Tips for the Short Sale

There are 82 new property listings in the Malibu area (everything in the 90265 ZIP code), according to the CLAW MLS. Of these, four are listed at short sales and three are listed as foreclosures/bank-owned properties.

At this point, Malibu has a larger percentage of standard sales—not distressed, bank-owned or short sales—than most other cities.  However, since there are 172 properties (up from 168 just two weeks ago) listed as pre-foreclosure or foreclosure in the Malibu area, expect some of these properties to be listed for sale within the year.

Just this past week, three appraisers called me to seek input on the appraisal process for the lenders they represent. This suggests there are three condominium properties coming on the Malibu market within the next few weeks. I suspect other properties are in this same process. Therefore, for those waiting to purchase below market values, be patient; there are properties that lenders will release in the next few months.

Nearby Pacific Palisades has 91 pre-foreclosure properties. There are only 58 properties in this category in Topanga. Malibu has a high pre-foreclosure rate compared to its neighboring cities. However, to understand the true magnitude of the defaulted loans, compare these numbers to 789 pre-foreclosures listed in Northridge.

For borrowers who are late paying their mortgage by 90 days or more, a short sale could be an option to consider. For more information about short sales, go . When a borrower falls behind in mortgage payments, it is always best to keep open communication with the lender.

A lender may accept a short sale when the borrower is in severe financial straits and market conditions make a short sale the best choice to mitigate the lender's damages. However, the borrower will need to prepare a packet of information for the lender to prove that a short sale would best suit the lender. The following list of what should be in the packet is provided by the California Association of Realtors:

1. Written explanation of hardship you are experiencing (loss of job, divorce, death, illness)
2. Previous two years tax returns
3. Employment paycheck stubs for the past two months
4. Completed and signed personal financial worksheet
5. Bank statements from past three months
6. Profit and loss statement (if borrower is self-employed)

As a property owner, a borrower should be in open communication with their lender about their inability to pay the lender. There are other options for hiring additional experts if desired. There are short sale consultants who negotiate real estate loans and perform services for borrowers or lenders. Alternatively, a Realtor can be authorized to negotiate any loans with a lender after receiving written permission from the borrower. There are options for distressed borrowers; the challenge is to determine what works best for individual situations.

Beverly Taki is a California-licensed real estate broker who has represented clients in Malibu for 22 years. She is a Malibu resident and president/broker of Seabreeze Estates Realty. Taki can be reached at beverly@beverlytaki.com or 310-456-4843. Her website is beverlytaki.com.