A short sale is when a home is sold for less than the amount owed to the lender or lenders.

1. A short sale does less damage to your credit than a foreclosure
2. A short sale satisfies the debt owed to your lender(s)
3. A short sale allows your home to be sold, avoiding a foreclosure

Century 21 Noel David Realty has been selling real estate in California since 1969 and is a licensed real estate Broker with the California Department of Real Estate for over 40 years. We have successfully negotiated and closed short sales since the start of this downturn in the market. We know the process very well.

1. We are Realtors and we are here to help you through this difficult process.
2. We have a successful track record (approximately 95%) of closing short sales due to our experience in this specialized field.
3. We answer the phone! We do not leave calls go un-answered or returned days later!
4. When your property is listed with us, there will not be any signs advertising it as a "Short Sale" or "Pre-foreclosure". We will disclosed this to interested buyers agents in the MLS. Your neighbors and to anyone else your property will look like a normal real estate sale.

There are fee's involved, a 6% listing fee which is split 50/50 with the selling/buyers broker and a facilitator fee's. Who pays the facilitator? That depends on the bank and or mortgage insurance companies involved with the loans. There are Government regulations pertaining to short sales. Each case is different, we ask that the buyer pay the facilitator fee so hopefully there are no fee's to the sellers.

Foreclosures are a public record similar to a bankruptcy and usually will affect your credit score by lowering it 150 to 300 points. As a public record it will stay there for 7 to 10 years. Short sales do not show up under public records, all that will show on your credit will be the late payments to the lien holder(s) / mortgage companies and a comment like "settled for less than full amount due". Depending on your other creditors (your other credit accounts) the score may only be affected by as little as 40 to 80 points.

The foreclosure will remain as a public record your credit history for 7 to 10 years. On a short sale, only the late payments will be reported on your credit. The short sale will appear and will be reported as "settled for less than full amount due" or something similar.

It will be a while before you can buy again. Per Fannie Mae, individuals losing a home to foreclosure will not be eligible for a Fannie Mae loan for 5 years. Again per Fannie Mae, if an individual completes a short sale they will be able to purchase a home after 2 years with acceptable credit scores.

If you lose an investment property to foreclosure then you can not buy another investment property for 7 years per current Fannie Mae guidelines. Per Fannie Mae, if an you complete a short sale then you will be able to buy an investment or personal home after 2 years, per current Fannie Mae guidelines.
PLEASE NOTE – Fannie Mae is currently the #1 insurer of residential mortgages with Freddie Mac being #2. Freddie Mac's guidelines are just about the same as Fannie Mae's.

When apply for mortgage you will be filling out a 1003 standard loan application for the purchase of a home. The borrower will have to answer the question in section VIII, "have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?" For 7 years the type of loan and or rate you will receive most likely will be affected by this. There is no question at this time related to short sales currently on a 1003 loan application.

Depending on the type of loan, California laws allow for the lender in some instances to pursue the homeowner for a deficiency. Consult an attorney for up to date laws.
As part of the negotiation process, in most cases we ask to have the lender agree to release the homeowner for any future deficiency.

At the end of the year the lender will provide a 1099-A which reflects the amount they have written off. This will show as income to the homeowner. The homeowner may or may not be responsible for paying taxes on this income. Insolvency may be an option to the amount forgiven. Consult an accountant or attorney for more information.
We are not tax experts or attorneys. WE STRONGLY URGE YOU to consult a CPA/tax specialist/advisor and or an attorney regarding your situation.