Time to Take Advantage of Short Sale Homes

As the summer draws to a close, you can expect more short sales to enter the pipeline with both distressed homeowners and lenders trying to work out an agreement so that both enjoy a win-win situation.
Just to remind you – a short sale is considered to be the best foreclosure alternative as it allows the homeowner to leave the home without much repercussion as a result of mortgage default. On the other hand, more and more lenders are accepting short sale proposals especially since their books are already overflowing with foreclosure inventory, which are considered to be non-performing assets.

The timing is certainly right to consider a short sale.

Lenders are being pressured by the federal government to work with the owner instead of foreclosing and are more likely willing to negotiate.

Sellers are also working double time to have their short sale proposals accepted especially since there is the risk of losing the tax break incentive which is set to expire by the end of the calendar year.

What Sellers Need To Do

For obvious reasons, it is important for a homeowner/seller to make a smart move. Initially, it is necessary to check with their lenders for new short sale guidelines. For example, Bank of America and JP Morgan Chase have actually decided to expedite short sale transactions by prequalifying the homeowners at a price already agreed upon. Such decision has certainly cut the duration for the entire sort sale process. In some cases, the bank even makes an offer to the homeowner just to speed thing up.

Of course, the tax break is incentive enough if you do not want lenders coming after you with a deficiency judgement, which is subject to income tax.

In any case, your chance of getting out of your unfortunate situation in relatively good condition is much better if you hire a professional short sale Realtor.

3 Short Sale Myths Debunked

It definitely is not surprising if you have grown to be familiar with short sale properties. With the real estate industry still suffering from the mortgage debacle, there is still a significant number of homeowners who are hoping to avoid a foreclosure with a short sale.

Times have certainly changed considering it was not long ago when the mere mention of short sale is enough to give someone an anxiety attack. It was not a common transaction and this could probably be the reason why, until today, there are still plenty of myths about short sale.

For your peace of mind, consider the following debunked myths:

1. Buyers interested in a short sale home can simply offer an amount below market value and the lender will accept it.

Although it is true these properties are sold at a discount, most lenders will still look at the home’s appraised value. You have to keep in mind these houses usually do not require major repairs and are only on the market because the owner is upside down on his mortgage. To be able to buy a short sale, you need to make a reasonable offer, one which is based on a comparative market analysis. In lay man’s term, you can simply check similar homes sold within the neighbourhood. Of course, you need to also know the home’s condition.

2. Short sale and foreclosed homes are the same.

Do not make the mistake of thinking these properties are one and the same. For starters, it would be worse to experience a foreclosure than a short sale especially since the former can lower your credit score by as much as 300 points. In addition, your financial credibility will suffer for the next three years. On the other hand, short sale will usually appear in your report as “paid as negotiated”. Although your credit score will still take a hit, it can be as little as 50 points.

3. Buyers who are willing to pay the asking/list price can buy the short sale home.

You have to understand that in a short sale transaction, you need the lender’s approval to be able to buy the home. In some cases, lenders are more than willing to accept short sale proposals but there are also cases when the lender will not approve the proposal because the seller failed to submit all paperwork. This is perhaps the reason many sellers work with a short sale Realtor to improve the chances of getting approved.

5 Short Sale Myths Buyers Should Not Believe

With the increasing popularity of short sales, it is not surprising they are enjoying much buyer interest. Unfortunately, when it comes to short sales, it is not only the sellers who suffer from misinformation. Here are the most common myths buyers might encounter:

Myth #1: Foreclosures are cheaper hence a better investment.

Yes, foreclosures are relatively cheaper but short sales are generally in a much better physical condition. So at the end of the day, you will be paying more for the repair and renovation done on the foreclosed home.

Myth #2: Short sales are a waste of time as lenders choose foreclosure.

This myth has been debunked so many times but many still do not believe lenders are not into short sales over foreclosure. For the longest time, lenders were more willing to initiate foreclosure than agree to the sale of the home for less than its market value. After getting stuck with skyrocketing foreclosure expenses and ballooning inventory, they are now more accommodating of short sales.

Myth #3: Short sale negotiations are adversarial.

Certainly not true as both sellers and lenders are willing to negotiate so everyone will come out a winner in the end.

Myth #4: Making multiple offers is a good idea.

Some buyers think it will help them secure a short sale home but it actually hurts the industry. Consider a situation where a buyer made an offer to 3 sellers and each one has been accepted. The poor seller might lose the chance to avoid a foreclosure when the buyer failed to make good on his offer. For this reason, a lot of sellers require earnest money deposit.

Myth #5: You can buy a short sale home without a short sale Realtor.

It can be done, but it would be really difficult. Besides, many lenders require the buyer to work with a short sale Realtor to expedite the transaction and some even shoulder the commission by as much as 6%.

Winning the Short Sale Approval Waiting Game

For short sale buyers, one of the most challenging parts of the short sale process is the part when you wait to hear from the bank. It can drive anyone insane not knowing what lies ahead for you and your family. In order to avoid getting anxious during this critical period, consider doing the following:

 

·         Move On – there is no reason for you to stop doing the things you usually do just because of the wait. Continue with whatever you have before the owner submitted the short sale proposal. Use this time to do projects you have always wanted to start but never got around to. You will not only avoid feeling anxious all the time, but you also be productive.

 

·         Be Optimistic. Think about the reasons why you are willing to wait. It could be because of the bigger rooms, the great location or the amenities. Whatever it is, you know the wait is worth it.

 

·         Avoid hounding your short sale Realtor. You should not be calling your Realtor every hour, inquiring about the approval. The only reason why you should contact him is if you have to clarify something regarding the process.

 

·         Set a goal for each 30 days. Since a short sale takes an average of 90 days to get approved, you should probably consider setting goals or targets for each of the 30 days. It can be something as simple as exercising everyday or something more challenging such as learning to play a guitar or a new language. You will be surprised at the many options available.

 

The short sale approval waiting game is certainly tough to play, but with the right attitude and some imagination, you will not notice the days passing you by.

Why Buying a Miami Short Sale Home Makes Sense

Buying a Miami short sale home, or any home for that matter, requires much work. After all, it is an investment and a serious one at that. If you are looking at Miami short sale properties, you have to consider these homes involve a whole different kind of buying process. You might ask yourself, in the course of the homebuying, if these properties are worth your time, attention and most of all, money.

Well, the fact is they are. Here are just some of the reasons:

1.       Buying a Miami short sale means getting a good deal for the home. This is because you will pay below the home’s current market value which essentially means savings and instant equity for you.

2.       There is less competition because not all buyers are qualified and willing to go through the entire process. Keep in mind lenders must agree or accept the short sale proposal which contains your offer.

3.       Miami short sale properties are generally in a much better condition than a foreclosed property since majority of them are still occupied.

4.       Many lenders these days are much more accommodating of a short sale. This is because they have found out the hard way foreclosures are much more expensive to process. In addition, they do not have to worry about holding costs and selling the property.  Another reason for their growing partiality to short sale is the improved guidelines which was the result of the growing popularity of this transaction.

5.       A new breed of Miami real estate agents referred to as short sale Realtors are now available to assist you. They would be able to ensure the entire process will be efficient and speedy.

As always, you need to have all the information about the short sale property at hand so you can make an informed decision. Do your homework and make sure you do due diligence

3 Simple Steps to a Successful Fort Lauderdale Florida Short Sale Purchase

Homeownership remains to be the greatest American dream. But for many, budget is a serious consideration and most opt to let go of this dream. However, there is a way to work around your financial constraints without having to sacrifice your preferences. You can always choose to consider purchasing a Fort Lauderdale short sale home.

Fort Lauderdale properties being sold via short sale are certainly a lot cheaper since the seller would like to sell due to mortgage payment problems. All it takes is for the lender to agree to the short sale and the home can be yours. This is obviously easier said than done, since you need to make sure you come up a winner in the end.

As a Fort Lauderdale short sale buyer, follow these three simple steps:

Pre-offer Inspection – make sure you check the condition of the home in order to know what you are getting into. You need to remember the homeowner might have trouble with the maintenance of the home so you need to know if you will be spending extra money on repair.

Making a Reasonable Offer – after the inspection, you also need to check out the other homes for sale in the area to see how much they are selling for. This is what is referred to as making a comparative market analysis. It is effective in helping you come up with a reasonable offer, which is crucial if you want the lender to approve the short sale proposal.

Waiting for Lender Approval – you have to be ready to wait for some time since most lenders take a long time in coming up with a reply to the proposal. The reply could be a yes, no or counter offer. Be prepared for whatever the outcome is. This will certainly speed up the transaction and before you know it, you are the proud owner of your very own Fort Lauderdale home.

If you would like to have someone assist you throughout the entire short sale process, be sure to hire the services of a professional short sale Realtor in Fort Lauderdale.

Some Words of Advice to Short Sale Buyers

Homebuyers who choose to take advantage of the perks associated with the purchase of short sale property should accept from the very start the entire process can be one long ordeal. Why, because, at the end of the day, it is the lender who has the final say.

Be that as it may, it does not mean you cannot control the other aspects of the short sale buying process. But in this case, taking control does not mean doing the job of the short sale Realtor or annoying the seller with repeated phone calls. It simply involves getting involved.

It would not hurt to express your intention to help out. If you have a strong financial background, you can even lend your expertise in the preparation of the financial documents or even the hardship letter. If you want, you can focus instead on your reaction to the lender response. For instance, if the lender approves the short sale, you should be ready to move into your new home. As you know, moving can be quite an ordeal so you need to be sure you are prepared for this.

You also need to be ready if the lender makes a counter offer or decides to approve the proposal on the condition they will not waive the deficiency judgment and ask the seller to contribute. If the seller decides to walk away because of this, you may be looking elswhere. Of course, there is also the chance the lender will flat out reject the proposal. In this case, you need to have a back-up plan a well.

As a buyer, you may be surprised at the myriad of things you need to consider and think about. It is the only way you do not get caught unaware like a deer in headlights. Talk to the seller or the Realtor if you have concerns. Being open about any issues you might have will help you deal with them more effectively.

Avoiding Short Sale Delays


It is understandable for first time home buyers to look into short sale properties since they are certainly much more affordable than newly-built homes and in much better condition than foreclosed properties. But, the HousingPulse Tracking Survey from Campbell revealed that the number of first time homebuyers buying short sale homes has declined consistently in the past three months to 39.7 percent of the total short sale transactions from its peak of 54.1 percent recorded in November 2009.

The possible reason for the drop in short sale purchases is the delays, usually due to sloppy paperwork. Time and again, it has been said how important it is to make sure your short sale proposal does not give the lender any reason to reject it — even a small one.

So, how do you avoid this short sale hurdle? By making sure everything is in order:

Financial Documents – this would include all pertinent documents which will support your claim of financial hardship such as your statement of assets and liabilities, unpaid utility bills, income tax return, delinquent notices from other creditors and pay slips.

Buyer Offer – you have to keep in mind the offer should not only be reasonable but justifiable as well. It would help if you or your buyer has conducted a Comparative Market Study to show how much the other homes in the area were being sold for. The buyer should be able to also show he can afford to buy the property by showing proofs of financial capabilities and if possible, a pre-approved letter from a mortgage lender.

Hardship Letter – this is possibly the simplest but the trickiest part as you will have to make the lender see your situation without sounding like you are not telling the truth or exaggerating your circumstances. It would help if you would be specific with the details and make sure the related document supporting such particular claim will be submitted as well. Without these shreds of evidence, your letter will merely look like a fictional story.

It Always Comes Down to Short Sale VS Foreclosure

The number of distressed borrowers in Florida continues to grow as lenders finally start going through their shadow inventory. With the sudden surge in foreclosure-related activity, more buying opportunities are being created.

Buyers will ultimately have to choose between buying a foreclosed property and a short sale home. If you too have been straddling the fence and unsure which to choose, consider each of their advantages and disadvantages.


Short Sale Properties

Although sometimes more expensive than a foreclosed home, most short sale houses require less repair work since the owners are still occupying the property. This means they are usually in a much better state and you would not need to shell out much money to make it habitable.


Now, when it comes to the process involved, it could take anywhere between 6 weeks to 6 months for a short sale transaction to be completed. The length usually depends on how well you have prepared your short sale proposal. These days, many lenders readily approve such proposals in order to reduce the number of homes in their REO inventory. One helpful tip is to work with a short sale Realtor for their experience and knowledge about the process.


Foreclosed Homes

If budget is a consideration, repossessed properties are certainly more affordable but, you have to think about the repair costs. If the home has been vacant for some time, you may expect it to be in a potentially more dilapidated state. Worse, it could have succumbed to mold infestation or attracted wild animals or even vandals. You might have to shell out a lot of money before it becomes livable.


In terms of the buying process involved, buying foreclosures is relatively straightforward. But in the past couple of months, lenders have been embroiled in controversies amidst claims of wrongful foreclosures as a result of sloppy documentation. Buyers will have to do their homework if they want to buy these properties in order to avoid problems in the future.

Florida Short Sale Primer for Buyers


Investing in distressed properties these days is certainly becoming popular as evident in the increasing number of short sale properties taken off the market during the first half of the year. This should not come as a surprise since these homes offer the chance of homeownership at a much more affordable price.


Now, for first time buyers interested in short sale homes, it would be a good idea to familiarize yourself with these homes, the process involved and even the people you will be dealing with. By doing so, you are aware of what to do and what to expect.


What is a Short Sale?

In real estate, a short sale is considered to be a strategy to help an underwater homeowner stay out of foreclosure by selling the home at an amount which is less than the remaining mortgage balance. Underwater essentially means the homeowner is already suffering from negative home equity. The said sale should naturally be approved by the lender since they are the one who will suffer the loss.


How does it work?

Typically, the homeowner will have to find a buyer who is willing to pay the asking price. The buyer’s offer along with the other short sale requirements will be submitted to the lender, who can choose to accept or reject the offer or make a counter offer. In many cases, the seller works with an experienced short sale Realtor in order to increase the chances of the proposal getting approved by the lender.


If the offer is accepted, everyone involved proceeds to the closing table. Typically, the lender pays for the closing costs and real estate commissions. Depending on the initial agreement, the homeowner may or may not pay the difference between the mortgage debt and the proceeds of the sale. It is within the rights of the lender to obtain a deficiency judgment.


In addition to the short sale Realtor, you might also want to work with a real estate attorney to understand the impact of the sale on your tax return and other technicalities which might arise.