Underwater and Considering a Florida Short Sale?

The declining home prices have certainly taken a toll on many homeowners. For those who are experiencing difficulties paying their mortgage dues, finding out they now owe more in mortgage debt compared to the value of their home is certainly troubling. What these homeowners need to do is to stop worrying, think about a short sale and take action. Here are just some of the things to consider:

Tell A Friend. Being underwater is not something new these days and you will be surprised with how many individuals and families are experiencing the same problem as you are. If you open up your problem to a friend or another family member, they might provide you with all the help you need including giving you a loan and recommending a real estate attorney or agent. Keeping things a secret will also add to your burden, so open up and share your worries.

Continue with House Payment. Unless you are really broke or bankrupt, try to continue paying your mortgage obligations. Keep in mind even if you managed to get a short sale approval, there is still no guarantee your lender will give up their right to a deficiency judgment. A short sale should be your last resort.

Hire a Short Sale Realtor. Not all agents are experienced and skilled with a short sale and you need to hire one who knows what he/she is doing and will not waste your time. Since you need to stop foreclosure and get out of this mortgage mess, you will need all the professional help you can get. A good short sale Realtor will make things easier and simpler for you. I recommend hiring or working with a Realtor who provides an attorney for free, like we do.

Although you have other options to avoid foreclosure, you need to understand why a Florida short sale is a much better solution for your situation. It might be complicated but you will certainly be better off, in terms of credit score.

Short Sale: Back to Basics

Although many of you have heard about short sales as a means to avoid foreclosure, not everyone is clear about what it really is. In order to provide you with a clear idea about this very effective foreclosure alternative, simply check out the basics.

What is a short sale?
In a short sale, the owner asks the lender to approve the sale of the property for an amount that is less than what the owner owes in mortgage debt. The premise, obviously, is the home is worth less than what it was originally purchased for and the owner now suffers from negative equity. The lender will have to agree to the short sale proposal based on calculations involving losses to be incurred in a short sale vs a foreclosure. Most of the time, the lender agrees after reviewing everything, a short sale will cost less than a foreclosure.

Financial Difficulties
In addition to asking the lender formally, the owner needs to prove to the lender that he or she is no longer capable of paying the mortgage debt. At this point, the owner needs to cite the reasons for his inability such as divorce, loss of job and unemployment. Financial documents will be submitted along with the so-called hardship letter, wherein details of the financial difficulties will be explained further. In many cases, the lender no longer goes after the difference between the mortgage debt and the sales proceeds if they are convinced the owner is really in the red.

Looking for a Buyer
An important key to the success of the short sale is finding a buyer who will make a reasonable offer for the home. A reasonable amount is somewhere between the mortgage balance and the current value of the property. It would certainly be great if the buyer pays in cash but if not, it would suffice if he shows a pre-approved mortgage application. This way, you can be sure that the buyer can pay for the home.

If you are considering a short sale, you can see for yourself, based on the above information, if it is really the right option for you. If you are still unsure, talk with a short sale Realtor and he or she will help you find out if you are a good candidate for this option.

75% of Orlando Homes Sold Are Distressed Properties

Based on the figures obtained by the Orlando Regional Realtors Association, only 25 percent of the total home sales in January involved traditional sellers. This means 75 percent of the home sales involved distressed properties including short sale and repo homes.

Experts believe the reason behind the huge difference can be attributed to the lower than average prices of these distressed homes. For example, a regular home will be put up for sale at $145,000 while a foreclosed home will be sold for just $94,500. Now, for more savings, a buyer might check out a short sale home which can sell for as low as $75,000.

Latest data from the ORRA revealed a 26 percent increase in condo apartment sales last January compared to a year ago. Also, the inventory has declined by 9.5 percent. Both figures could be pointing to a market recovery, albeit a small one.

Delinquency rates have also been at their lowest since the meltdown and for some experts this could be another sign the housing industry is slowly getting back on its feet.

A lot of Realtors are also taking advantage of the many distressed sellers by targeting developers and negotiating bulk discounts. The properties are marketed as vacation homes and the agents usually look for buyers and investors who are also looking to take advantage of the huge discounts.

Of course, buyers are advised to be careful when making an investment. Even though market conditions are favoring buyers and everything is pointing out to the market bottoming out, it would still be best to adapt a “buy and hold” strategy. In simpler terms, you should buy a short sale or foreclosed home, preferably pay for it in cash, and become a good landlord until the time is right for you to sell the property for a profit.

To choose the perfect Orlando property, you need to hire the services of a professional short sale Realtor.

Florida Short Sale: the Better Choice

Homeowners looking for a way out of their mortgage mess know there are several options available to them. For starters, you can choose to discuss with your lender the possibility of a loan modification in order to keep your home. Of course, if you discovered you can no longer afford your home, you can opt to negotiate a deed in lieu of foreclosure or a short sale.

Better Option
Among these options, Florida short sales have proven time and again why it is the better option. First of all, your creditors will see how you have tried to take charge of the situation and not simply wait until the home is repossessed and taken away from you. Such character will also prevent the addition of a foreclosure entry on your credit history. A negative entry can wreak havoc to your credit score and as you know, credit score is everything. These numbers will show your financial credibility.

Better Choice
On the part of the lenders, short sales are also fast becoming the better choice as the housing market is being filled with more foreclosed properties with each passing day. The bigger their inventory of real estate owned properties, the more non-performing assets they acquire. If they choose to accept a short sale, they get to recover a significant percentage of their money plus they do not have to deal with a ballooning repo home inventory.

Better Investment
Home buyers and investors are also looking at short sale homes to be the better investment. These homes are cheaper than other existing homes for sale and definitely look better than abandoned foreclosed properties. Also, they get to transact with the owners or the owner’s short sale Realtor themselves which means they would have an easier time negotiating. Although the lender is the one who gives the final approval, short sale transactions are generally faster than foreclosure sales especially if the short sale Realtor knows what needs to be done and submitted. One must do their due diligence to ensure a hassle-free transaction.

Sales of Distressed Properties Growing as Buyers Look for Bargains

The Florida housing market is currently showing a trend where buyers prefer to buy properties in distress such as short sales and foreclosures because of the bigger savings they get to enjoy. In fact, the state’s existing homes sales activity reveals at least 20 percent of the total sales involve short sale homes. As long as there are foreclosure homes adding to the housing inventory, this percentage will likely continue or even rise.

Foreclosures VS Short Sales

More and more lenders are discovering the advantages, in terms of costs, short sales offer compared to foreclosures. It is no longer a secret that short sales can save lenders by as much as $20,000 and it will not take as long especially if the short sale proposal is complete and well-prepared, the buyer is willing to pay in cash and the offer is reasonable. Lenders will close deals as quick as they can, whatever this means to them.

Aside from this, lenders are no longer worried about the up keep of the distressed home and its sale. Owners of short sale properties are the ones who will look for buyers so all the lender needs to do is approve the short sale proposal and accept the offer. It is clear that short sales entail less work for lenders.

From the buyer’s perspective, it is better to buy short sale properties because they are generally in much better shape. Most of the owners of these homes suffered from underwater mortgages or they now owe more in mortgage debt due to the declining value of their home. In any case, the houses are still in good physical condition and will likely require few repairs.

If you are interested in selling your home via a short sale or buying a short sale property, it would certainly be a lot simpler if you work with a short sale Realtor. A Realtor’s knowledge about this kind of transaction will certainly benefit the seller in the long run.

Why Cash Buyers Are Looking Into Florida Short Sale Properties

The housing market, despite its enduring problems, is certainly benefiting from a new trend these days — cash buyers. More and more markets are being swept by this trend especially regions where short sale properties are in abundance.

So why is cash (buyers) king these days?

Cheap Prices

For starters, the local housing market is brimming with foreclosed and short sale properties, all of which are priced lower than other non-distressed properties. In fact, there are homes sold at half their current market values which mean almost instant equity for home buyers. If you are paying cash then you certainly want to maximize what your money can buy.

Plenty of Choices

Home buyers are certainly pleased with the large selection of cheap short sale and foreclosure properties to choose from. The enduring housing crisis and sluggish economy has dragged home prices down so low that thousands of homeowners across the state are currently underwater. This means most owe more in mortgage compared to what their home is currently worth in the market. Most of these homeowners would prefer selling via a short sale transaction than let the bank foreclose. Cash buyers definitely has the advantage since sellers would want to choose you instead of taking an offer from another buyer who will still look for financing to make the purchase.

Banks Are Pushing Short Sales

This leads us up to the last reason why short sale properties are attracting cash buyers. Lenders have finally realized that short sales are better than foreclosing — it’s faster and cheaper for them in the long run. Most hesitate if the buyer will be getting a loan to finance his purchase but if the buyer pays in cash, you can count on the lender to approve the short sale proposal quickly.

Cash Sales Dominate Foreclosure and Short Sale-Filled Markets

As home prices in Florida continue to fall, more and more investors and home buyers are getting off the sidelines and taking advantage of the opportunity to buy a cheap home. But what is surprising is that cash buyers are actually dominating the housing market.

A report from the National Association of Realtors showed that 28 percent of the residential sales in 2010 involved cash deals. In 2009, it was just 19 percent. in Florida, the percentage is certainly higher with over 50 percent of the residential sales transaction involving cash buyers.

Realtors believe that there are several reasons why many home buyers are choosing to pay cash. For starters, such transaction entails a smoother process. The limited credit available to these buyers and the faster and bigger ROI are also factors which would entice buyers to pay in cash.

It is therefore not surprising why a lot of these cash buyers are attracted to areas where there are plenty of distressed properties such as foreclosure houses and short sale homes. Obviously, the main reason for this is the affordability of these homes compared to other homes for sale.

In Daytona Beach, 2,510 or 56.2 percent of the 4,461 homes sold in 2010 involved cash payments. The previous year, it was just 48.26 percent. According to the Daytona Beach Area Association of Realtors, paying in cash is fast becoming the trend considering the difficulties involved in financing.

Most of the cash buyers are investors who are looking to take advantage of the bargain prices which can sometimes be half of the home’s market value or reflect home values of 2003. There are few first time homebuyers although more and more retirees are doing the same thing. Florida is still on the top of the list for most people contemplating retirement and the large selection of affordable homes make it even more attractive.

Reference: http://www.news-journalonline.com/news/local/east-volusia/2011/02/28/cash-rules-market-for-area-residential-sales.html