Fred Sed's Blog: June 2009

How much does it cost me for you to do a short sale on my house?

In a short sale we charge $595 documentation fee upfront for hard costs that we incur. The reasoning behind the fee is simple. We want you, the seller, to be sure of your financial hardship. We don't want to take on a short sale listing if the seller is not being forthright with us regarding their situation.

Also with a short sale situation all other fees like closing costs, broker's commissions, etc are all paid for by the bank. The seller does not pay these fees because the seller does have the money to pay it. All of this is in writing prior to the process taking place.

This fee is very small compared to the huge advantage you could have once the short sale is approved and completed.

Is my house too cheap or too expensive to do a short sale?

With a short sale It does not matter how much your home is worth as long as basic criteria below is met you home would be eligible for a short sale:

Property in foreclosure or in default

Little or no equity in the property

Personal financial hardship

At Least 60+ days to a Foreclosure Auction

As I have discussed before, if you do have all four of these conditions currently then you should be eligible for a short sale. If you are not sure about the value of your property or if you have any questions what so ever, feel free to contact us.

*Should I accept a short sale offer from an investor?

Are short sales guaranteed to work?

No. Even though short sales are increasing they are still fairly complex, as I have stated. All the criteria MUST be met for a bank to even consider a short sale. It is not easy to convince a bank that the market value of the home is lower than what they are owed. They do not like to take a loss on a loan.

Then the bank must be convinced to discount the mortgage enough to make it viable for a potential buyer.

In some cases, we do all the paperwork and wait several weeks only to be denied. Again, the homeowner continues to own and live in the house if he chooses.

If the lender does not approve the short sale, The Pahua Group has no rights at all to the property and no transaction occurs. The purchase agreement becomes void and the listing continues.

IF YOU ARE HAVING TROUBLE WITH MAKING YOUR PAYMENTS OR ARE HAVING ANY FINANCIAL DIFFICULTIES A SHORT SALE MIGHT BE YOUR BEST OPTION.

CONTACT US TODAY TO SEE IF YOU CAN QUALIFY. OUR SERVICES ARE FREE AND EVERYTHING IS KEPT IN THE STRICTEST CONFIDENTIALITY.

CONTACT FRED SED AT 949-274-3733 OR EMAIL AT FREDSED@PGCOASTAL.COM

*Who owns the house after a short sale?

The purchaser of the house is the owner after a short sale just as in a normal sales transaction. The mortgage lender is paid off and the previous homeowner moves to a different home.

*What do I do about my back property taxes when I do a short sale?

Just as in a normal home sale, property taxes are the responsibility of the homeowner until the date the sale is closed. Then they become the responsibility of the buyer or investor.

If your property taxes have not been paid this will affect the negotiations between the buyer and the bank, so you must inform us or any buyer of those taxes owed.

* What is "Financial Hardship" and why is it so important?

"Financial Hardship" is a critical part of the short sale equation. No matter what you hear about banks "not in the business of owning real estate", etc., they DO NOT give homeowners a break easily. They require GOOD REASON to give a discount for a short sale. They have entire departments called "Loss Mitigation", which means their entire job is to reduce the loss the bank takes on a bad loan. Giving big discounts to sellers increases the loss on a bad loan, so they don't take it lightly.

The ONLY reason a lender will agree to a short sale is if they determine that the short sale will net the more money that proceeding with the foreclosure. Understanding the homeowner's financial hardship is a big part of the lender estimating whether they will be paid in full for the mortgage.

IF THERE IS NOT A LEGITIMATE FINANCIAL HARDSHIP, A LENDER WILL NOT SHORT SALE EVEN IF THE HOME IS WORTH LESS THAN THE MORTGAGE BALANCE. Quite simply, the lender will make the borrower pay the shortfall if there is no hardship.

Many homeowners try to use a short sale as a "get out of jail free" card to dump their poor investment. Lenders will not allow this and it is a waste of time to try. If you are employed and have some assets, but you have simply lost value on your home and want to sell, YOU PROBABLY CANNOT SHORT SALE. If you are current on your mortgage, IT IS VERY DIFFICULT TO SHORT SALE. Lenders need to see that you simply cannot pay them back before they will short sale.

To see if we might be able to handle your short sale call

(949) 274-3733, or e-mail us at FredSed@PGcoastal.com

If you expect to make money on my short sale, can I get some of it?

Unfortunately, that is not allowed by the lenders. A lender will not allow a seller to profit from a short sale. If they perceive that there is any "excess" money in the transaction, they want it for themselves to offset their loss.

Do I have to move after I do a short sale?

Yes. After the short sale transaction, the new owner will own the house and the seller must move, just as in a normal sale.

IF YOU ARE HAVING TROUBLE WITH MAKING YOUR PAYMENTS OR ARE HAVING ANY FINANCIAL DIFFICULTIES A SHORT SALE MIGHT BE YOUR BEST OPTION.

CONTACT US TODAY TO SEE IF YOU CAN QUALIFY. OUR SERVICES ARE FREE AND EVERYTHING IS KEPT IN THE STRICTEST CONFIDENTIALITY.

CONTACT FRED SED AT 949-274-3733 OR EMAIL AT FREDSED@PGCOASTAL.COM

Why do I have to sign a Borrower's Authorization?


In order to both determine if your lender will consider a short sale and then to actually negotiate the short sale, The Pahua Group needs be able to speak to your lender about the mortgage. The lender will only speak to people you have authorized them to speak with.

By signing a Borrower's Authorization, you give the lender permission to speak to The Pahua Group about your loan. That is all it does, but it is necessary. An authorization must be filled out for each mortgage.

How does The Pahua Group make money on a short sale?

We make a standard real estate sales commission that is paid by the lender only in the event of a successful short sale.

IF YOU ARE HAVING TROUBLE WITH MAKING YOUR PAYMENTS OR ARE HAVING ANY FINANCIAL DIFFICULTIES A SHORT SALE MIGHT BE YOUR BEST OPTION.

CONTACT US TODAY TO SEE IF YOU CAN QUALIFY. OUR SERVICES ARE FREE AND EVERYTHING IS KEPT IN THE STRICTEST CONFIDENTIALITY.

CONTACT FRED SED AT 949-274-3733 OR EMAIL AT FREDSED@PGCOASTAL.COM

What if a bank doesn't accept the short sale?

Again, if the bank doesn't accept the short sale offer, there is no transaction and the home is still owned by the foreclosing homeowner and the foreclosure process continues.

How long does a short sale take, I need to get out now!


A short sale takes approximately 60 days to complete and sometimes longer. This is very important. This complicated process takes time so to have the option of a short sale, you must act soon. If you wait until 1 week before eviction, no one can help you do a short sale. It is simply impossible. DO NOT WAIT.

IF YOU ARE HAVING TROUBLE WITH MAKING YOUR PAYMENTS OR ARE HAVING ANY FINANCIAL DIFFICULTIES A SHORT SALE MIGHT BE YOUR BEST OPTION.

CONTACT US TODAY TO SEE IF YOU CAN QUALIFY. OUR SERVICES ARE FREE AND EVERYTHING IS KEPT IN THE STRICTEST CONFIDENTIALITY.

CONTACT FRED SED AT 949-274-3733 OR EMAIL AT FREDSED@PGCOASTAL.COM

If you are looking to rent a private condo or home in Orange County please visit our rental website to see

if there are any properties that meet what you are looking for.

Please visit www.PGLeases.comand if you have any questions contact Fred Sed at 949-274-3733, our

services are free to all tenants looking for a rental property.

If your credit is not good for whatever reason you do still have the ability to rent from a private owner. The

main qualifying factor should be your income and work stability. If that is solid you usually have a good

chance of being accepted. In this economy landlords do understand that not everyone has steller

credit. But there are some landlords out there that do want great credit. So the answer to this questions is

no, your credit doesn't have to be really good in order to rent a condo or house. If you have any questions

please contact Fred Sed at 949-274-3733 or vist our rental site at www.PGleases.com