A lot of homeowners in Jacksonville have opted to sell their homes via a short sale transaction in order to avoid foreclosure. One homeowner sold her home at half of what it was currently valued at and was relieved that the lender forgave almost $76,000 in mortgage debt. Obviously, the owner was thankful that she could start over a new chapter of her life without having a huge debt to worry about.

Distressed sales, which include both foreclosure and short sales, have increased dramatically since January 2008. For that period, only 10 percent of the total home sales activity involved distressed houses. But for the current year, based in the information gathered by the Northeast Florida Association of Realtors, it soared to 49 percent.

Effect of Distressed Sale on Median Prices
As the number of short sales and foreclosure sales grew, median sales prices have started to decline. This, of course, is understandable as distressed sales usually mean steeply-discounted real estate properties. As a result, the growing popularity of short sales and foreclosure sales will only serve to remind the public that market conditions have yet to stabilize. For sure, the days when it is possible to own a home with zero-down payment are long gone.

Effect on Realtors and Agents
In addition to this, it can also be observed how agents and Realtors have adapted to the changing needs of their clients. New skills are needed as well as a better understanding of what is involved in these distressed sales. Most are having a hard time handling such transactions but because of their need to make a living. Many have accepted the fact they need to make adjustments. In fact, national certifications are being given to those agents or Realtors who choose to become expert in short sale transactions.

Effect on Underwater Homeowners
As for homeowners looking for a way out of their mortgage problems, especially those who found themselves with more mortgage debt compared to their home’s market value, a short sale is the only option which will provide them with a better outcome. There would be less damage to their credit scores, no foreclosure entry on their credit history and most important, eliminated debt (i.e. if the lender agrees to waive their right to deficiency judgment).

Of course, all this is possible with a professional and reputable Florida short sale specialist by your side.

Reference: http://jacksonville.com/business/2010-08-08/story/first-coast-housing-market-battered-short-sales

Considering the significant decline in home market values as well as the enduring problem of high unemployment rates statewide, it is not surprising why a lot of homeowners have thrown in the towel and accepted the sad fact a foreclosure or bank repossession is imminent. Others, who are considering a Florida short sale, on the other hand, are hesitant because of the stress of getting your proposal approved.

Despite this, homeowners in Florida should realize there are unique state laws, rules or regulations which make a short sale the better option compared to a foreclosure. One of these is the deficiency judgment.

Unlike in the other states where lenders are not allowed to go after the difference or balance on the mortgage after a short sale or foreclosure sale, Florida law states a lender can choose to forgive or go after the deficiency. There are no guarantees that lenders will waive their rights since they do not have to. Short sales are negotiations and within negotiations anything can happen. Of course, pushing for a full release is the best case scenario but it should not be expected. Nobody can promise it to you.

Obviously, distressed homeowners prefer this scenario since it would help them get over such an unfortunate situation much faster without worrying if the lender will go after the remainder of the mortgage.

Another reason for you to choose a Florida short sale over a foreclosure is, of course, what your credit will look like after. Short sales typically can do less damage than a foreclosure.

There are experts who believe a foreclosure is better in the sense you do not have to provide a detailed report of your financial situation, which makes it hard for the lender to decide if they should go after you once the home has been repossessed. But if the lender is not privy to your finances, it is likely you will fly under their radar.

But if you think about it, a Florida short sale, one which has been well prepared, will certainly look more attractive to the bank rather than a foreclosure, in terms of costs. As long as you present a good case and you provide the lender enough proof of your financial hardship, then you will likely get out of this mess with fewer cuts and bruises. Find a professional Realtor who specializes in short sale transactions and your chances will be greatly improved.

When it comes to a short sale transaction, having an experienced Orlando short sale Realtor by your side will certainly ensure the entire process will go smoothly. There are actually several things that can go wrong which would require the expertise of these short sale professionals.

1. Lender Rejects Proposal Because of Lacking Documents – Your short sale Realtor can help you prepare all the required documents particularly the hardship letter. With his help, you will have no trouble providing evidence of your financial hardship.

2. Selling Price is Way Too High – A good short sale Realtor knows the importance of getting a reliable Broker’s price Opinion in order to determine how much the property should sell for. If you make the mistake of asking for too much, you will have trouble finding a buyer.

3. Home Not Attracting Buyer Interest – Since it is very important you find a buyer, your Realtor will make extra effort to market your home.

4. Buyer Decides to Back Out – Situations like this will require a Realtor who can explain the reason for the delay and also convince the buyer to be a bit more patient. After all, a short sale can take as long as 6 months and the buyer should be aware of such time frame.

5. Lender Seeks Deficiency Judgment – If your Orlando short sale Realtor is honest, you will have peace of mind knowing he or she will work hard to make sure by the end of the day, you have the best possible chance of walking away with no further obligations. He or she will accomplish this by providing your lender more evidence of your bad financial situation.

If you are serious about stopping foreclosure and solving your mortgage problems, hiring an Orlando short sale Realtor will help you achieve these goals. Keep in mind a short sale proposal can only be accepted and successful if you have the right people backing you up each step of the way.

A foreclosure is not something a typical person would prepare for. After all, no one would like to think such an unfortunate situation will happen to them. Nevertheless, it is important for homeowners to understand they are not immune from such things. Instances of medical emergency, divorce or sudden unemployment could result to your inability to meet your mortgage obligations.

If, despite all your efforts to keep up with your mortgage payments, you ended up on the brink of losing your home to foreclosure, you should know that a short sale in Florida is currently the best option to explore if you do not want your credit scores severely affected. A short sale will also eliminate all your mortgage debts especially if you are able to prove to your lender that you are not in any financial position to pay the balance or deficiency.

Short sales have grown in popularity mainly because lenders would stand to lose more with a foreclosure. Before, repossessing a property is considered to be a better option for the lender. But with the large inventory of homes, which is basically costing the lender more to keep, a short sale has become the preferred option when a homeowner comes to them for help.

Short Sale Facts

For homeowners who would like nothing more than to avoid the trauma of foreclosure, you should act now especially if you consider the fact a short sale can be a lengthy process. Basically, it will involve:

Preparing all documents required by your lender. To be on the safe side, include documents which will support your claim of financial difficulty or hardship.
Prepare the home for attracting buyers. Keep in mind that it is important for the buyer to understand there would be delays especially if the lender makes a counter offer and initially rejects the short sale proposal.
Hiring a short sale Realtor who will guide you step by step and would make sure that all requirements are submitted and negotiations with both the lender and buyer will be properly handled.