The
short sale process can be significantly less expensive and a
good
alternative to foreclosure for both lenders and homeowners.
For homeowners in trouble, it doesn't help them keep the home, but
it can
keep the foreclosure mark off their credit report. It's also less expensive
than going through the court system in a foreclosure lawsuit. A short sale
is an alternative to bankruptcy or foreclosure proceedings.
A real estate "short sale" means the lender may accept less than the total
amount due. Not all lenders accept short sales and not all sellers
properties qualify for short sales.
An experienced Real Estate Agent will guide you through the process and
can also locate real estate selling for bargain prices and not in
foreclosure.
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Short sales and pre-foreclosures could
be a good deal for buyers, if you have the patience.
First time home buyers with short term move in dates
...should avoid
short sales. You may have to be rejected many
times before somebody accepts your offer. Consult with a licensed real
estate attorney for advice and legalities and consult with a CPA for tax consequences.
For sellers, there is no guarantee that a lender who accepts the short sale
will not legally pursue a borrower for the difference between what is owed
to them and the amount that was paid to them. A real estate attorney should
determine if your loan qualifies for a deficiency claim or judgment.
Pre Foreclosure describes property in a
state of default prior to the Foreclosure Auction. Real Estate enters the
Pre-foreclosure phase once the lender posts a notice of public record that
the property owner is behind on payments (usually a couple of payments), and
they intend to exercise their right to Foreclose the property. They will
take back the property if the owner does not arrange for an alternative
plan.
Post Foreclosure - Real Estate is in
this phase is typically what Agents think of when they hear a property
labeled as a Foreclosure. The bank has taken back the property from the
homeowner and now refers to the home as Real Estate Owned or REO.
The Mortgage Forgiveness Debt Relief Act of 2007
made it even cheaper for owners of primary homes. Before the legislation,
homeowners who persuaded a lender to accept a short sale had to pay income
tax on the loan amount forgiven by the lender. Under
the new law, they won't have to pay taxes on the forgiven amount, up to the
original mortgage amount on the purchase of the home.
Foreclosures - Florida ranks second in
the nation in foreclosures with 286,285, according to data collected by
RealtyTrac, a company that tracks foreclosures. The top five foreclosure
states are: California with 627,440; Florida with 286,285; Ohio with
115,954; Michigan with 112,969; and New Jersey with 64,636. Florida has
reported 178,850 new foreclosures since Jan. 1, with 15,877 in June. The
average sales price of a foreclose is $169,235. The top five Florida
counties reporting foreclosures in June are: Broward: 7,104; Lee: 5,132;
Miami-Dade: 5,087; Orange: 3,087; and Pinellas: 2,061.
Properties For Sale at Auctions. The amount of time before
auction varies ... but averages 3 to 6 months. A Florida real estate owner in
Pre-foreclosure can have a strong desire to sell
their way out of trouble.
4th quarter 2008 The credit markets are not settled yet, although the
mortgage market stabilized with the government takeover of Fannie Mae and
Freddie Mac. Inventory remains high, and price declines are pressuring
owners,” he said. “Additional housing stimulus would stabilize prices more
quickly, which in turn would bring faster stability to Wall Street. Removing
the repayment feature on the first-time buyer tax credit and permanently
raising loan limits would bring more buyers into the market and further
reduce inventor.
Sellers who are forced out of
their homes are usually not pleasant to work with. The bank employees who
are just doing their jobs follow procedures that many times keep the buyer
in suspense. Because of the large amount of foreclosures, banks are
loaded with work and their response time could be lengthy. Even though
they want to sell a home, they will push to get the best price. They might not play by your rules, they have their own
paperwork and time frames. Unlike real home sellers, they’re not
really attached to the properties they sell. They could take 1-3 months just to
respond to your offer, and it could take sometimes 6 to 9 months to close a
transaction. In most of the cases, their counter-offer to the buyer will be
the actual appraised value which could be much more than the asking price
you saw in the (MLS) Multiple Listing System.
There is no guarantee that a lender who accepts the short sale will not
legally pursue a borrower for the difference between what is owed to them
and the amount that was paid to them. A real estate attorney should
determine if your loan qualifies for a deficiency claim or judgment. Whether they call it a foreclosure, pre
foreclosure, bank owned, short sale or a distressed sale, a pre-foreclosure
is the keyword for searching the best deal. West Coast Florida Real Estate continues to offer homes and condos for sale at prices
that buyers are
benefitting from.
July 30, 2008 The Senate passed
and the President signed a landmark housing bill to shore up the nation's
housing finance system. The bill contains billions of dollars in loan
guarantees, a tax break for first-time home buyers and many other
provisions. The rescue plan extends an unlimited line of credit to the two
mortgage-finance giants Fannie Mae and Freddie Mac for 18 months and gives
the Treasury the authority - also for 18 months - to buy Fannie and Freddie
shares if the Treasury deems the companies’ capital to be inadequate.
From 2003 thru 2006 the Florida real
estate market in particular was hot. Some people were getting loans that were very risky
and in many cases they were not qualified for. Many were not for homes as a permanent residence, but for condos to rent out as a
secondary residence while waiting to flip it for a much higher price...like
so many were doing back then. So called Teaser Rate Loans
and 100% stated products were sold to condo investors and people that were not
qualified financially to pay for a traditional loan. The real estate market
was growing so fast that these people would take out a home equity line of
credit, when they needed more money. They assumed that since their current
home had gone up in value...so would their investments. As time went
on...the real estate market came tumbling down because of sub prime and
exotic loans to poor credit risks.
The
short sale process can be significantly less expensive and a