Number of Florida Short Sales Picking Up

From April to June of the current year, the number of Florida short sales reached 20 percent of the total home purchases. This figure is a good sign banks are more than willing to compromise with distressed homeowners. It is also certainly better compared to national numbers.

At the national level, there were only 9.5 percent out of the total home sales that involved short sale transactions for the same period based on the report from California-based realty firm RealtyTrac. In Florida, short sales accounted for 17 percent of the total home sales in Palm Bach County, 14 percent in Martin County and 25 percent of total purchases in St. Lucie County.

Considering the latest report, a lot of Realtors are agreeing that short sales are fast becoming the favorite foreclosure alternative and have even become less lengthy and complicated. Banks like Chase and Bank of America are opting to be proactive and get things done as soon as possible. Many have also become responsive to the situations of their borrowers, with most calling the lenders for follow ups and not the other way around.

Last April, the federal government approved new rules which standardized all documents related to short sales. Also, lenders who participated in Home Affordable Foreclosure Alternatives Program are given 10 days to respond to offers.

In relation, foreclosure sales declined in Palm Beach County accounting for just 24 percent of all the sales compared to 26 percent last year. It is believed the drop was the result of homeowners taking advantage of the tax credit which the federal government offered as incentive. In 2005, the number of foreclosure sales out of the total home purchases was just 1 percent.

The rise in Florida short sales is very much welcome. In order for the market to fully recover, these homes should be cleared from the inventory.

Reference: http://www.palmbeachpost.com/money/real-estate/short-sales-process-picks-up-945685.html

Avoiding the Pitfalls of Florida Short Sales

There is no denying Florida short sales are lengthy and complicated. There are plenty of things which could go wrong and make you want to give up, even if you know this is the best option available for homeowners like you who have underwater mortgages. The moment you acknowledge that it will not be easy, you will be more prepared when the problem comes.

Managing the difficulties that come with short sales will require you to be realistic. You should never assume everything will go as planned because they seldom do. If you do decide to sell your home, you need to make a list of what you need to do in order to avoid the usual pitfalls. These include:

· Preparing all your financial documents – You need to be thorough since you will be the one who will do the convincing that a short sale is the best option. You have to be able to back up your claim with sufficient proof.
· Preparing your home – You can expect to show your home to interested buyers and you must make an effort to make your home as presentable as possible. The sooner you find a buyer, the faster you will be able to prepare the short sale proposal. It should not take much when staging our home. Just make sure it is clean and clutter-free.
· Preparing yourself and your family – During this difficult period in your life, you need to prepare your family for any possible outcome. It would not be a good idea to pin all your hopes on the short sale. Just leave some room for the possibility the lender will turn down your proposal and you will have to face foreclosure. Of course, you can also use this to motivate yourself to do everything to get the approval.
· Looking for a short sale Realtor – It would be logical to hire an expert. After all, you might have difficulties addressing all the technical issues of the sale. Also, having a Realtor will somehow put your mind at ease knowing that there is another person who is as concerned as you.
· Opening communication lines with your lender – As soon as you realize you need to explore options to avoid foreclosure, speak with your lender. You should not consider them as your enemy although it is only natural for them to think about their interest. It would work to your advantage if you establish communication and keep it open in case of any problems.

Staging Tips for Florida Short Sale Sellers

One of the challenges that sellers of Florida short sale properties face is attracting the right kind of buyer. Many distressed homeowners make the mistake of thinking because they are in a tight situation they do not need to impress homebuyers. You will be surprised to know that most home buyers base their decision on how the home looks, inside and outside.

If you are serious about finding a buyer for your home in order for you to proceed with the short sale transaction, you should make an effort to stage your home especially in the current market. There are literally thousands of homeowners who have upside down mortgages and trying to sell their homes as soon as possible. If you want to enjoy some advantage over them, then you should do what it takes to make your home very attractive.

Be Objective
Putting your home’s best face forward will require you to look at it objectively. Since you are living there and you have a particular preference, you might not find anything wrong with how your home looks. Still, you need to think about what attracts potential buyers. In many cases, it would be necessary for you to throw away, store or donate some of your things, allowing their buyers to see your home and not your personal belongings.

Be Creative

There are many ways you can improve how your home looks without having to spend much money. For example, you might simply try to rearrange your furniture in such a way that your home looks a lot roomier. You can also do little handyman work such as painting your fence, fixing broken cabinets and drawers or stripping your walls of wallpaper. These things may not be much but you will be surprised at how different your home will look.

Ask for Help

You are indeed lucky if you are working with a Florida short sale Realtor. He or she can give you great advice regarding home staging. Some would even recommend you hire a professional stager. It might cost more but you will be able to attract a buyer sooner.

Considering A Tampa Short Sale? Know What to Look Out For!

Struggling homeowners who are considering a Tampa short sale to stop foreclosure should not be caught up in their mortgage problems too much. Although it is understandable you are feeling a lot of pressure because of the possibility of losing your home, you still need to pay attention to what is going on around you.

Truth be told, even if short sales are considered to be an effective solution to avoid foreclosure, there are still a lot of things which could go wrong. If you want to avoid making costly mistakes, be sure to look out for the following:

1. Unprofessional Realtors – It is sad to say there are Realtors who would take advantage of your situation. Since it is more practical to hire a short sale agent to help you complete the proposal, look for a buyer and negotiate with the lender, you should be very discerning. Hire based on reputation and experience. If possible, ask for references and double check their credentials.
2. Unsure Buyers – Because of the large inventory of distressed homes, buyers are enjoying the upper hand. You should make sure you are dealing with a serious buyer considering you are racing against time. Of course, there is no guarantee but it would not hurt if you ask for proof that he is indeed in the market for a home.
3. Tricky Short Sale Contracts – It is crucial you read the fine print of the short sale closing contract especially if the lender initially agreed to forgive the entire debt. There are instances when the lender leaves a door open that can use to pursue a deficiency judgment against you.

As a distressed homeowner, you have to be involved in the Tampa short sale process if you want things to go as smoothly as possible. Even if you have a good short sale Realtor, your cooperation and participation will be very much welcome.

Struggling Condo Owners Welcome New Help

Florida condo owners are also suffering from the after effects of the global financial crisis and collapse of the mortgage industry. When property tax bills are received, these homeowners cannot help but sigh when they see they owe more compared to what their homes are worth. Most of these individuals are confused about what to do. Although they are not yet in mortgage default, the fact that they are paying so much in taxes make them want to explore options such as refinancing or a Florida short sale.

Of course, some condo owners are tempted to simply walk away from their homes but they should realize there are smarter options. In addition, the federal government has finally decided to help out homeowners in danger of losing their homes by offering cash if they decide to deal with their underwater mortgages responsibly. Walking away from one’s home is probably the worst thing a homeowner can do according to some experts. Such decision could haunt you especially if the banks decide to go after your assets.

Condo owners in Broward, Palm Beach, Orange and Miami – Dade counties are starting to receive property tax bills or TRIM notices as early as last month. These bills show the amount of tax they owe as well as the value of the properties according to the Property Appraiser’s Office. One condo owner discovered her home’s value declining by about $6000. The sad news is her decision to refinance means she is now paying a $47,000 debt for a home valued at $28,000.

If this situation looks familiar, you should not panic. There is some federal help available. For instance, the Home Affordable Foreclosure Alternatives or HAFA Program provides cash to underwater homeowners in order to prevent foreclosure. Lenders who choose to accept a deed in lieu or short sale proposal are also offered incentives.

Homeowners can receive as much as $3000 if their Florida short sale proposal or deed in lieu has been accepted. Conditions include vacating the home and making sure it is in good condition and not having any missed mortgage payments for two consecutive months. And to make this happen, be sure to get professional assistance from short sale Realtors.

Reference: http://www.sun-sentinel.com/business/realestate/condos/fl-underwater-condocol-0915-20100914,0,947088.column

Short Sale – The Best Option for Distressed Homeowners

Homeowners are said to be “struggling” or in “distress” if they are having trouble meeting their mortgage obligations. If you are one of these unfortunate individuals, you should know that until your lender takes away your home and asks you to vacate, you can fight foreclosure every step of the way since you are the owner.

In fact, to make it easy for you to choose which option will allow you to solve your mortgage problems, the American Bankers Association has come up with something similar to a score card to help homeowners like you. For lenders, they would prefer you stay and work with them in order to avoid foreclosure.

Of course, not all banks are open to a loan modification and drag their feet when the time to negotiate comes. This is perhaps the reason why some homeowners choose between a strategic default and a short sale. The first option will mean walking away even if you can still afford to pay your mortgage and the second one involves selling the home at an amount which is less than what you owe.

Here is ABA’s analysis:

Mortgage Modifications – This option will certainly be ideal for the following reasons. One, you will be able to pay your mortgage since the monthly payments will be lower. Two, there is no need to think about any legal actions taken against you since you will still be fulfilling your contractual obligations. Of course, you get to stay in your home, which is probably the top reason why you would want this option to work out. As far as disadvantages go, there is a chance the loam modification application will not be approved and even if the lender agrees, it might still damage your credit score. The other issue is you will still be under water significantly.

Strategic Default – When you choose this option, one benefit is there will be no more mortgage payments to worry about. But the downside includes significant damage to your credit as well as the huge possibility your lender will go after your assets.

Short Sale – If you are already behind on your mortgage payments or will not be able to make the next payment, you need to look at this option. The benefits include not having to worry about mortgage payments and there would be no legal actions against you in some cases. In some cases the lender agrees to forgive the difference or not pursue a deficiency judgment. You will also be able to avoid a foreclosure entry on your credit report which could cost you much, in terms of credit score. To ensure a good proposal, hire a short sale Realtor.

Roonie Pushes for New Short Sale Rules

The issue is lenders are doing business not real estate. We all know that real estate is handled very differently than what the banks and lenders are doing right now. Thank you NAR for keeping banks and lenders out of real estate. It is very apparent they do not deserve to be in the same room as all us Realtors!

It is not a secret that short sales in Florida is increasingly becoming a staple in the housing market scene. After all, a considerable percentage of homeowners are currently struggling with their underwater mortgages. Fortunately, the state government is not blind to such struggles. In fact, Congressman Tom Rooney of R-Tequesta has decided to join the efforts being made to encourage lenders to provide an answer involving short sale proposals within 45 days.

At present, half of the total Florida Treasure Coast short sale transactions, or more commonly called as distress sales, take as long as 10 months. Considering the long wait, it is not surprising a lot of the buyers are withdrawing their offers and seek other short sale properties to buy. Of course, it is the homeowner who suffers most when this happens.

According to Congressman Rooney, if lenders are given just 45 days to render their decision involving a short sale, it would speed up transaction and prevent properties from ending up as foreclosures.

The said legislation entitled Prompt Decision for Qualification for Short Sale Act of 2010 or HR 6133, which is co-authored by Robert Andrews, Representative of D-NJ, will be able to relieve the burden being carried by underwater homeowners.

Even Realtors welcome the legislation and believe the state economy will benefit much from such changes in short sale process. Right now, it cannot be ignored that distressed homes represent a considerable percentage of the housing market. And in order to enjoy true and lasting recovery, these properties must be absorbed. And it would not even be difficult considering there are plenty of consumers or home buyers who are more than willing to purchase these homes and would be thrilled if the normally-lengthy process will be cut short.

Data showed that in St Lucie County, around 50 to 58 percent of the home sales involved both foreclosure and Florida short sale. Realtors believe that if the inventory of short sale and foreclosure properties will be cleared, a balanced market can be achieved and enjoyed.

Among the states hit hardest by the mortgage mess, Florida ranks second in terms of the number short sales. At least 27 percent of the total home sales for the second quarter of the current year involved short sales.

Reference: http://www.tcpalm.com/news/2010/sep/16/rooney-favor-new-rules-residential-short-sales/

Benefits of Short Sales You Cannot Ignore

Most of the homebuyers who took advantage of the housing bubble several years ago are now finding themselves in an unfortunate situation. As the housing market suffered from the mess resulting from the collapse of the mortgage industry; home prices have declined considerably. To make matters worse, the mortgage mess set off a global financial crisis which resulted to high unemployment rates and companies filing bankruptcy.

Now, if you are a homeowner who is having financial difficulties and living in a home in which the market value is less than your mortgage balance, you cannot help but worry about losing your home to foreclosure. Instead of wallowing in your fears, it would be better if you look at options as early as possible and prepare yourself for the worst.

One solution you might want to check is a short sale. The principle behind this transaction is simple. Look for a buyer and convince the lender to accept the proceeds of the sale even if you will not be able to fully pay your mortgage debt.

Despite the lengthy process and the many requirements, you will find a short sale may be the perfect solution to your mortgage situation. There are actually several benefits you can enjoy. For starters, you will be able to save your credit score. True, there will still be negative impact but it is not as much compared to foreclosure. You can even try to convince your lender to not report the transaction as a short sale. In relation, this transaction will not strip you the right to home ownership.

By choosing to short sell, you can also avoid the embarrassment which usually come with a foreclosure. You will also feel good knowing you did everything you can to stop the lender from repossessing your home.

The good news is there are many short sale Realtors and agents who can help facilitate and act as your representative. Your Realtor will be the one who will prepare the proposal and make sure every financial document is submitted. Of course, you need to be involved every step of the way so you will understand what is going on and respond accordingly if there are issues with your proposal.

Short Sale From A Buyer’s Perspective

Homebuyers who have done their homework know how profitable it is to invest in short sale properties. Just like any investment, there are risks. If you want to avoid the risk associated with short sales, then there is only one thing to do — learn as much as you can about this real estate transaction and prepare yourself.

For starters, you need to understand what a short sale is. There are different circumstances why sellers might consider short selling, but at the end of the day, it is the same thing. The home is sold at an amount which is less than what the homeowner owes on the mortgage. The lender’s role or participation in this transaction is vital since the owner will need the lender’s approval to sell the home to pay for a percentage of the mortgage balance. It is up to the lender if they want to go after the difference or simply forgive the debt.

So what are the risks involved?

For starters, despite its name, a short sale is not “short”. It can take from anywhere between 6 months to a year. It is understandable you might want to look at other properties just in case the deal does not push through but you have to be in constant communication with the seller since, it would also be unfair if you suddenly decide to make an offer on another property while waiting for the proposal to be approved.

When it comes to the selling price, you and the seller might reach an agreement but you have to remember the lender has the final word on the matter. In order to improve chances of approval, make sure your offer is reasonable. You should take into consideration the current market value of the property, the appraisal value, comparable home sales and other market indicators. Of course, be sure your offer is something you truly can afford.

Lastly, you have to understand the home will be sold “as is”. You cannot expect the seller to make repairs and improvements. This is why it is important you hire a professional inspector to check the home to determine its true physical condition. You can justify your offer if you have an inspection report.

To help you manage these risks, there are short sale Realtors who will be more than happy to provide you assistance. It would be a smart move to hire one especially if you consider the unexpected problems which could arise during the process.

Beware of Fraudulent Short Sales

According to a report issued by the financial consultation company CoreLogic, the growing popularity of short sales as a solution to stop foreclosure gave birth to a new breed of fraud. Because of the rising number of fraudulent short sales, real estate analysts and experts are worried it could affect the industry’s effort to address the high foreclosure rate problem.

Short sales have been known to benefit not only homeowners but lenders as well since they are cheaper than a foreclosure. Even the government realized the benefits of such transaction and created incentives for both parties involved. Based on records, short sale transactions leapt from 100,000 (2008) to 400,000 for the current year.

There are actually several forms of fraudulent short sales. One involves the agent negotiating a lower price with the lender but sells it to another buyer for a higher price. In some cases, the agent uses the identity of the buyer and their financial information to buy another home. Another form involves homeowners defaulting on their mortgage even though they can afford it and selling the home to a relative or a friend. The original homeowners get to stay in the property and the “new owner” will agree to transfer ownership via a quit claim deed.

Although CoreLogic believes there were only 2 percent of the total short sales transactions in the past 24 months which were fraudulent, it is obvious it is becoming a trend. The figure was obtained by the company by estimating the short sales in which the properties were sold quickly or re-sold/flipped at a suspiciously higher price.

It does not come as a surprise if the states hit hardest by the foreclosure mess recorded the highest number of suspected fraudulent short sale transactions. According to the report, Florida had the highest number followed by California, Texas, Arizona and New York. Sadly these states have relied heavily on short sale transactions to provide relief from the high foreclosure rate. It would indeed be unfortunate if the fraudulent activities of this type will continue especially when short sale is becoming the preferred solution by both lenders, underwater and distressed homeowners.

Commit fraud go to jail, do not pass go. The downturn in the market has reduced the amount of agents. Can we crack down and get rid of the rest of the crackpots?

Reference: http://www.nytimes.com/2010/09/12/realestate/12mort.html?_r=1