRONT AND CONTINGENCY. If the sale includes a property subject to an HOA, the Buyer will pay the document preparation and transfer fee. Buyer authorizes Escrow Holder to deduct from Buyer’s Deposit any upfront document preparation fees in order to provide buyer with documents necessary for Buyer to remove Buyer’s Investigations contingency. Fees paid out of Deposit are non-refundable in all events. Parties may not waive review of HOA documents. This provision does NOT include any HOA dues in arrears.
- ACCEPTANCE is agreement and execution of documents between Buyer and Seller. Approval occurs when written approval from all lien holders has been delivered to all parties.