Tip for Short Sale Realtors: Set Realistic Expectations

Being in the short sale business, Realtors often find themselves getting excited about every prospective sale. Most get frustrated halfway through the process and start unraveling at the seams. Perhaps, it is because of unrealistic expectations. After all, a short sale can be one of the most sophisticated real estate transactions you will ever encounter and it will surely pay off if you give it the respect it deserves.

To help you avoid falling into a hopeless pit midway through the short sale process, consider these three tips:

1.       Accept short sales for what they are — complicated transactions. If you underestimate short sales and make the mistake of not really getting to know each nook and cranny of the process, you will find yourself way in over your head. For this reason, a new breed of Realtors has to be born to handle them. You just cannot rely on basic knowledge; you have to master everything related to this transaction from signing on a client to closing.

2.       Practice patience and humility all the time – in many cases, you will find yourself swimming in documents related to a short sale transaction. There are also the calls from the seller and/or the buyer you need to attend to especially if the lender approval is taking too long. Of course, you will be dealing with the lender as well. With all this on your plate, you can really feel overwhelmed. If everything becomes too much, take a deep breath and walk around. You will not gain anything by succumbing to the pressures of the business.

3.       Do everything with care – there are so many things which could go wrong with a short sale transaction such as the buyer walking away, the lender rejecting the proposal for not complying with their requirements and even the seller changing their minds at the last minute. This is why it is important for short sale Realtors like us to take each step cautiously and make sure all “i”s are dotted and “t”s crossed. It pays to be meticulous when it comes to short sales.

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

More Short Sales During 2nd Quarter

Good news for everyone in the short sale industry — buyers, sellers and Realtors. For the second quarter of 2011, the number of short sales actually accounted for 12 percent of the total home sales transactions in the nation according to a real estate tracking firm. Compared to last year during the same quarter, wherein there was only 2 percent short sales recorded, it is indeed a big difference.

Analysts are expecting more homes sold via short sale as lenders are choosing to approve transactions rather than foreclose because of the high cost associated with filing foreclosure and waiting for it to be processed by the courts. If this is the case, short sale sellers and their Realtors are indeed lucky.

A distressed homeowner can benefit from a short sale since it will not only possibly get rid of the mortgage debt but it will also protect their credit score.

Navigating the Short Sale Process

It is possible another reason for the rise in short sale activity is because there are more short sale Realtors who have grown familiar with the process. Before the housing bubble burst, only a select few are familiar with such transaction. Right after the collapse of the subprime mortgage market, these knowledgeable and experienced Realtors started carving a niche of their own.

The entire process can try your patience and frustrate everyone involved which is why you need to make sure your short sale package is complete. This means submitting all relevant documents such as the Hardship Letter, payroll stubs, income tax returns for the last two years and a comparative market study to justify the offer amount. You might even want to include pictures of your home as well as an estimate of the repair costs. You should also prepare for the lender’s response whether it is a rejection, a counter-offer or an acceptance.

Lenders Now More Inclined to Accept Short Sale Proposals

It is a fact the foreclosure mess was the result of unscrupulous lending practices. Unfortunately, it did not stop there as federal regulators continue to investigate allegations of illegal foreclosures and penalize lenders who are found guilty.

With such heat experienced by the banks to make sure they are following proper and legal foreclosure process, it is not surprising why many have become more accepting of short sale proposals.

Short sale transactions used to be looked at by some banks with skepticism, thinking the homeowners are only trying to get out of their mortgage obligations by selling their homes at an amount less than what they owe in mortgage.

But banks are realizing, albeit slowly, the situation has actually changed with the mortgage collapse. It is actually no longer surprising for a homeowner to apply for a short sale or loan modification considering home values declined considerably and the national economy is in recession.

With a short sale, it is actually a win-win situation for everyone. The homeowner gets to pay off their mortgage debt while the banks save money on foreclosure costs and recover some of their losses. Even buyers of short sales benefit since the properties come with almost a guarantee of instant equity as soon as home values climb once again.

Even the federal government sees short sale as a valid foreclosure alternative and offered incentives to banks and mortgage lenders if they successfully completed such transactions.

Of course, although short sales are gaining popularity, the process involved is quite complicated. Distressed homeowners and short sale Realtors should work hand in hand to prepare the necessary documents and find a buyer who can stick around and wait for the lender to approve the sale or make a counter offer.

It takes some time but the benefits will certainly motivate you.

When the Going Gets Tough, the Tough Consider Short Sale

As a homeowner, your worst fear will usually involve losing your home to foreclosure. This is certainly something to think about considering the state the housing industry is currently in. Of course, there is such a thing as thinking ahead and it would be wise for you to look at your options — the best of which is a short sale.

A real estate transaction which involves selling the property at an amount equivalent to the mortgage owed, a short sale has become more popular in the last couple of months. Lenders, who previously looked at short sales as an easy way out for borrowers, are now looking at it as THEIR way out of a ballooning inventory of non-performing assets. With each passing day, more and more short sale approvals are being handed out and you could certainly be the next one to enjoy its benefits.

There are several benefits to a short sale including and perhaps the most important, is being able to prevent a foreclosure entry on your record .If the lender agrees to waive their right to file a deficiency judgment, you do not have to pay the difference between the sale price and mortgage balance. Yes, it is possible you may have to pay taxes on the difference but, after years of trying to solve your mortgage dilemma, you will finally be debt-free!

Obviously the road to a mortgage debt-free existence is not paved with gold and you will have to make sure you have done everything to obtain your lender’s approval. On your own, you would probably have a slim chance, but with a professional short sale Realtor to educate,  guide and even hold your hand; your chances will be greatly improved.

Go out and interview short sale Realtors and find one which has the knowledge, skills and experience to see you through this tough time in your life. Remember, you are not only looking for someone to help you with the paperwork but someone who will help you win this battle you waged against foreclosure!

Revisiting Short Sale Basics

If you check the news lately, you cannot help but see how distressed properties sales are getting a hefty share of the market. In fact, for the first quarter of 2011, 28 percent of the total home sales activity involved properties in distress including short sale.

For those of you who are thinking of investing in real estate and attracted to the benefits offered by short sale homes, you should at least refresh your memory with these short sale basic information.

Who Dictates the Sale Price?

The price of the property is actually the amount agreed by both the seller and the buyer and established during the bidding and negotiation part of the sales transaction.  Some people make the mistake of thinking the lenders dictate the selling price. This is not the case. Their decision only involves accepting or rejecting the amount in the short sale proposal. This is perhaps why it is important the seller justifies the amount in their proposal to make it easier for the bank to accept it.

There is also what is referred to as approved short sale, wherein the bank has already revealed the amount they will accept. Buyers usually look for these short sale transactions since they are almost always quick.

How Long Does Short Sale Take?

Short sales, despite their name, take time. If you are the seller, make sure all documents are prepared properly and you are working with a professional short sale Realtor to ensure everything goes as smoothly as possible. On the other hand, if you are the buyer, you have to be patient. You might even be tempted to look at other properties. It would be wise to wait a while.

How to Ensure Closing

Some buyers make the mistake of not preparing the mortgage paperwork once escrow has been opened resulting to the delay in closing. It would be smart to make sure everything has been prepared a couple of days before the actual closing date. If there are problems, you should ask the bank for an extension but do this as soon as you know you are going to be late and not on the actual closing date.

Depending on your preparedness, a short sale can be simple or problematic. So, it is really up to you.

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.

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

Do Not End Up As A Statistic, Consider A Florida Short Sale

According to a report released by the Mortgage Bankers Association, Florida has the highest number of homeowners who are seriously delinquent with their mortgage payments. About 19.52 percent were about 90 days delayed on their payments while a significant percentage of the borrowers are a month or two behind. Based on this, there is one out of four Florida homeowners who are delinquent.

It is believed the reason for Florida’s delinquency rates are because of the enduring unemployment problem and the continuing decline of home prices as a result of the foreclosure mess. Of course, it does not help that in Florida, foreclosures are handled by courts and thus, resulting to large inventories of repossessed homes compared to non-judicial states.

In addition, about 48 percent of Florida homeowners are currently underwater, meaning they owe more in mortgage than what their homes are presently valued in the market. If you would like to avoid becoming one of these statistics, then it is time to get serious and look at your situation realistically.

Being on the brink of foreclosure should be a cause for alarm. If you are already behind on your mortgage payments, your credit score is already suffering. Instead of waiting for the proverbial ax to drop, it would be better if you look for help right away. For those of you who do not know where to start, talking to a short sale Realtor is a good start.

Since these agents are equipped with the knowledge and skill to answer all your questions about a short sale, then you will be able to make an informed decision. If a short sale is for you, be sure to prepare all the documents as soon as you can and start looking for a buyer.

A lot of lenders are more inclined to accept the short sale proposal if the paperwork is in order and your buyer is able to show proof that he can make the purchase. Lenders are also wary about fraudulent claims of hardship so you should make sure that you can provide them with all the proof they need. Of course, having a professional by your side to guide you every step of the way will make things easier for you.

Tips for Short Sale Realtors

Being in the business of helping homeowners with a short sale transaction is no longer as easy and simple as it used to be. With lenders worried about fraudulent short sale proposals, the chances of getting approved for sometimes seems it has become so slim you would actually wonder if it is all worth it.

If you add the other problems usually encountered by short sale Realtors such as cut commissions and the seller or buyer backing out at the very last minute, it is not surprising why a lot of agents are leaving the short sale business.

Of course, there are those who entered the business with open eyes and have learned to adjust to the changing market and needs of the short sale sellers, buyers and lenders. If you are new to this business, you might want to consider the following tips in order to avoid getting frustrated.

Getting the facts. One of the mistakes that many short sale Realtors make is becoming subjective. In this business, the things which will help you make decisions are the facts and nothing else. If you have all the facts, you will not have a hard time coming up with critical decisions. These facts will actually guide you to making the right ones. Of course, this also means you need to take things slowly since getting all the facts will mean being patient and resourceful.

Lowering your expectations. Although you would want everything to go as smoothly as possible, there is always a huge likelihood that something will go wrong. You can always look ahead and anticipate the usual problems so that you will be prepared if it happens.

Be honest. This is perhaps the most important trait you will need to become successful in the short sale business. Honesty should, first of all, apply to you. You should be brave enough to admit your limitations in terms of your skills and knowledge. by acknowledging these weak points, you are actually giving yourself an opportunity to improve and be the best in this business.

Indeed, being a short sale Realtor has its ups and downs but, you are the only one who can dictate which of these two will define your job.