If you’ve spent even five minutes browsing the Los Angeles real estate market, you already know it’s no joke out there. From Hollywood Hills to the Valley, home prices are sky-high and competition is fierce. So when a listing pops up labeled “short sale,” your curiosity is totally justified.
A traditional sale may suit you better.If you're looking for a more detailed breakdown or tips on actually finding these types of properties, check out https://shortsalesinlosangeles4.wordpress.com/2025/04/20/how-to-find-short-sales-in-los-angeles/. It offers practical guidance on navigating LA's short sale market and where these deals tend to pop up
“Wait, is this a secret deal? A loophole?
Can I actually get a house in LA for less?”
Well… yes and no.Short sales can absolutely be cheaper than traditional home sales. But they also come with strings attached—and it’s not always the screaming deal people think it is.Let’s dive into the reality behind short sales in LA and answer the big question:
Are short sales really cheaper than regular homes?
What Even Is a Short Sale?
Let’s clear this up first. A short sale is when a homeowner sells their property for less than the amount they owe on their mortgage, with the lender’s approval. Why would the bank say yes to losing money? Because it’s still better (and cheaper) than going through foreclosure.So, when you buy a short sale, you’re essentially negotiating with the bank—not just the seller.
The Price Tag: Are Short Sales Actually Cheaper?
Okay, let’s talk money. Are short sales priced lower than regular listings?
In most cases, yes. On average, short sales can be 5% to 20% cheaper than comparable homes in the same neighborhood.Here’s why:The seller is in financial distress and wants out.The lender is motivated to avoid foreclosure.The home is often sold “as-is,” meaning it may need repairs or updates.The longer it sits, the more willing everyone is to take a lower offer.So yes, short sales can be cheaper—but the catch is, you’re not the only one who knows that.
The Hidden Costs Behind the “Discount”
Before you start mentally moving into that hillside home in Echo Park, remember that short sales come with a different kind of price.
Here's what that might look like:
Repairs and Renovations: Many short sale homes haven’t been maintained properly. You could walk into plumbing problems, roof leaks, outdated wiring—you name it.
Longer Timelines: Buying a short sale is not a fast process. Lenders can take weeks or months to approve your offer. If you're in a rush, it's probably not the route for you.
As-Is Purchases: Don’t expect credits for repairs or closing costs. The bank wants to cut its losses and move on, not negotiate.Unpaid Liens: Sometimes the seller owes property taxes or HOA fees. You may get stuck with those unless you catch them during escrow.
How Do Short Sale Prices Compare in LA Specifically?
Los Angeles is its own beast when it comes to real estate. What applies in other markets doesn’t always hold up here.In general:
Short sales in LA often list 10-15% below market value to attract buyers quickly.However, bidding wars can still happen, especially in hot neighborhoods.Banks will usually order a broker price opinion (BPO) to make sure they're not underselling the home.So while the sticker price might look low, don’t assume it’ll close at that amount. A bank may counter higher—or accept a different offer entirely.
Who Really Benefits From a Short Sale in LA?
Let’s break this down. A short sale can be a great opportunity for:
First-time buyers who aren’t in a rush and have some cash for repairs
Investors looking for a flip or long-term rental
Buyers wanting into a specific neighborhood that’s normally out of their budgetHowever, if you’re relying on tight timelines, minimal upfront costs, or need move-in ready?
Pros of Buying a Short Sale in LA
Let’s balance the scale a bit and look at the perks:
Lower purchase priceLess competition than foreclosures
Opportunity to build instant equity if the home appraises higher
Chance to get into a neighborhood that’s usually unaffordable
Cons to Watch Out For
Of course, no deal is perfect. Watch for these red flags:
Lengthy approval process
Property sold “as-is”
Bank can reject your offer—even after weeks of waiting
Possible liens or unpaid bills
Potential for multiple offers or bidding wars anyway
Tips for Scoring a Short Sale Without Getting Burned
If you’re serious about buying a short sale in Los Angeles, here’s how to set yourself up for success:
Work with a real estate agent experienced in short sales
Get pre-approved before making offers
Do a thorough home inspection
Use an escrow company familiar with lien clearance
Stay patient and flexibleSo… Are Short Sales Really Cheaper Than Regular LA Homes?
Here’s the final word: Yes, short sales can be cheaper. But cheaper doesn't always mean “better.”Think of it like buying a used car from someone in a rush to sell. You might get a deal, sure—but you need to do your homework, check under the hood, and be prepared for a few repairs.If you’re up for the challenge, a short sale could be your entry into a part of LA you thought was out of reach. Just make sure you walk in with your eyes open, a solid plan, and an expert by your side. For more additional informatio check https://realestateshortsales.tumblr.com/post/781330499512778752/what-documents-do-sellers-need-for-approval
