Cold Weather Benefits Florida’s Short Sale Market

According to reports last Tuesday, almost 70 percent of the United States was covered in winter’s snow. The National Weather Service, on the other hand, stated that Florida was the only state that did not have any snow and this includes Hawaii.

With the cold weather pummeling the Midwest and Northeast, it is not surprising why many Florida agents especially short sale Realtors are suddenly excited despite the sluggish sales activity in the housing market.

The lovely Florida weather has always been used by Realtors to attract individuals and families into buying a vacation home in the state. With the other states suffering from harsh winter conditions, Florida’s warm climate is not the focus of most real estate marketing campaigns.

Of course, there are also other factors. Short sale properties are currently generating plenty of buyer interest and the no-state-income-tax is also considered to be a plus. Some agents are using the difference in weather as a sign for homebuyers to consider relocating. For them, playing in the gorgeous beaches of Florida is so much better than getting stuck in the snow.

If you think about it, there is no reason for you to not look into Florida short sale homes for sale. Retirees are prime buyers since they are the ones who are looking for a warmer climate and would certainly love living right on the beach. It also helps that the state has a little bit of everything and there is actually no reason for you to have trouble settling in.

For practicality’s sake, you might want to check out short sale homes since they are quite hot right now. They are definitely a lot cheaper than other existing homes for sale although the process involved might be a bit lengthy. Fear not, you can always hire a good short sale Realtor to make sure everything is in order.

Now, if the warm weather is not reason enough for you, then the bargain prices will certainly make you think twice. Last November, median sales price was pegged at $105,600 compared to 2007’s $184, 000.

The Importance of Understanding the Short Sale Approval Letter

After all yours and your short sale Realtor’s hard work, receiving the short sale approval letter is like being handed the winning ticket to the lottery. well maybe not exactly. Before you breathe a sigh of relief, you still have one important thing to do — read and make sure the approval letter contains the right details.

You will be surprised to learn there are plenty of things which could actually go wrong. For one, your name (seller) or the buyer name can be misspelled or worse, completely wrong. There are also cases where the closing date is incorrect, such as the year.

If you think these things are bad, there are also times when the figures in the letter, such as the purchase price and the net amount to the lien holder, are wrong. All these happen because someone decided to simply open an old document in their computer and make a couple of changes.

Obviously, reading the short sale approval letter requires much of your attention. If you are unsure, ask your short sale Realtor or a real estate attorney. Make sure the figures match the figures submitted in your short sale proposal. It would also be a smart idea to ask either your title or escrow company to prepare an up-to-date settlement statement to ensure the figures are still right. With property taxes increasing at a daily rate, checking if the lender has allocated enough is very important.

Lastly, you need to check the lender’s position on the mortgage deficiency. Whether they are waiving their right or going after the deficiency. They may not even give you an answer. You must be prepared for uncertainty. This way, there will be no surprises when the time to close comes. It would be frustrating is the short sale fell through just because you or your short sale Realtor failed to review the short sale approval letter thoroughly.

Buying a short sale, The ins and outs

A lot of individuals today have realized the investing in short sale properties can be lucrative. These homes are usually more affordable, in good condition and sellers who are eager to negotiate prices. It is thus not surprising why the market is currently filled with buyers of short sale properties. If you are one of these buyers, you should understand your role in the entire process.

Contrary to what most buyers think, you should also be involved in the preparation of the short sale package. If immediately you notice problems with the seller and short sale Realtor such as delays in providing documents and non-availability to answer queries, then you should consider another short sale property to buy since you may be seeing the first of many problems.

You can expect the lender to look into your financial credibility and see if you are indeed capable of meeting your end of the contract. It might help if your offer letter comes with a pre-approved mortgage letter or proof of funds. This way, both the lender and seller can see how serious you are about buying the property.

Getting the lender’s nod should not mean all your concerns are over. You actually still have a long way to go. For example, the lender might suddenly change their minds about paying certain fees included in the closing cost. The seller could also fall behind on their utility payments or no longer keep the property clean. Although you might think these are trivial matters, they could still cost you in the long run.

Of course, the worse that could happen is for the seller to change their mind about the short sale. most of the time this happens when a seller files for bankruptcy or decides to try a loan modification instead. This situation could leave you dealing with financing and inspection expenses as well as the reality you need to do everything all over again.

Being involved in a short sale transaction is not for the faint of heart. In order to manage the many things that could go wrong, you need to do your homework or hire a short sale Realtor to help you out.

Negotiating A Short Sale is Tough

… but if you know the secret, it will not really be quite as challenging. Short sale transactions have always been considered to be the best foreclosure alternative available to homeowners who found themselves with underwater mortgages. Unfortunately, the entire short sale process is lengthy and complicated and it will take an expert short sale Realtor to help the chances of your proposal to be approved.

The negotiation with the lender is the trickiest part and at such point, you need to consider the following tips:
The BPO – getting a low Broker Price Opinion is crucial to a short sale especially if you want the property to be sold as soon as possible. For this reason, you might want to get involved in finding the lowest BPO by getting all the facts straight about your home. It would even be a good idea to be present for BPO inspection and point out your proof and explain why a low BPO is justified.

Incomplete Proposal – many sellers make the mistake of submitting to their lenders short sale proposals which lack important documents. Obviously, no lender in his right mind will approve one if you were not able to prove you are truly having financial problems and could not meet your mortgage obligations. Sometimes, lenders also request documents such as a disclosures and you should make an effort to comply with each of these requirements. Not doing so can be quite risky as the lender could cite this is as the reason for rejecting your proposal.

Resale Control – there have been reports of how lenders are trying to incorporate into the short sale contract restrictions regarding the buyer’s decision to resell. You should make sure you read the contract thoroughly and watch out for items like this if you do not want to have problems from such types of restrictions. Lenders actually do not have any right doing this and even title companies will agree with you.

At Least Some Short Sales Are Keeping Realtors in Business

If you look at how the housing market is faring, you might think it is not a good time to think about buying or investing in a property. Surprisingly, in South Florida, buyers are enjoying great opportunities with short sale homes.

According to a recent report, 2010 is a great year for short sale transactions in the region not only for sellers looking for a way out of foreclosure and for buyers looking to buy cheap homes but also for short sale Realtors. And with the entire short sale period shortening, it is clear that deals will be closed much faster and easier.

For distressed borrowers, looking into a short sale to avoid foreclosure is a smart move especially if you can prove your financial hardship. The sooner you acknowledge your problem and see what a great foreclosure alternative a short sale is, then the more time you will have to work with. Of course, the nitty gritty of such transaction can be confusing for some so you might as well work with a short sale Realtor who has the skill and experience required to handle your proposal and work hard to get it approved.

For buyers, there is certainly no better time than now to dip your feet into the real estate buying business. Mortgage interest rates are currently at its lowest, while homes are being sold at rock-bottom prices as more and more troubled homeowners and their lenders agree to sell, even if the price is way below what the owner owes on the mortgage. Lenders have come to realize they will lose more if they proceed with a foreclosure. What is worse is, they are not sure how long the repo property will stay in their inventory and be considered a non performing assets.

If you are interested in buying a short sale home, you need to employ a team of experts who will help you every step of the way. In addition to the short sale Realtor, you will may need an attorney and a home inspector as well. These people should provide you with services crucial to making the right choice.

Let’s face it, How Many of Our Problems Can Be Solved by Outside Agencies?

For troubled residents of Miami-Dade County, good news has come early this New Year. The county has approved the program expansion of its mediation management center, Collins Center for Public Policy. The state-mandated process of mediation will now be including homeowners who are having trouble keeping up with their mortgage payments but have still managed to keep payments updated.

According to the program director, helping homeowners before there is a legal case filed against them by their lender is certainly easier on the part of the mediation center. By bringing both the borrower and lender to the table as soon in anticipation of a more serious problem will most likely result to a win-win situation for both parties involved.

The mediation process usually begins when the homeowner is 65 days late on their mortgage payments. At such point, the lender contacts the center and requests for a mediation. The center then arranges a financial counseling session with the owner. If the parties agree to a loan modification, there will be a trial period of three months and if the owners keep their end of the bargain, then the lender will approve the loan modification permanently. Of course, the terms are different with a short sale or deed in lieu of foreclosure.

A year ago, the Supreme Court of Florida required all foreclosure cases to undergo mediation before repossession. Such ruling covers all foreclosures filed from January 2010 onwards. Judges were also given the discretion to refer old foreclosure cases for mediation, depending on certain circumstances.

Sadly, only 5.6 percent of troubled residents of the county managed to work out an agreement with their lenders based on data compiled by the Office of the State Courts. It would seem there are difficulties getting the homeowners to the mediation table. Only 50 percent of the qualified homeowners were reached and only 35 percent of these reached managed to reach and agreement with their lenders.

When lenders are asked, they point to the borrowers because they cannot be contacted and if the borrowers are asked, they will say they are having trouble getting in touch with the lenders. At present, there are approximately 70,000 foreclosure cases waiting in the Miami-Dade foreclosure court and if the pre-foreclosure mediation offered by the center is not taken advantage of, then this figure will likely soar as more and more homeowners are finding themselves underwater.

New Year Tips for Homeowners Considering a Florida Short Sale

In the past year, a lot of homeowners have found themselves in a scenario similar to millions of homeowners across the nation — way behind on their mortgage payments and the value of their home less than what is owed in mortgage loan. Of course, you can expect the bank to be knocking on your door if you do not do something to stop the foreclosure.

If you are smart, you know there is a simple way out of this mess, albeit a rather lengthy one. Short sale transactions have always been considered to be the perfect alternative to a foreclosure because of three things: it eliminates entire debt, results in less damage to your credit score and you will not have to go through the trauma of foreclosure.

You need to understand short sales can be tricky and so far, only those who have done their homework and prepared their proposals properly were lucky. To improve your chances, heed the following advice:
Be ready for a close scrutiny of your financial life. The lender will need to make sure you are indeed in trouble and not only trying to get out of your mortgage obligation.

Work with a Short Sale Realtor
You need all the help you can get and right now, it is someone who knows the ins and outs of the short sale process. You might be surprised at the many homeowners who got turned down because they failed to submit all requirements.

Prepare for the Future
Whether or not the short sale is approved, you need to start looking for an apartment or a new job in case you might need to move to another city. You will have to do some research especially if you are on a tight budget. This time, learn from the mistakes you made in the past in terms of home purchase and make sure you have planned your new life accordingly.

New Short Sale Requirements

Despite the efforts of the Obama administration in helping distressed homeowners, there are still a lot of individuals and families who found themselves with underwater mortgages and also rejected when they applied for loan modification. The federal government finally decided to extend the Home Affordable Foreclosure Alternative or HAFA program to include incentives to lenders if they approve more short sale transactions.

The problem is ever since the program was launched late last year, only 661 short sales were approved. The Treasury has already spent $4.3 million for the incentives and the outcome was rather disappointing. In order to address such underperformance, the statedepartment decided to amend some of the program’s rules.

For starters, servicers are no longer required to verify the financial status of the borrower and determine if they have a debt-to-income ratio of above 31 percent as compared to their mortgage dues. The programs also no longer requires secondary creditors to agree to be paid 6 percent of the principal amount owed them, as much as $6000. Lastly, lenders are required to respond to the short sale application within 1 month or 30 days.

Among these changes, the last one will certainly be welcomed by a lot of distressed borrowers especially those who were truly qualified but had time against their side. Some lenders might also have trouble meeting this new rule especially if they do not have the manpower to review all the short sale applications submitted to them . On the other hand, the non-verification of the homeowner’s finances, particularly the “hardship” part opens up the program to fraud or scams.

Obviously, the changes made by the Treasury Department are excellent news especially if you consider the 11 million homeowners who are currently underwater or owe more in mortgage versus the value of their home. For certain, many borrowers will become hopeful they could avoid a foreclosure with a short sale.

2010 Short Sales in South Florida Rise 49%

Based on the report from, it seems that short sales are dominating the South Florida housing market. In fact, there is a 49% increase in the tri-county region in 2010 as compared to 2009. 16,800 Broward, Palm Beach and Miami-Dade County houses were bought for amounts less than what the seller owed in mortgage. In 2009, there were only 11,900 sold under the same condition.

Experts believe the rise in short sale activity can be attributed to more and more buyers looking at the South Florida market for cheap homes. With the still sluggish economy, high unemployment rate and under performance of the loan modification program of the federal government, there will be more homeowners turning to short sale as a way to avoid foreclosure. Consequently, there will be a larger selection of short sale homes to choose from and obviously, this is good for buyers.

In addition, lenders have become more willing when it comes to accepting short sale proposals. Compared to going through a costly foreclosure and holding on to the home, a short sale certainly looks like the best alternative. Last year, only 19,800 REOs were sold by lenders down from 21,050 the previous year according to the Florida Association of Realtors.

The decision of lenders to opt for a short sale rather than a foreclosure is actually logical. After all, it takes them 18 months and costs them $100,000 to go through the entire process of foreclosure. In contrast to the $110,900 tag price of a foreclosed property, the average short sale price in 2010 is around $173,700.

Of course, you have to understand a Florida short sale will generally take longer than a foreclosure. Florida figures show a typical short sale home stayed from 195 days in the market before being sold. In 2009, it was 203 days. REOs, meanwhile, took only 44 days to sell on the average, an improvement from 2009’s 64 days.

If you look at the data, you can observe an effort by the lenders to shorten the approval period for short sale proposals. As more lenders get the hang of short sale, homeowners can expect faster results.