Stumbling Blocks to Selling Your Santa Cruz Real Estate as a Short Sale

Posted by Lauren Spencer on Tuesday, June 28th, 2011 at 11:01pm.

You want to avoid a foreclosure on your Santa Cruz real estate so you’re decided to try to sell it as a short sale. Unfortunately, there are several stumbling blocks that can keep you from successfully selling your home as a short sale.

Here are four short sale killers you should be aware of before deciding to sell your Santa Cruz real estate as a short sale:

1. You have not defaulted on your mortgage.  Lenders will almost never accept requests for short sales until you are significantly behind in payments and have received a notice of default.

2. You filed for bankruptcy.  If you’ve filed for bankruptcy, a short sale will most likely not happen. Few, if any, lenders will consider a short sale when the seller has filed for bankruptcy.  This is because collection activities are not allowed in bankruptcies and a short sale is considered a collection action.

3. More than one lender is involved.  If you have a second or third mortgage (or home equity loan or line of credit), all the lenders must agree to the terms of the short sale. Unfortunately, this is often difficult because the second or third lenders are the ones who absorb most of the loss.  If you have more than one lender, and you want to try for a short sale, do a title search to verify the first and primary lender.  Making a deal with the second or third lender is a waste of time because you’ll still owe the first lender.

4. The lender drags his feet.  Many short sales fail because the lender fails to complete the deal before the property goes to auction.  Get the lender to move faster by making sure he has everything he needs in one concise package.  If the lender doesn’t get everything at one time, he tends to set the file aside and forget about it.  You can also speed up the process by working with a real estate agent who is experienced with and knowledgeable about short sales.

If you have additional questions on short sales, foreclosures or any other Santa Cruz real estate related topics, please give me a call at 831-662-6522 or email me at  I’m happy to help.

For more information, please visit my website at

About Lauren Spencer

Award-Winning Santa Cruz REALTOR®

Lauren Spencer is your local real estate expert, specializing in Santa Cruz real estate and surrounding communities—this is where she lives, works, and plays too. Let her know your questions about the community and county and she'll be happy to fill you in on all you want to know! Lauren Spencer has consistently been voted best local REALTOR in Santa Cruz and is always happy to offer her advice and expertise. Call her at: 800.226.4717.

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