What Are the Scariest Words In Orange County Real Estate Today?

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What Are the Scariest Words In Orange County Real Estate Today?

If you ask me, the scariest words in Orange County Real Estate right now are “Short Sale Approved!”

I heard you gasp.

You thought that if it was an Approved Short Sale it would be like your mommy kissing your boo boo and making it all better.  Ha. Snap out of it.  That clever distraction didn’t work then and it certainly won’t work now.  Here’s why.

A Contract is Required

For the bank to render a decision to approve a Short Sale, they respond to a specific offer from a specific buyer.  Usually after a specifically long enough time to lose that buyer.  Seriously.  That is what Approval means in this context.  Get it?  It is an approval on a contract that is no longer valid. When an Orange County home is advertised as an Approved Short Sale, it means the bank bit the hook, but that specific buyer disappeared.   Hasta la Vista, baby.  So the savvy Short Sale listing agent scrambles to re-market the house, get a bio-identically matching offer from someone like you, and ask the bank to just change the names, therein protecting the innocent.  So here you come along, with your pre-approval for a home loan and your down payment all lined up and fully documented, and you are salivating at the idea that someone else waited months for the bank to burp up a decision. Now all you have to do is show up on third, make a new offer at the approved price, and slide on into home plate.  Your Home Plate.

Not so fast, amigo.

What you don’t realize is that the net sheet for the bank was done all those many months ago, before the sellers stopped paying their HOA dues and Property Taxes.  And before the sellers moved out and left the house vacant with no utilities, for months.  Before the grass died, the dishwasher froze and the pool turned green.  And the market shifted. Or maybe the seller even agreed to an Option Contract and you are now in A-B B-C ville and not a Short Sale at all.  Oh just shoot me now, you say, the misery is too much.

New Contract, New Calculations

Here’s the real deal on Approved Short Sales, my friends.  The bank (or banks if there is a second and third and fourth lien holder involved) will have to do a RE-DO.  They have to go back to the very beginning.  A very good place to start.  But you thought you were at the Finish!  And while it typically is a shorter process than the original approval, there is the same unknown on both the length of time for a response from the bank and for the price, terms, and conditions the bank will burp back to you.  Don’t stick your fingers in you ears and say “LaLaLaLaLa” – listen up!  This is why these are scary words – because you literally have to go back to square one and go through the process.

At least now you can decide if this is a game you want to play.  Batter Up?  Oh, and here’s a BandAid for your boo boo.

I’m ready when you are.  It’s me, Leslie.  Just keeping it real in Orange County Real Estate.

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