How does a short sale work for a Mount Washington house?

The likely price falls short of what's owed, the lender (and any other lienholder) agrees to the terms, and a buyer is willing to wait. If there is equity instead, a regular sale is usually simpler; see selling before foreclosure in Mount Washington.

Important: listing or accepting an offer does not stop a foreclosure. If a sale date is set, contact your servicer, a California real estate attorney and a HUD-approved counselor promptly, and confirm in writing whether the lender agreed to postpone. Permission to market the home is not approval of the final sale.

1. Talk with a HUD-approved counselor or attorney about whether a short sale fits. Your attorney handles this part, and I work alongside them.
2. Get a property-specific home review grounded in recent sales.
3. Authorize the lender to speak with me and gather the documents it lists.
4. List with "subject to lender approval" disclosed.
5. Submit the accepted offer with the package.
6. Respond to the lender's valuation with comparable sales and repair bids.
7. Close only on the lender's written approval terms.

The lender decides what it needs and may ask for extra forms, its own valuation or more documents, and it may negotiate terms. No one can promise an approval time or a closing date.

From comparable sales, condition, the lot and access, with comps and repair estimates prepared in advance. A lender may still reject an offer for reasons other than price; if the gap can't close, your attorney and counselor discuss other paths with you.

Short-sale buyers often wait weeks for an answer, and on the hill they spend that time on insurance quotes and access. Help them start early:

• Fire classification. Look up the parcel's fire-hazard designation on ZIMAS and share it with buyers along with any brush-clearance receipts or photos; LAFD sets the clearance rules for the Very High Fire Hazard Severity Zone.
• Insurance. Encourage buyers to request quotes in the first days of escrow, not the last.
• Access. Describe the approach honestly: street width, turnarounds, stairs from the street and where a buyer's inspector can park.
• Showings. Schedule around declared Red Flag days, when posted fire-zone streets are tow-away zones.

The Residential Property Report and your permit history. Lenders and buyers both review the file, so order the LADBS report early ($70.85 as of October 27, 2026); LADBS lists exceptions and lets a report from the last six months be reused, so check with them first. Compare permit records with the house as it stands, especially decks and lower-level rooms.

They are typically paid from the sale, subject to the lender-approved closing statement. As of October 27, 2026, a City of Los Angeles sale carries County transfer tax of $1.10 per $1,000 and City transfer tax of $2.25 per $500; for closings after June 30, 2026, Measure ULA adds 4% on the full price above $5,400,000 and under $10,900,000, or 5.5% at $10,900,000 or more. Escrow confirms the exact amount and any exemption.

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.

Don't assume selling for less than you owe ends the difference; it depends on the loan, the law and the written agreements. Have a California attorney review the approval letter before you sign, and a tax adviser separately covers any tax reporting. Credit questions go to your counselor.

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

Related guides: selling before foreclosure in Mount Washington · selling a Mount Washington house as-is · selling a house in Mount Washington · short sale help in Highland Park and Eagle Rock.