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.

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.

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%.

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.

 

Short Sale Strategy: How to Attract Lender Attention

In the world of short sale, everything actually depends on the approval of the lender. As a short sale Realtor, your hard work will be wasted and you cannot claim success if the lender rejects the proposal.

So how do you increase the chances of the short sale application getting accepted? Make sure you attract the attention of the lender — for the right reasons.

Consider the following tips:

1.       First of all, you need to make sure every pertinent document is included in the short sale application and all lender requirements have been submitted.

2.       Be nice when dealing with the lender or any of their representatives. You do not want to be remembered for the wrong reasons.

3.       Establish solid relationships by responding to the lender’s inquiries promptly and being professional the whole thing. Keep in mind, a short sale actually benefits the lender as well so if you establish yourself to be a good Realtor, your short sale applications will most likely be taken seriously as well.

Dealing with the Seller

Aside from attracting the right kind of attention from the lender, it is also important you work well with the seller. After all, it is their home which you are trying to sell via a short sale transaction.

Keep in mind you are there to make sure the rights of the sellers are not violated and their interest is upheld. Seek attorney advice when necessary.  You still have to know the rights of the lender as well and make sure every decision considers these entitlements.

When things get tough, you just need to ride things out and still persevere. After all, no one will tell you a short sale is an easy transaction to close. It is more of a waiting game than anything else and being patient will matter in the end.

Is It the Right Time to Consider a Florida Short Sale?

Many homeowners are on the fence about doing a Florida short sale now or after 3 or 4 years. Thinking about such an important decision is actually good, since you are weighing the advantages and disadvantages of selling your home via short sale now or later.

 

If the decision to do a Florida short sale does not stem from a need to avoid foreclosure, then you certainly have the luxury of time to look at the pros and cons. Of course, if you are on the verge of foreclosure, considering a short sale could be the only way you can get out of such a mess.

 

Short Sale Later

 

If you choose to postpone the Florida short sale, you will certainly enjoy staying in your home much longer. You will also be able to avoid being the center of neighborhood talk, which will mostly bring to focus any of your financial problems. By delaying the decision, your kids will also get to stay in school and there will be no inconvenient uprooting. If you also decide to stay, you will continue to enjoy tax deductions associated with homeownership and might even discover a solution which will allow you to keep your home.

 

Short Sale Now

 

On the other hand, doing the short sale now means taking advantage of the Mortgage Forgiveness Debt Relief Act, which is set to expire by the end of this year. Not taking advantage of this can be costly as one of its provisions allows for a $1 million in debt forgiven. In addition, you will also be able to get out of your underwater status and start credit recovery. This means in as short as two years, you will be able to enjoy the same impressive credit history you were enjoying before all the mortgage problems.

 

To help you decide which option is best for your current situation, talk to an experienced Florida short sale Realtor.

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.

3 Things to Check Out Before Buying a Palm Beach Gardens Short Sale

Finding a short sale home in Palm Beach gardens which interests you will certainly make you feel excited. However, you still need to make sure you do due diligence if you truly want to maximize this investment opportunity.

Here’s what you need to do:

1.       Instead of looking at pending sales, check out comparable sales. This is because it could take from anywhere between 2 and 4 months to close a short sale and by that time; the pending sales will then be the comparable sale and the pricing will just be right.

2.       For Palm Beach Gardens short sale homes priced way too low, expect them to receive multiple offers. If you are interested in such a home, be sure your offer is near the property’s market value. It is likely the lender will approve your offer compared to the low ball ones.

3.       Find out the exact number of loans attached to the property as well as the amounts.

4.       Check who the lender is and ask your Palm Beach Gardens short sale Realtor if the lender has a reputation of being difficult. This way, you can be prepared. It would be great if your Realtor has worked with the lender before and would be able to advice you accordingly.

5.       Try to find out if the seller has already prepared a short sale package which includes among others the hardship letter, tax returns, payroll stubs, bank statements and financial statements. Some sellers are not willing to provide such information quite easily, so you need to be patient.

As a Palm Beach Gardens buyer, you need to check all these things in order to protect your interest and avoid wasting your time. Do not let excitement get in the way of having a successful short sale purchase.