What should I expect from a short sale on my Los Feliz home?

1. Call the loan servicer and ask two things: is a short sale an option on this loan, and what goes in its application?
2. Sit down with a HUD-approved counselor and a California attorney before choosing this path over a modification, a deed in lieu or a regular sale.
3. Collect the paperwork: pay stubs or other income proof, a monthly budget, recent statements, a letter explaining the hardship and copies of lender notices.
4. Settle on a list price with me, drawn from recent sales of comparable nearby houses.
5. Market the home and sign a purchase contract that is contingent on the lender's consent.
6. Submit the contract and your file to the servicer, and reply quickly when its valuer or negotiator asks for more.
7. Close once the approval letter is in hand, following its terms.

Mainly whether the net it receives is in line with its own estimate of value, often a broker price opinion or appraisal it orders. In Los Feliz the estimate can go wrong in either direction. A valuer driving by a canyon house may not see a cracked retaining wall, a downslope foundation or a stair-only approach; on a level block, an older sewer line or an unpermitted garage room may not show from the curb. Documenting the house clearly closes that gap.

Because purchasers pay for what they can build. In the Hillside Area, which City maps show taking in almost all of the Los Feliz hills, City Planning's Baseline Hillside Ordinance (Ordinance No. 181,624) caps floor area by slope band on R1, RS, RE and RA lots. Someone hoping to enlarge a small hillside house will look at that cap before bidding. Down on flatter blocks, the generalized zoning layer includes R2 and RD1.5 zones, where a lot zoned for more than one unit may interest a different group of purchasers. Read the zone on the parcel's ZIMAS profile rather than assuming it.

It can be. Maps the City draws from State data show the Alquist-Priolo Earthquake Fault Zone for the Hollywood fault crossing part of the Los Feliz Neighborhood Council area, so some Los Feliz properties are inside it and others are not. The California Geological Survey says that in real estate transactions the seller must disclose to prospective buyers when an earthquake fault zone affects the property for sale. Order the natural hazard disclosure report at the start; it and an EQ Zapp search show whether your parcel is inside the zone.

Keep it modest. Repairs are usually limited, and any that affect the payoff need the lender's agreement. Low-cost steps that help:

• ☐ Vegetation handled. Parts of Los Feliz are mapped as a Very High Fire Hazard Severity Zone, but not every street is. Check the specific parcel on ZIMAS or the CAL FIRE map, and confirm with the natural hazard disclosure in escrow. LAFD sets clearance within 200 feet of structures where the zone applies.
• ☐ Interiors tidied so listing photos and the valuer's walk-through show true room sizes.
• ☐ A parking plan for visitors. Some hillside streets have posted Red Flag No Parking signs; on declared Red Flag Days, cars parked there are towed. City data show posted segments on Prestwick Drive and Amesbury Road, among others; I look at lafd.org/redflag before each showing.
• ☐ Hazard and seller disclosures begun, including an EQ Zapp search for mapped fault, landslide and liquefaction zones.
• ☐ The City's Residential Property Report requested early, so it is ready when the approval letter comes.

There is no set schedule; the servicer controls it, and reviews can run from weeks to many months. A trustee's sale may be scheduled before an answer arrives. Stay in contact with the servicer, your counselor and your attorney, and have a fallback plan in case the request is turned down.

Ask your attorney; it turns on the loan and the approval terms. What happens to any remaining balance is a legal question. Have your attorney read the lender's approval letter before you sign. A short sale can also have tax consequences (see IRS Publication 4681), so bring the lender paperwork to your CPA before you sign.

The approval letter states which costs the lender allows from the sale proceeds. LA County's documentary transfer tax is $1.10 per $1,000 of the sale price; some cities add their own tax, and your escrow estimate shows the exact figure. For qualifying transactions closing after June 30, 2026, Los Angeles Measure ULA imposes an additional 4% tax when the value conveyed exceeds $5,400,000 but is below $10,900,000, or 5.5% when the value conveyed is $10,900,000 or more. The applicable ULA rate is calculated on the full gross value conveyed, not just the amount above the threshold. The City's 0.45% base transfer tax and the County documentary transfer tax are separate charges. Confirm the calculation and any applicable exemptions with your escrow officer.

LADBS requires the seller of residential property in the City of Los Angeles to give the buyer a Residential Property Report before the sale or the close of escrow (LAMC Section 96.300; $70.85 per report as of October 31, 2026). The LADBS Form 9 application says no new report is needed for six months after one is issued, and it lists exceptions, including property exempt from the documentary transfer tax and the first sale of a home in a subdivision whose final map was recorded not more than two years earlier. Check your transfer with LADBS before ordering.

The amount or rate of real estate commissions is not fixed by law. They are set by each broker individually and may be negotiable between the seller and broker.

What to bring to your CPA or attorney: the lender's approval letter, every notice and statement from the servicer, the escrow estimate, and any IRS forms the lender sends after closing.

• How to sell a house in Los Feliz
• Selling a Los Feliz home before foreclosure
• Selling a Los Feliz house without repairs
• Short sale services
• Nearby: Silver Lake short sales explained

Sidney Manzo, CA DRE #01108914
In real estate since 1990 · RE/MAX Hall of Fame · Member, Pasadena Foothills Association of REALTORS® and California Association of REALTORS® (C.A.R.)
Brokerage: RE/MAX Dream Properties (ASLG Inc), CA DRE #02142193