3 Short Sale Myths Sellers Should Not Believe

As you consider avoiding a foreclosure with a short sale, you will not help but feel worried about the many things you might be hearing about this transaction. The world of short sales is certainly as complicated and confusing as you think and navigating it with an expert short sale Realtor is the only way to go. Of course, knowing the truth about certain myths can help as well.

Myth 1: Lenders Prefer Foreclosures Over a Short Sale

You will be surprised at how most lenders these days are more open to a short sale proposal primarily because it will save them more money in the long run. In addition, the federal government is even encouraging lenders to consider a short sale first before initiating foreclosure, especially if the homeowner is qualified.

Myth #2: A Short Sale is Only an Option for Delinquent Borrowers

This particular myth used to be a fact, but with the collapse of the mortgage industry, many homeowners have found themselves underwater on their mortgages. Also, lenders are already suffering from a huge inventory of foreclosed properties and would not want to add to it, which makes them open to short sale proposals, even if the borrower is current on their mortgage payments. As long as the homeowner can provide proof of their financial difficulties and insolvency, a short sale is an acceptable option.

Myth #3 Most Short Sales Never Get Approved

This, of course, is certainly not true especially if you look at the last couple of months when there was a significant increase in the number of short sale transactions. The process is actually straightforward. You simply need to comply with all the client requirements and find a buyer with a reasonable offer. Certainly, your chance of getting approved is greatly increased with an experienced short sale Realtor by your side who will guide you every step of the way.

Qualities of a Good Short Sale Realtor

Just like in any other industry, there are times when the mistakes of a few damage the general image of the many. In the case of short sales, there is a growing number of short sale Realtors who are doing the industry more harm than good.

 

If you are in the market for someone who can help you sell your home via a short sale, consider these following qualities:

Ø  Knows all about your rights as a seller. It is crucial your Realtor is updated with relevant legislations or laws involving homeowner’s rights. After all, you will be hiring them to protect your interest and this would be challenging for them if they are not aware of such laws. Please understand a Realtor is not an attorney so you should always seek legal counsel but, a Realtor’s knowledge about past experience can help you understand the pros and cons.

 

Ø  Patient and Diligent– a good short sale Realtor understands the complications associated with the short sale process and is willing to play the waiting game. Your Realtor should not tire of communicating with the seller, buyer and lender, sending out follow-up letters and making appointments or setting up meetings.

 

Ø  Accepts limitations – contrary to popular belief, a good short sale Realtor should be able to accept their limitation and not come off as a know-it-all. Being able to say “I don’t know” or “I’m not sure” is actually a good thing as long as there is the openness to ask someone who is more knowledgeable or experienced. For example, when certain legal issues arise, a good Realtor will refer to a real estate lawyer instead of trying to address it by himself without doing any research.

 

In many cases, a short sale’s success relies on the experience and expertise of the short sale Realtor. So if you are serious about avoiding a foreclosure, do your homework and find a Realtor who will be an asset and not a liability.

Writing the Florida Short Sale Qualification Letter

It is not unusual for Florida short sale Realtors to ask troubled homeowners considering a short sale to write a qualification letter. This document actually serves as the cover letter of the short sale proposal and contains a brief explanation on why you should be considered for a short sale.

What to keep in mind:

Be acceptable of your circumstances. Your lender might be more than considerate if your letter shows accountability. After all, everyone can make a mistake and in your case, a financial hardship is not really something which has no way out. By accepting your situation, you come off as a mature and responsible individual.

Say it directly. A Florida short sale qualification letter should be direct to the point. There is actually no room for “drama” and you can leave that to the Hardship Letter. Just think of it as writing an essay wherein you focus on the highlights of the problem leading you to your current situation. Avoid flowery phrases and be as honest as possible.

Tell it like a story. Although you need to be straightforward and brutally honest, it does not mean you will have to put the lender to sleep. Make sure you fill up the gaps in your story, so the lender will have a clear picture of your situation. For instance, explain the circumstances of your job loss in such a way the how, why, when and what questions of the lender are addressed. Leave no room for guessing.

When writing this Florida short sale qualification letter, you need to remember what you are asking for is actually a privilege, so you need to be polite and humble. You are actually appealing for a chance to avoid foreclosure and coming off as demanding will not help your cause.

 

Florida Short Sale: the Most Effective “Exit Strategy”

One of the worst things that could appear on your credit report is a Florida foreclosure entry. It will certainly tarnish your credibility and would make it difficult for you to take out loans or even apply for credit cards. For this reason, many distressed homeowners in Florida are looking at short sale as the best exit strategy.

If you are not familiar with the premise of a short sale, it is actually a real estate transaction wherein the lender agrees to accept sale proceeds of the mortgaged home with an amount less than the actual mortgage balance. By going through this route, you have more control of what is happening and will most likely suffer minimally, in terms of your credit history.

What is great about applying for a Florida short sale these days is the oversupply of foreclosed properties, forcing more and more lenders to accommodate short sale proposals because they are generally cheaper to process. In addition, the home is taken off the market and the lender need not worry about holding costs and finding a buyer.

In addition, a Florida short sale home is so much easier on the neighborhood, since it is not unusual for the homeowners to continue to reside at the house until the entire process is completed. This means the home will not likely fall into disrepair.

Of course, troubled homeowners need to realize Florida short sales are not without risk. There is always a chance the buyer will walk away or the proposal is rejected. Also, it is not guaranteed the lender will not come after you for the deficiency judgment. In order to manage all these, you should consider working with a professional or professionals such as a short sale Realtor and a tax attorney. It is always a smart decision to work with these people because they can give you sound advice.

Overcoming Common Florida Short Sale Problems

 

For Florida homeowners considering a short sale to avoid foreclosure, you need to know this transaction could be riddled with hurdles and challenges. The best way you can overcome these obstacles is by being aware of them and learning how to address them. Consider the following Florida short sale problems:

 

1.       Lack of Hardship – many Florida homeowners make the mistake of thinking they owe more in mortgage debt than what their home is currently worth in the market, they can easily apply for a short sale. You have to understand the lenders will want to look at your current financial status. If it remains to be the same compared to the day you got your mortgage, chances are your short sale proposal will be rejected. You need to show the lender you are no longer capable of paying your mortgage debt. This is the function of the hardship letter, wherein you write how you got into the financial mess you are in, the options you have explored to address this mess and even the outcome of your efforts.

 

2.       Multiple Loans – another Florida short sale problem would involve having several liens attached to the property’s title. Essentially, second lenders can pose a problem as they may not be willing to agree to a short sale. You have to make them realize a short sale is the only way they can recover some of their losses. It would be a good idea to discuss payment arrangements with the second lender if they don’t accept the immediate payoff. There is the option to ask the first lender to pay the second lender or pay the second lender thru the closing costs.

 

3.       Release from Liability – your Florida short sale Realtor should be clear about your position on a deficiency judgment. Your short sale proposal should contain a request for the judgment to be waived to release you from any obligation to pay the difference between the sale and the mortgage debt.

Overcoming Short Sale Obstacles in Florida

As a homeowner in Florida, the decision to sell your home via a short sale transaction could be one of the most difficult decisions you will ever make, especially if you think about the likelihood of running into certain short sale obstacles. However, you have to accept the fact a Florida short sale is your best foreclosure alternative and with the assistance of an experienced Florida short sale Realtor, you could actually overcome these obstacles.


Here are the most common obstacles Florida homeowners encounter:


Incomplete Documents/Requirements

If you are not familiar with a short sale, you should know it is a real estate sales transaction which requires the approval of the lender. This is because the lender has to agree to accept the proceeds of the sale, the amount of which is less than the mortgage owned on the property. Such approval can be obtained if you manage to submit all the necessary documents to prove to the lender you deserve their thumbs-up or approval. The items include income tax returns, pay slips, statement of assets and liabilities, utility billings and credit card statements and of course, the hardship letter, which details the circumstances why you could no longer pay your mortgage.


Lack of Buyer Interest

Even with all the required documents ready, you will still need to submit a legitimate offer. Finding a buyer for your home in Florida is also challenging, especially since the wait time could be months to hear back about a counter offer or acceptance from the seller’s lender. The trick is to generate as much buyer interest as you and your Florida Realtor can. Conduct open houses and make an effort to spruce up the place. Improve curb appeal by applying fresh coat of paint and mowing the lawn. Also, you have to make sure you are asking a reasonable price for your home. Sometimes fixing the home up is not an option, since finances do not make this possible. If this is the case there is nothing one can do other than clean it up.


Long Wait for Approval

After preparing all documents and securing a buyer, the hardest part would be the waiting. Your Florida short sale Realtor should keep communication with both the lender and buyer open in order to make sure the short sale will push through. Make an effort to update all your documents in case the lender would want the latest data/information.  Last of all, good luck!

Going Back to Short Sale Basics

To avoid foreclosure, a homeowner needs to explore all options available and try to determine which one will work to their advantage. Among the many options available, a short sale has proven to be quite effective not only in terms of stopping foreclosure but also in protecting your credit. Of course, before you choose this option, you will need to be familiar with the entire process involved in order to understand what you are getting into.

For the unfamiliar, here are some of the short sale facts you need to learn about:

  • Short sale transactions involve the lender approving the sale of the distressed property at an amount less than what is owed to them.

  • Homeowners with underwater mortgages, or owe more in a mortgage compared to the home’s equity, usually choose to sell via short sale.

  • A buyer’s offer is submitted together with the other short sale requirements, subject to lender review. The lender can choose to reject, accept or make a counter offer.

  • A short sale proposal includes all documents which support your claim of financial hardship such as income tax returns, statement of assets and liabilities and even pay stubs. You also need to submit a hardship letter, wherein you will explain in detail the circumstances which resulted to your decision to sell your home via short sale.

  • Short sales can be lengthy and complicated so, you need to make sure all lines of communication are clear in order to avoid delays. Work with a short sale Realtor and take advantage of their expertise and experience.

  • Buyers can suddenly change their minds especially if the lender does not respond quickly to the proposal. It is best to reassure buyers and keep them constantly updated.

  • More and more lenders are choosing a short sale over foreclosure because they incur fewer expenses. Homeowners should take advantage of this and make an effort to submit a complete proposal so lenders will have no reason to reject them.

Banks Becoming More Realistic, Approving More Short Sales

Banks Becoming More Realistic, Approving More Short Sales
A foreclosure tracking firm has reported at least 12 percent of the total home sales in the US during the second quarter of the current year were mostly short sale transactions. This figure was 2 percent more than what was recorded in the first quarter, which indicates lenders are trying to clear their inventory of distressed properties and reducing the number of homes ending up as REOs.
The latest figures are also showing lenders are becoming more realistic about short sales. It is the only foreclosure alternative which allows a win-win situation for everyone involved — the homeowner avoids foreclosure, the buyer manages to buy a home in much better condition and the lenders incur less costs and recover more compared to a foreclosure. Of course, the general public also benefits since there are fewer foreclosed homes entering the housing market.
In addition, the number of days it takes pre-foreclosure homes to sell has also decreased from 256 days to 245 days. Hopefully, lenders make their processes more streamlined and efficient so more short sales are approved and completed. As you know, there are many cases wherein the short sale buyer walks away from the transaction because of the long wait.
What Homeowners Should Do
For distressed borrowers, a short sale transaction can actually represent a way out of the mortgage mess you are in. Just keep in mind it requires the consent of the lender, which means you need to comply with all their requirements. For this reason, it would be practical to hire a short sale Realtor, especially one who is experienced and knowledgeable about the entire process. Such qualities will help maximize efficiency and almost guarantee lender approval.
A short sale transaction can be lengthy and complicated, which is why you need to be patient. The key is to keep all lines of communications with the Realtor, buyer and even lender clear in order to respond quickly and accordingly.
The good news is more lenders are approving short sales — as long as everything is in order.
Reference: http://www.bloomberg.com/news/2011-08-25/home-short-sales-jump-in-u-s-as-banks-more-realistic-on-property-market.html

A foreclosure tracking firm has reported at least 12 percent of the total home sales in the US during the second quarter of the current year were mostly short sale transactions. This figure was 2 percent more than what was recorded in the first quarter, which indicates lenders are trying to clear their inventory of distressed properties and reducing the number of homes ending up as REOs.

The latest figures are also showing lenders are becoming more realistic about short sales. It is the only foreclosure alternative which allows a win-win situation for everyone involved — the homeowner avoids foreclosure, the buyer manages to buy a home in much better condition and the lenders incur less costs and recover more compared to a foreclosure. Of course, the general public also benefits since there are fewer foreclosed homes entering the housing market.

In addition, the number of days it takes pre-foreclosure homes to sell has also decreased from 256 days to 245 days. Hopefully, lenders make their processes more streamlined and efficient so more short sales are approved and completed. As you know, there are many cases wherein the short sale buyer walks away from the transaction because of the long wait.

What Homeowners Should Do

For distressed borrowers, a short sale transaction can actually represent a way out of the mortgage mess you are in. Just keep in mind it requires the consent of the lender, which means you need to comply with all their requirements. For this reason, it would be practical to hire a short sale Realtor, especially one who is experienced and knowledgeable about the entire process. Such qualities will help maximize efficiency and almost guarantee lender approval.

A short sale transaction can be lengthy and complicated, which is why you need to be patient. The key is to keep all lines of communications with the Realtor, buyer and even lender clear in order to respond quickly and accordingly.

The good news is more lenders are approving short sales — as long as everything is in order.

Reference: http://www.bloomberg.com/news/2011-08-25/home-short-sales-jump-in-u-s-as-banks-more-realistic-on-property-market.html

Patience Pays Off in Short Sale

The greatest mistake a homeowner can make when faced with the possibility of foreclosure is to think there is no way out. Even if your situation seems hopeless, you will be surprised to learn there is actually an effective solution available. Many distressed homeowners today have managed to avoid a foreclosure by applying for a short sale.

In simple terms, a short sale allows the homeowner to sell the property at an amount less than what is owed on the property, with all the proceeds of the sale going to the mortgage lender. Such transactions obviously require the approval of the lender.

Before the mortgage collapse, short sale transactions were not as popular but, with the decline in home values and the sluggish economy, it has become the go-to- solution for many homeowners hoping to avoid a foreclosure. Even lenders are choosing short sales over foreclosure becuase it means netting a better recovery and avoiding foreclosure-related expenses. In Florida, the cost can skyrocket considering it takes a minimum of 135 days for the judicial foreclosure to be completed.

What a Short Sale Requires

Distressed borrowers who are considering a short sale should understand it will take a lot of patience. For starters, you need to find a short sale Realtor who understands the process and can provide you with expert advice and tips. You need to be patient in providing the necessary documents as well as communicating with the Realtor if you want the property to receive offers.

There is also the “selling” period when you need to find a buyer who is willing to wait for the lender approval. You will have to show your home to potential buyers and be available to answer their inquiries as well.

Of course, negotiating with the lender can be tricky. You should expect the lender to make a counter-offer since they want to recover as much of their investment as they can. It would save time if you do a comparative market analysis to justify your selling amount or your acceptance of the buyer’s offer. In the past couple of months, more and more lenders have been fast-tracking these short sales in order to prevent their inventory of repossessed properties from ballooning.

Once you have the lender approval, there is certainly nowhere else to go but uphill. Everything will fall into place and you can focus on moving on and finding your feet.

Chase Offers More Reason to Choose a Short Sale


One of the financial giants, JP Morgan Chase has an offer to distressed homeowners they cannot resist. If you are one of these unfortunate homeowners, all you need to do is to agree to a short sale and in exchange, you will be given as much as $20,000. Not only this; but the difference between the sale and the mortgage owed to them will be forgiven. The promised cash will be released after the sale.

Chase has decided to offer such incentive after realizing that foreclosing a property will cost them more in the long run. In Florida, the entire foreclosure process can take as long as two years and Chase would have to spend money on court and attorney costs as well as maintenance of the repo home such as property taxes. By offering this incentive, they will also manage to remove these bad loans from their books.

Obviously, the homeowners and their short sale Realtor will benefit most from this incentive. There is still the matter of the taxes on the amount forgiven since it will be considered as income. Still, compared to a foreclosure, this deal is generally better.

Another reason for homeowners and their short sale Realtors to grab this offer is the fact Chase is willing to provide a reply to the proposal within 40 days. Typically, short sales could take as long as nine months before it sees daylight.

Since 2009, the financial giant has closed over 100,000 short sale transactions and is working hard to approve more as well as cut down the processing period. Florida is currently overwhelmed with the 300,000 foreclosures in its inventory of homes for sale and many more homes are on the verge of default. Clearly, this incentive is a heaven-sent and should be taken advantage of if you are serious about avoiding foreclosure.


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