Foreclosures & Short Sales

Short Sale Information for Buyers (below) click here

Short Sale Information for Sellers - Can I sell at a Loss?

If you or someone you know owes more on their home than what it is worth, we offer F ree Homeowner Resources, Information and Reports at http://www.foreclosuresinflorida.info .

Why would a Seller want a Short Sale vs. a Foreclosure?

It is a sad fact that the majority of people going into foreclosure have just given up, and never realized that they may have a much better option. If the homeowner is assisted by a Realtor, real estate attorney, and/or title expert who all understand the short sale process, there is a strong chance that foreclosure can be avoided. Many homeowners don’t think they can afford to sell. This is a tragic assumption, because most Realtors only charge a commission if a sale is made, and the Lender pays the commission!

A foreclosure is much more damaging to a person’s credit rating than a short sale. A short sale is a settled account, where a foreclosure is a default. Many job applications and security clearances are challenged by a foreclosure. Foreclosures remain on a credit history for at least 7 to 10 years. A Seller can bring their credit rating back up from a short sale in 2 to 3 years or less. We always advise that a homeowner facing foreclosure seek qualified and experienced legal counsel. We are happy to provide referrals.

Short sales are much more work for the Realtors involved, as well as the title company handling the transaction. I cannot emphasize enough how important it is for the Seller to be supported by the right team. From our standpoint, it is well worth the extra work, knowing that it can make such a huge difference for the financial outlook of our customers.

Short Sale, Foreclosure, and Distressed Property Information for Buyers

Which is better for a Buyer: Short Sale, Foreclosure, or Motivated Conventional Sellers?

There is no way around it, short sales are less certain and more likely to take longer than other sales. Long delays in responses from the Lender are common, for initial offers and subsequent negotiation. Many Buyers and Realtors prefer to stay away from short sales for this reason. Any Buyer considering a short sale should expect delays in the negotiation and often the closing, along with a lot of extra paperwork. This is not to say that a Buyer should turn these listings away, as long as they have plenty of patience.

Foreclosures are typically more straightforward than short sales, because the Buyer is dealing directly with the Seller, who is usually the Lender. There is inevitably more paperwork than in a conventional sale, but usually not as much as in a short sale. There are often delays in response time, but again, rarely as long as in a short sale. Lenders are not in the business of owning property, and do not want to carry the expenses any longer than necessary. They will often price their inventory, known as REOs (Real Estate Owned), at prices that are aggressively lower than comparable properties on the market. The lower prices and the common belief that foreclosures are great deals often leads to multiple offers, some at or above the full asking price.

Motivated Conventional Sellers are owners who feel they have to sell, and have enough equity or personal capital to sell their property at an aggressive price. Of course, many Sellers who are hoping for a short sale are motivated, and so are Lenders, but we’re talking about conventional sales here, where Lenders are not involved on the Seller side. Life events usually drive the motivation, including job relocation, health issues, estate sales, and divorce. These Sellers usually respond quickly, the sales normally require standard contracts, and closings can occur in a normal timeline.

Question: “We offered full price for a short sale, and the offer was refused! How can this happen?”

All short sales are subject to the approval of the Lender, who may not approve the amount they will receive even if a Buyer offers the full asking price in the listing. Because Sellers are motivated to sell before the Lender forecloses, they reduce their asking price until the property gets shown and hopefully, offers come in. Realtors who are knowledgeable in the short sale process offer very valuable assistance in the pricing strategy that will be acceptable to the Lender and that will bring potential Buyers in the least time.

Often, Buyers will seek short sale properties that have already had an offer refused, so they can find out what amount was acceptable to the Lender if a counteroffer was made.

If you're seeking assistance with finding and negotiating a great deal on a short sale, foreclosure, or other distressed property, I welcome you to contact us for a free consultation.

This is a great time to be a buyer in South Florida! No doubt, you've been reading about foreclosures and short sales in Florida in the newspaper and hearing about them in the news. There are many motivated sellers and distressed sellers in South Florida right now. We have the resources, the network, and the research skills to find you the best deal available on whatever property you're seeking, whether it's for your own personal use or as an investment property. Just call or e-mail us, and we'll get right to work for you!

· Should I buy a foreclosure property?

¨ There are many distressed sellers with their properties on the Florida real estate market today. Some of these properties are priced very aggressively and/or the sellers will consider very aggressive offers by buyers. Others were bought at the peak of the market, and the sellers and/or the lender will have to lose money to sell at a competitive price.

¨ Some properties are in pre-foreclosure, with the sellers months behind on their mortgage payments.Some South Florida lenders are permitting borrowers to sell at a “short sale” price, which is below the amount owed on the mortgage.

¨ Some properties have been taken over by the lenders, and are known in the industry as “REOs”, or Real Estate Owned. Lenders will sometimes discount these properties below the current market price to get them out of their inventory.

¨ Sometimes, the best values are properties that are not in any stage of foreclosure. The sellers may have bought several years ago, have considerable equity, and/or have strong motivation to sell.

¨ Sometimes the sale is driven by health considerations or a death, divorce, or other financial or family issues. When an estate is divided among multiple parties, the price reduction is also divided.

¨ Whenever possible, we research the tax and mortgage records of a distressed property before making an offer for our buyers. We always work hard to find the best values and negotiate in the best interest of our clients, and to ensure that your transaction progresses smoothly. Call me on my cell at 561-573-1828 or email us with any questions, and we'll do our best to help.

Foreclosures & Short Sales

Scott A Field MBA