Michael Corkery reports:
After California, Florida has the second highest number of foreclosure filings. But there’s a potentially disturbing difference between the nation’s foreclosure epicenters. While home sales in some California markets are increasing (Sacramento), for example is up 76% in May) from last year due largely to bargain hunters scooping foreclosed homes from banks, there’s been no comparable distressed sale boom in many Florida markets, says housing economist Tom Lawler. . One reason may be that while prices have fallen in Florida, the flood of bank fire sales has not yet begun, as many troubled mortgages are still working through the foreclosure system.
“Something is clogging up the process,” says Mr. Lawler, who estimates it takes about half as much time to resolve a foreclosure in California, through either a bank sale or work out, than it does in Florida.
A possible explanation for the backlog is that foreclosures are resolved in the Florida court system, which can be time consuming, Mr. Lawler says. Foreclosures in California, meanwhile, are often resolved outside the judicial process, possibly speeding up the turn around time.
The delay is not good news for Florida residents and the lenders and investors that bet heavily on housing in the Sunshine State.
“Florida just seems to be nowhere close to the part of cycle that California is in, which seems crazy given how bad things look there now,’’ says Mr. Lawler. “It means that price adjustments, even though they have been fairly dramatic, are not finished.
I hope that helps you.
Web page; http://www.sunnyspotrealty.net
Email; SunnySpotRealty@comcast.net
Phone; 239-770-0686
How Investors should buy homes in
Cape Coral, Fort Myers and Naples Florida
· If none is found this go around, Do the cycle over again.
Never fall in love with a home. This is an investment.
***Never think, “The market has not bottomed out yet, I will wait” This is like catching a golf ball when it hits the ground. Miss it by a little and the rebound is fast and furious. That is not even taking into account our low interest rates. The time to buy is when the market is flooded, demand is lacking and interest rates are low. Sound familiar?
Important CriteriaAny given area has unique properties. That may be Salt water canal homes, fresh water canal homes or unique gated communities. If builders are not able to duplicate your property with competitive pricing, this is where to look. Example; Salt water canal pool homes in Cape Coral and Fort Myers. They cannot create anymore building sites. Over one million has great potential. What is available is all there will be. “Supply and demand”Be assured, High fuel ie electric heating costs will drive Florida’s homes to become very attractive before the rest of the U.S.
Using my methods you will be assured a making a great deal of money when flipping in 1-2 years.
http://www.sunnyspotrealty.net/Email; SunnySpotRealty@comcast.netPhone; (239)770-0686Lets begin today!
Once in a life time for Cape Coral Canal Front Homes.
Suppy and demand. They do not make any more Canal front home sites.
Prices are drastically reduced Cape Coral Florida homes. In todays market. Tommorow?
Cape Coral Floirda Real Estate is starting to really boom.See monthly sales.
Become a very smart buyer and choose the right time to buy for the future.It is now!
Subscribe to this blog and see what really is going on.
Choose me as a full time Buyer's agent that represent you alone.
Call today! Sunny Spot Realty Inc (239)770-0686Email today! Joseph Beauvais Buyer's agent
As a Realtor for 23 years in Cape Coral Florida, I often wondered why the public is so lacking in knowledge about the advantages of using a buyers agent and the differences between agency relationships.
It is still not obvious to me.
In Florida you have transactional agents and single agents. (listing agent or buyers agent).
A buyer should use a buyers agent and a seller should use a listing agent, right?Double dipping is great for the agent but not very good for the buyer nor seller.
In Florida, an agent is known as a transactional agent until the request a single agency status.
Does the public know what the duties and loyalties of a transactional agent lies? I know the vast majority do not. Why?
Who's responsibility is it to make sure the public is aware?
Can a part time buyers agent represent both sides in the best interest of each party? No!
Can a buyers agent change hats and become a proficient listing agent with all duties clear? Perhaps.
Can a listing agent, as the majority are, be nearly as proficient as a full time buyers agent? No!
So why is the public so lacking as an informed buyer? Many do not care nor know about the differences, all they want is to buy that house.
I find that in dealing with many agents that they are totally confused about where their duties lie.With the exception of getting the deal closed and over with.
I recommend that someone educates the public which will add value to our services. After all if an agent can be wear so many hats at will with little concern over loyalty why does the public need us?
I welcome your comments in a truly professional manor. Remember, everyone can view this forever.
This site tries to explain a buyers agent Buyers agent
My web site is http://www.sunnyspotrealty.net/
Joseph Beauvais Owner/ Agent Sunny Spot Realty Inc.
239-772-0686
Nationwide, some 233,001 homes received at least one notice from lenders last month related to overdue payments, compared with 148,425 a year earlier, according to Irvine, Calif.-based RealtyTrac Inc. Nearly half of the total involved first-time default notices.
The worsening situation came despite ongoing efforts by lenders to help borrowers manage their payments by modifying loan terms, working out long-term repayment plans and other actions
"You have more people going into default and a higher percentage of the properties going back to the banks," said Rick Sharga, RealtyTrac's vice president of marketing.
The U.S. foreclosure rate last month was one filing for every 534 homes.
The Cape Coral-Fort Myers area in Florida posted the highest foreclosure rate of any metro area in the nation, with one of every 86 homes in some stage of foreclosure, said RealtyTrac Inc.
Stockton, Calif., was ranked second, with one of every 97 homes involved in a foreclosure filing, while the Riverside-San Bernardino metro area in Southern California had the third-highest foreclosure rate with filings for one of every 101 properties.
January's tally represented an 8 percent hike from December.
RealtyTrac follows default notices, auction sale notices and bank repossessions. Lenders typically consider borrowers delinquent after they fall three months behind on mortgage payments.
Attempts to help struggling home owners have fallen short.
"The loan workout modification programs aren't having a significant material effect on keeping properties from going back to the banks," Sharga said.
One dramatic trend last month was a 90 percent spike in the number of properties that were repossessed by banks, compared to January 2007.
"It suggests that there's little or no equity in a lot of these homes, because they're not even being sold to investors at auctions, and it suggests a continuing weakness in a lot of markets in terms of real estate sales," Sharga said.
Falling home values and tighter lending standards have extended the housing slump, making it tougher for homeowners unable sell their homes or refinance when they face mortgage payments they can't afford.
A wave of adjustable rate mortgage resets expected in May and June threatens to push many other homeowners into default.
During the past year, 30 states saw an increase in the number of homes that had received at least one filing.
Nevada led the nation, with 6,087 properties receiving at least one filing, up 95 percent from a year earlier but down 45 percent from December, the firm said.
That translates to a rate of about one foreclosure for every 167 households.
Rounding out the top 10 states with the highest foreclosure rates were California, Florida, Arizona, Colorado, Massachusetts, Georgia, Connecticut, Ohio and Michigan.
California had 57,158 properties reporting at least one filing, the most of any state. The total increased 120 percent from a year ago and 7 percent from December.
Florida had 30,178 homes on the foreclosure track, up about 158 percent from a year earlier and down 3 percent versus December
The rich are investors and wise.
Money is made by those that have it and use it wisely.
Not all have enough cash, but they buy realizing the dept service is an important factor and worth the chance of investing at the right time.
When is the right time?Today!
If you have seen my forecast on my web site, Why Buy Florida now?, you know I am right.
How can a beginner start?
Buy now in Cape Coral, Fort Myers, Fort Myers beach and Naples Florida.
The market has bottomed out. See the light! It is time to buy now.
Investors are buying see Monthly solds
Why not you?
I am a buyers agent waiting for you to contact me to find these great deals through foreclosures, distressed sellers or even short sales.
Contact Joseph Beauvais Owner/agent Sunny Spot Realty inc.
Call Today! 239-770-0686 or go to my web site, http://www.sunnyspotrealty.net/
Email; mailto:http://www.sunnyspotrealty.net/?subject=Buying%20in%20Florida
Home Sales are booming in Lee county including,
Naples, Cape Coral,Fort Myers,Fort,Myers Beach and Bonita Springs
If you have buyers in your data base, let them know that the time is right.
Why?
Our prices plummeted below the country average. It is time to rebound.
Many salt water homes are at a historical low. They cannot develop salt water sites any longer.
Buy now while you can.
You are welcom to visit my web site Google ranked #3 http://www.sunnyspotrealty.net/Home
They are way up!
Sales are starting to really boom. Investors are ahead of most, knowing that they can buy during the best time every at prices that are staggeringly low.
My web site is getting so many hits and queries from buyers that it is nearly a full time job to handle them.
Don't miss out.
As a buyers agent, I will not only find the best deals but negotiate even better than you thought possible.
Don't try to wait. The time is now!
Buyers AgentJoseph Beauvais
(239) 770-0686
Buy Low-Sell High! We have been taught this for years and business people like Donald Trump, Robert Kiyasaki and many others have become masters at speculation.
In our industry we are either continually asking or being asked how much lower values are going to go before the road to recovery begins. As a matter of fact, I am humored by those who think there is a magic formula, a scientific equation, or even a good way of guessing when the market will begin it’s upswing.
Please understand this one thing…There Is No Crystal Ball. As a matter of fact, since there is no crystal ball there is also absolutely no way of speculating that we are at the bottom or not. That means that when the media announces things like “we are not at the bottom” or “we have another year of this”, please understand that there is no way of knowing this.
Here is what we all must realize. We must realize that there is only one way to know that it was the bottom. That way is simply by “missing it” or when it is now behind us.
Let me state a simple fact. When America believes we are at the bottom, we will at that very moment be at the bottom. Because when America believes we are at the bottom and this is the best deal they will receive, they will act. Actions create demand and demand will create an upturn in the industry.
As long as we pay closer attention to the media than we do our own common sense, we will not be at the bottom. The media preaches that we are not at the bottom and when we listen, we confirm that. We keep waiting, and that keeps the perpetuation of the downturn in motion.
I recently heard of a Real Estate Office that had a big sign outside on its front window that simply said “Smart People Are Buying Real Estate Now”. That pretty much says it all.
Here is a great question for any potential buyer out there. Would you rather buy now and have prices go down another 5% before beginning to recover or wait and buy when you have missed the bottom and prices are already on their way back up?
We must understand that the moment we feel we are at the bottom, we will be. When investors think the best deals are now, they will be. However, when we listen to those who keep stating that we are not there yet and believe them, we will make them right.
Action fixes everything. So, if you have buyers who still feel like the market has lower to go, have them tell you how much lower they think it will go and then “Write An Offer” using that number. Don’t wait another minute. Action creates demand and demand creates the upturn we are all waiting for. It will not be magic, but action that begins the recovery.
Take action before the end of this day! Here's a great song to motivate you to "Get On Your Feet!"
Lee County covers many areas including Cape Coral, Fort Myers, Fort Myers Beach, Bonita Springs and more.
The unemployment is an indication of things to come with more unemployeed, it means more will not be able to pay for the homes they have purchased.More foreclosures.
For buyers it is an opportunity to help sellers out of this delema by purchasing during a severe down market.
People in the know with ready cash to invest are entering the best buyers market for many years to come. This is to say, " do not enter this market expecting to flip using all of your available funds."Many homes are available to fix up, or purchase at a severe discount.
I would risk my reputation by saying, "the market will turn around in 3-4 years, giving the investors a very handsome profit.
Buyers looking for that perfect home to live in for atleast 3 years at an affordable price can do no better than now for many many years to come.
I would love to be able to prove the rational to you and save you a bundle as a buyers agent.I can provide you with over 22 years of experiance and advice.I love helping people help themselves.
Call today (239)770-0686 Or email SunnySpotRealty@comcast.net
Joseph Beauvais Owner/Agent
Builders Agent/Broker
I am very nice and sweet to the buyers. I represent the builder/seller but am going to make many promises (not in writing of course). The buyers have a buyers agent but I can sweet talk the buyers into trusting me.
quote;"We have a very good reputation and you can trust us. We are very reputable and have been building homes for 20 years and all of our buyers are very happy. "
I am going to break the Florida Real Estate Commissions rule about contacting the buyers directly because I know that no one will turn me in. Besides, once I get the buyers to trust and like me they will not assist their buyers agent in filing a violation against me. After all, all they want is to close on the home. It is a risk of loosing my license but, I will get any friends that they may have to buy directly through me and save my boss lots of bucks in repairs, commission and cosmetics. It is worth the risk.Heck yes!
Note: It is agents like this that bring our profession down to the level of used car salesmen. At that I am guilty of stereotyping a car salesman. Sorry.
If your read this Colleen and Koen, you know I am right.
Everything must be in writing so there is no confusion about what was promised and whom must pay for what.
All Sales by Realtors(Market Conditions) for Cape Coral, Ft Myers & Beach, Bonita Springs.
With this you may see mothly market sales way before the news gets around to printing it. Every month I post new sales by all Realtors.
Just click the link. Monthly Sales
This is my thanks to you as a potential or current client.
Thank you,
Joseph Beauvais
239-770-0686 Email SunnySpotRealty@comcast.net
If you want to see all sales and pending sales by Realtors in Cape Coral,Fort Myers,Bonita Springs and Fort Myers Beach, for
homes, condominium Villa and Townhouse,
Click on http://www.sunnyspotrealty.net/CapeCoralFl
I will update this by the first of each month.
Now you can see what the market conditions really are.
Not what the News has to say. (negative news sells ratings)
100% Accurate and up to date.
When you are ready to sell or buy, contact me.
Email: SunnySpotRealty@comcast.net Phone (239-770-0686
Canal Bridges, Lifts and Locks
Maps of Cape Coral display all its 400 miles of canals, in addition to the lakes, riverfront, spreaders, and adjacent bays, harbors, inter and intracoastal waterways. With that much water, you know that roads are going to intersect with the canals at some point. Not all maps show you exactly what kinds of crossing you may be dealing with - and that can affect what kind of boating you can enjoy from your waterfront property.
Weirs
Weirs are not marked on all maps but they are vitally important to the value of waterfront property in Cape Coral. Weirs occur under some roadways when they cross a canal. Weirs allows some water to flow, but they do not allow ANY kind of boat access. Good maps mark weirs with a symbol similar to the image at right. If there is a weir between your property and the river or pass, you do not have direct access property.
Bridges
Other times when a road crosses a waterway, there will be a bridge. There are a few drawbridges to the islands off the coast, but Cape Coral itself doesn't have any. So you don't have to worry about traffic blockage. You do need to concern yourself with the height of the bridge, however.
While the bridges over the river are designed to be high enough for all water traffic to pass beneath, the bridges over canals in Cape Coral are a different story. They are often quite short, especially at high tide. A boat with a high hard top or a raised canopy must be very careful that they can fit underneath.
There are many kinds of boats that have no problem, especially on the freshwater lakes and adjacent canals. In fact, freshwater bass tournaments are held in these waters, and bass boats are perfect for travelling these waterways. Jet skis are popular in the lakes and basins, and bowriders are another popular choice. You can be on direct access and need to pass under a bridge, so it's good to know the height of those bridges when determining if the property will meet your boating expectations.
Locks
Cape Coral enjoys both freshwater and saltwater waterways as well as tidal and non-tidal waters. To prevent saltwater incursion, and to keep interior water levels at good heights, the city employs both locks and boat lifts.
The primary lock connects the Caloosahatchee River to the Spreader waterway, which connects to a great deal of SW Cape Coral's canals, providing Gulf access property deep into the Cape. This lock is located near Cape Harbour. Properties behind the lock are considered Gulf access, but not direct access.
The Intracoastal waterway, which includes the entire Caloosahatchee River, also has locks that enable boats to follow the rise of the land and travel all the way to the east coast of Florida.
Boat Lifts
Boat lifts aren't just for keeping you boat out of the water at home. Cape Coral employs a boat lift which swivels, providing access to Pine Island Sound from the Burnt Store Marina boat ramp for smaller boats. The lift prevents saltwater incursion into the northern canals, but allows access to boaters. Simply register with the City and they will give you a key, which you can use to work the boat lift at any time.
Other areas just do not compare in what we have and prices.
Email: SunnySpotRealty@Comcast.net
239-770-0686
The market is not bad. It is very good. The problem is that there are so many homes on the market righ now.
Builders over built. I search sales every day and see a lot. A lot is defined as in a hot market. The problem is so many speculators bought to flip and builders to sell that they have flooded the market.
Will It get better? Yes! How long? Educated guess, 5 years. Why so long? The builders are buying lots (land) to build on while vacant land is so severly depressed. They are stealing land. This means even if the market recovers, we will still have a lot of inventory.
Knowlege is a great thing. Hope this helps!
Sincerely Joseph Beauvais owner/ agent 21 years.
I hope you enjoy these humorous sayings by sellers. They are real.
I usually only post a blog once every two weeks, but I did not want you to miss this one.
Seller: I was trying to sell my home of over 6 months now. No one bought at the price I wanted.
Me: Well, let me look at your home and I will try to assess the problem and if you wish I will tell you why.
Seller: Ok! Thank you.
Me: How many showings have you had?
Seller: around 40 with two low ball offers.
Me: After viewing this nice lake front home and reviewing the asking price,I determined that the asking price is right.
Seller: Well why no reasonable offers.
Me: You have so many bushes, plants, banana trees (plants) that the buyers cannot even see the water. 1/3 of your value is the view. You are blocking 1/3 of your value. Remove the bushes etc and it will sell for much much more.
Seller: We like the plants. If buyers want to remove them, that is easy and they can do it themselves. That is not the reason. The market stinks.
Me: Well if the market stinks, evidentially 40 buyers have not agreed with your assessments. I strongly suggest you clean up the view.
Seller: No way!
Me: Ok! Call me when you change your mind.
Comments; If they ever sell it the way it is, it will go to an investor that can spend 3k to clean it up for thousands less.
I hope you will listen to a real pro that gives you good advice. Most agents are afraid to tell people the truth. The then loose the listing opportunity. I am not afraid to be honest and wait until the work is done. I know most buyers do not want to take on a task like this. They want a home with a view.
Well I hope you are enjoying this humor.
Seller; I do not care if other people are giving their homes away. I took an equity line loan out last month and now my payoff is 20,000 more than the others are asking. I need to get $$$$ to pay off my loan and have a profit.
Me: I understand "I think". Let me see if I have this straight.
When I show a buyer your home and he says, "Based on the other homes, this seems over priced", I should tell him, "but they need the money and are really nice people" so you should pay more for the home.
If you think this is funny, it is. I hear this more often than you could imagine.
Sometimes the humor is realized by the seller and they laugh and see what I am saying.
Hello again,
This is the second part of my 10 part series.
Silliest Seller Sayings Series
Seller; What can I get for my home today?
Answer; Well you should first paint the walls a diffrent color than dark red and the black carpet should be changed because you will not get buyers to fall in love with your home with these unusual colors.plus, I really and strongly believe you should have a toilet in the bathroom. I know it is not always found in Costa Rica but this is America and we are not used to a trough.
Seller reply; Well, the buyers can make the changes. We need to live here and we like it that way.
Now do you really believe they will sell the home? Possible but for a whole lot less than the competing homes. Needless to say, I did not take them on as clients.
There are two kinds of buyers.
1. fall in love and buys with their heart not there wallet.
2. Investors will buy and do the work for a lot less money.
Euro at record $1.40.63 today!
I have two German buyers that are buying now while the Euro is so strong. Every day I get emails from the Uk and Germany. They want to buy now.
With the news, you only get negative news. It raises ratings. They are not reporting the phenomenal amount of foreign buyers buying in Florida right now as I am writing.
For good or bad news up to the minute continue with this blog.
Sunny Spot Realty Inc. 239-770-0686
Is it time to Buy a Florida home or wait?
It depends!
Why? What is the difference?
Lenders are in bad shape. Too many owners cannot pay due to over extending themselves and taking out equity line loans. 920 foreclosures last month alone.
How will lender recoup the losses?Answer,Through future buyers.
What to do if I am a less than perfect buyer? Wait for the market to bottom out or buy now?
Answer, Buy now! The lenders are still in meetings trying to figure out the best way to handle this problem.
If you wait even a few months, it will cost you thousands and thousands in the long run. Don't gamble to save perhaps a few thousand on the purchase price and loose a fortune in interest.
I can find you a super home right now at a price you will not believe.
I will get you tomorrows prices today!
Call Me today! Joseph Beauvais
This blog has great value to Sellers!
When doing a market evaluation or considering lowering your price due to competing homes for sale....
Notify your agent you do not want to compare with short sale properties listed for sale.
Price on a short sale is a desperation to sell by the owner. Very low asking prices do not matter to owner nor agent. They are trying to sell before foreclosure and the bank eats the difference.
Or do they?
Not in reality. The bank will do an appraisal or Broker opinion of value and reject low offers. Most lenders are not up to date with current market conditions and values. If they reject the offer they will not tell anyone what they will take, thus the game continues. Raise the asking price a little and see if they take the next offer. Plus the seller does not know that taxes will be owed on the difference between sold price and owed price. Not to mention that they may well put a judgement against the seller for that amount.
How this hurts sellers?
Properties listed for sale (short sale)may have unrealistic asking prices. If your agent uses these to set your asking price. You will be too low compared to normal listings.
Why short sales are not your competition!
A very few are selling at or near the price asked.It takes about 3 weeks to get an answer from the lender and most buyers will not wait that long to find out accepted or rejected.The lender will not sign the sales contract and is not bound by time constraints nor the contract. Closing dates irrelevant. Most agents will not even show Short sales. If the lender decides to pay 1% (really) that is what you get. Kill the deal and ethics come into play.
Short sales are not your competition and should not be used as comparables.
90% of agents are not aware of this. I am.
If you want a real pro to sell your home, call me.
239-770-0686 Joseph Beauvais/owner agentEmail; SunnySpotRealty@comcast.netSunny Spot Realty Inc.
Read more about short sales;
http://www.sunnyspotrealty.net/ShortSale
Buying foreclosures! snippet
I recently received a request to buy foreclosures in Cape Coral Florida for 100,000, for a home, fairly new, in great condition, 3/2/2 on city water and sewer. I get many such request so I decided to blog the information.
Foreclosures are a good buy in many cases. You may expect to save money. How much is the misconception.
Banks are in business to make money not give homes away. You can expect to save perhaps 10-20%. Most foreclosures are listed with real estate agents. The bank does an appraisal and sets the asking price. They will reduce after a period of time. The problem lies in that the appraiser uses fairly recent sales to determine market value. Fairly recent being the key word. I have found that the asking prices are not a great deal.
I have tried to express my opinion to the banks. At this time they are unwilling to negotiate much. Perhaps in the future.
Many homes that have been foreclosed on by a bank has damage. While wrong, some owners are mad that they lost their money and home so they do damage in varying degrees.
My suggestion; Hire a buyers agent to pursue all avenues for a great deal. I have sources that most agents do not know about. Do not assume because it is a foreclosure you are getting a great deal. Damages and costs to repair must be factored in as well as your ability to hire or perform the repairs.
*note This information is localized and may be different in your area. Check with an experienced Realtor.
Hope that helps,
Joseph BeauvaisSunny Spot Realty Inc.Cape Coral Florida239-770-0686
How to Succeed at Short SalesUnfortunately, short sales are a reality for home owners who owe more than their property is worth. If you have patience, persistence, and a knack for problem-solving, this niche could be for you.80% BY Joseph Beauvais You’re so happy you got the listing — at least until the sellers inform you the price you’re suggesting based on your careful CMA just isn’t enough. Why? They owe more than that on their mortgage and home equity loans. Welcome to the world of short sales. Flat or home prices, home-equity credit lines, 100-percent financing that sucked out equity, and spiking interest rates on adjustable mortgages are converging to create a regrettable, but expanding, niche for real estate practitioners: the short sale. To help you gain a better understanding of short sales and what it takes to specialize in this growing area, we took a look at some of the most common questions on this topic that you and your customers likely will face today. Armed with this information, you can decide whether short sales are an avenue worth exploring for your business. What is a short sale? A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers’ mortgage obligations and closing costs, such as property taxes, transfer taxes, and the real estate practitioner’s commission. The seller is unwilling or unable to cover the difference. Some — although by no means all — short sellers may also be in default on their mortgage loans and be headed for foreclosure. However, home owners who bought at the top of the market or who took out large amounts of equity with a refinance and who now need to sell because of divorce or job transfer may also find themselves upside down, owing more than the home is currently worth when closing costs are factored in. Tip: Losing your home can be very emotional and most people don’t want to face up to the reality until foreclosure sets in. "You have to have to have a very soft sell approach, but still keep sellers focused on getting forms and paperwork complete," says Sheryl Thomson, associate broker, Exit Island and Beach Realty, Merritt Island, Fla. Other sellers simply don’t understand that if they have assets, such as stocks or a high-salaried job, a lender is not going to let them just walk away from a short sale without signing a note to repay what they owe, says Steve White, broker with Keller Williams VIP Properties, Santa Clarita, Calif. How do I know it’s short? A CMA will be your first indicator, but you also need to ask the seller what their outstanding debt is and calculate the cost associated with a sale — from transfer taxes to your commission. This will give you an estimate of the net proceeds that will be realized, often called the net sheet. This information can then be entered into a HUD-1 Settlement Statement to calculate out the final, negative result at closing. Some lenders also have their own forms. Check with the title company and the lender to get exact figures on closing costs and loan balances and to find out what procedures they have in place. If they can afford it, sellers should also consider getting a home inspection to determine what repairs are needed on a home and how this might affect its value, says White. Tip: Get the seller to send a brief letter to all mortgage holders, giving them permission to speak with you. Otherwise, privacy laws will prevent them from talking to you about the loans and a short-sale course instructor. It’s also critical to build a relationship with the seller’s lender. Once you have credibility, the entire process becomes easier, he says. Who do I and the seller need to talk to about the problem? If there are a first and second mortgage or a home equity line of credit, you may have to talk to more than one lender to get approval for a short sale. In addition, you may also need approval from the entity that holds the pool of loans if the mortgage has been securitized. "The presence of two lenders makes a short sale more complicated since it’s often the lender holding the second, or junior, mortgage that has to absorb most of the loss.Opinions differ, but most experts suggest that you let the lender involved know as soon as possible of the potential short sale. Others say you should wait until you have an offer because you’ll get no action until then. “Without a viable purchase offer, your deal won’t be considered by mortgagees.Tip: Be sure you contact the bank’s loss mitigation department, which will be the group to decide whether to accept a short sale, rather than the collection or customer service department, which is only interested in recouping past due loan payments. "Finding the decision maker is often one of the biggest initial challenges in a short sales," says Thomson. What information will the bank need to decide whether to accept a short sale? The sellers’ submission package should include W-2 forms from employers (or a letter explaining the seller is unemployed), bank statements, two years of tax returns, and other financial documents outlining income and debt obligations. The bank will also need comps or a broker’s price opinion showing your estimate of value. In addition, the sellers should submit a “hardship letter,” explaining the circumstances that make it impossible for them to pay the full amount of the loan. The seller needs to be able to show true financial hardship. Someone with the assets or the income to pay is unlikely to be considered, say most interviewees. Tip: In preparing the package, be careful about discrepancies between the seller’s income and the income used to obtain the loan, cautions Lance Churchill, an attorney and instructor on short sales and REOs with FrontLine Seminars. A big gap may indicate mortgage fraud, unless employment circumstances have drastically changed. What are the options besides a short sale? Thanks to programs such as those proposed by Fannie Mae and Freddie Mac to assist sub prime borrowers, many lenders are more willing to offer loan modification options. This option can extend the term of the loan, add on delinquent payments to the loan principal, and/or reduce the interest rate to make the loan more manageable for the home owner. Another option is a repayment plan that requires home owners to increase their monthly payments until the loan is current. It may be possible to refinance an adjustable rate loan with a Federal Housing Authority or conventional fixed loan. Note that lenders will not postpone a foreclosure just because a property is listed, although they may postpone if you have a reasonable offer in the works. Tip: The ideal candidate for a short sale is still making loan payments and has a credit rating worth preserving. Otherwise, it may not be worth going through the complicated process. How should I price a short sale property? In general, most short sale experts say to price the property at or near fair market value, although a few will begin with the total payoff amount owned by the seller. How frequently prices are dropped will depend in part on whether the property is in preforeclosure. Most banks have a formula for what percentage under market value they will accept, say interviewees. Figures cited vary from 8 percent under to almost 20 percent under. "I always price the property 10 percent lower than comparable to peak buyer interest and initiate buyer activity. However, it’s important for buyers to understand that the bank will not give away the property, she says. Tip: Most lenders will want to get a broker’s price opinion or even an appraisal to see what the property is worth before you and seller set a list price. One way to help ensure that the bank’s estimate of value is realistic is to offer comps of recent sales — both traditional and REO.“Practitioners who do BPOs are rated in part on how close their estimates are to the final sale price, so they usually welcome information on legitimate comps,” he says. What and how should I disclose about the short-sale property to prospective buyers?Opinions vary on this topic, although most experts favor disclosing that a property is a short sale in the comments section of the MLS listing. Others suggest waiting to disclose the need for lender approval of the sale until a buyer is ready to make an offer. Tip: Watch out for unethical investors who will try to convince an owner facing foreclosure to sign a quit-claim deed for the property, and then lease the property. In such cases, the former owners will still be liable for the mortgage payments, even though they no longer own the house. How long does it take to complete a short sale? Although response times vary from lender to lender, it can take two weeks or as long as 60 days to receive an approval of a short sale from a lender. That’s why it’s critical that buyers and their representative understand and accept that time frame before they make an offer. An addendum to the California Association of REALTORS® purchase contract includes a provision allowing either party to cancel a short-sale contract within a set period if the seller hasn’t gotten the deal approved, says White. Properties with securitized loans (which are the majority these days) may require a longer time to get an approval of a short sale because of the possible need for approval from the entity holding the pool of securities, says Churchill. Tip: Keep in mind that the purchase contract on a short-sale property is a legally binding agreement once the earnest money has been deposited. Without language in the contract stating that the lenders must approve the offer and release all liens on the property, the seller may face a legal problem for failing to execute the contract if the short sale is not approved. What can the seller and I do to make a short sale more attractive to a lender? Getting a lender to approve a short sale is primarily a question of economics. You have to provide hard numbers to show that the amount of money a bank will realize on the short sale is better than the amount it may recoup from foreclosing on the property and selling the property as an REO. A 2002 study by Craig Focardi of the Tower Group estimated that the entire cost of a foreclosure was $58,759 and took 18 months. Other factors that can influence a bank’s decision include the liability risk it assumes by owning the property after foreclosures, the money tied up during the holding period for a foreclosure and REO resale, additional costs associated with an REO such as attorneys’ fees, and the additional reserves it will need if REOs rise in the bank’s portfolio. Tip: A buyer that is willing to close in 30 days and who can make a substantial down payment may make the deal more attractive than a buyer who wants 95 percent financing. All buyers should be preapproved for a mortgage before submitting the offer. However, to avoid unnecessary costs, buyers should wait on having a home inspection and an appraisal for the loan until after the bank has accepted the short sale proposition. Genuine hardship, such as a lost job or high medical bills from an illness may also have an influence. What are the seller’s options if a short sale is rejected by the lender? There are a variety of reasons a bank will reject a short sale — from too low a price to too many files on the loss mitigator’s desk. You can look for another buyer or even try resubmitting the same contract. Banks don’t want to take properties back in foreclosure, so they are going to do everything they can to make it work. You also need to prepare your seller in advance for the possibility of foreclosure if a short sale fails. Tip: A short sale might be rejected if the loan is less than a year old. In such cases, the servicer that’s bought the loan can often require the original lender to buy it back.
What financial or credit liabilities will a seller have as a result of a short sale? Many lenders ask sellers to sign a promissory note for all or part of the difference between the proceeds of the short sale and the debt obligation as a condition to a short sale. In such cases, the note gives lenders the right to sue a seller and attach other assets if the note is not paid when due. It’s particularly important to understand this distinction if you work in states such as California that have a nonrecourse mortgage. In such states, the lender cannot pursue a deficiency judgment against a seller for any deficiencies after a property is foreclosed. Because of this distinction, sellers who are already in default on a mortgage and do not have the resources to pay off a separate promissory note after a short sale might be better off letting the lender foreclose, he says. If you are working in a state in which mortgage loans are nonrecourse, be sure and alert your seller-clients to this distinction. Tip: Having a portion of a loan forgiven may have an adverse affect on the seller’s credit. Encourage your client to try and sign a lease on an apartment before credit is further damaged. What tax liabilities will a seller have as a result of a short sale? One often-overlooked aspect of short sales is that a seller must count any amount forgiven by the lender as income and pay taxes on that income, even if no actual money was received. The IRS requires lenders to submit a Form 1099 stating the forgiven amount. Sellers who meet the Internal Revenue Service definition of insolvency (either in bankruptcy or with debts exceeding assets) will not have to pay taxes on the forgiven amount. Tip: The U.S. House of Representatives has introduced the Mortgage Cancellation Tax Relief Act (H.R. 1876), which would eliminate taxes on any debt forgiven on a principal residence through either short sale or foreclosure. The NATIONAL ASSOCIATION OF REALTORS® has been working to support this bill. What compensation will I receive as the real estate salesperson or broker in a short sale? Banks are going to want you to discount your commission. "It’s the first place they’ll look to save on closing costs. Rates offered can vary, but are typically 1 percent to 2 percent below averages in the market, say interviewees. However, more lenders now seem willing to pay a full commission on sales. Tip: Instead of stating a specific percentage of compensation for buyers’ representatives when posting the listing in the MLS, offer a split (50/50, 70/30, etc.). In this way, if the lender pressures for a lower commission, you can divide the fee, rather than give a stated percentage to the buyer’s representative. Many MLSs also require that you disclose a short sale in your listing. Where can I find clients if I’m interested in specializing in short sales? Word of mouth remains the biggest source of new business, experts say, but you can also promote your services to individuals attending credit counseling classes (now required prior to filing bankruptcy), to people who receive state notices of loan defaults, and to home owners named on lists of ARMs that will be resetting in the next few months. To find buyer clients, creativity is a plus. A monthly “Short Sale Hot Sheet” e-mail to investors. Tip: FSBOs are another good source since many upside-down sellers think they can’t afford to pay a commission and so try to sell on their own. Many don’t realize that in a short sale, the lender pays the broker’s commissions. Are short sales for me? With many more adjustable rate mortgages ready to reset to higher loan amounts in the next couple of years, short sales represent a growing sector of the market. However, because sales are time consuming, they aren’t for everyone. "I always say that if you’re going to succeed in short sales, you need the 3 Ps — patience, persistence, and problem solving," says Joseph Beauvais
Web; www.sunnySpotRealty.net email; sunnyspotrealty@comcast.net, Phone 239-770-0686
These will be some of the silliest senerios or remarks I have heard from sellers over my 20 years in Real Estate. I will give one every 10 days. Not sure a total as yet. Maybe 10.
Seller: How much is my home worth?Me: Based on sales recently and the amount of properties on the market without selling, I would strongly suggest a narrow range of between ?????? and ???????.
Seller: I paid ????? for it. Add your commission on top and add 20,000 for my profit and that is what I will ask for the home.
Note: I wish this analagy could be played out in the stock market. What do you think?
Scam very serious Warning.
Buyers are making offers for full price on seller’s homes.They put around 30k down. Write you a check, and then tell you must pay their associate for legal, leg work and more 8,000.00 when he comes or I can take it to him. Then your check they gave you bounces and the name etc may or may not be phony. End result you lost 8,000.
Be forewarned!
The bankruptcy laws in Florida have changed. If you decided to sell using a short sale or give the property back to the bank for foreclosure, you may be in for a serious surprise.
Many banks are now requiring you carry a note for the difference between what they sold it for and what you owe on the mortgage. Get legal advise.
Be warned! Contact me before that happens to see what I can do for you.
Thanks,
Owner Sunny Spot Realty Inc.
(239)770-0686
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Market report!
Prices have bottomed out. Inventory is high. Investors are leaving the stock market and venturing back into Real Estate. Foreclosures, pre-foreclosures and short sales are increasing dramatically.
What you should do if;
Wanna be Investors;
Jump in while the inventory is high and pickings are great. If you wait until the news says, "the market is rebounding", you are 6 mts too late.
Investors;
You already know! Keep intouch. I have a lot more for you. Remember!You can't Steal in Slow Motion!So have all your ducks in order with a pre-qualification letter in your back pocket.