If when you purchased you home, you put down less than 20% - you most likely have PMI (mortgage insurance). With the huge number of mortgages in default, PMI companies have been hit hard. PMI companies are party to the short sale transaction and must sign off of the transaction or it won’t happen. In an effort to recover some of their losses, they are frequently requiring some type of payment plan for short sales. These promissory notes can vary in price but are generally a low monthly payment.
Please note that you may not know that you have PMI on your first or second mortgage. Most mortgages are written in such a way that the lender reserves the right to add PMI to a mortgage if they feel it is in their best interest.
Are you a seller? A Realtor®? When it comes to the initial meeting between both parties, it is important to understand each others agenda.
The Seller’s Agenda
- Discover what their home is worth
- Determine what the agent plans to do for them
- Establish costs of agent’s services
- Determine how much the seller will NET from the sale
The Realtors® Presentation
- Visual inspection of the property
- Discuss the seller’s goals, needs and expectations
- Establish agents qualifications and credentials
- Determine the correct listing price
- Complete paperwork
Given the overlap between the seller’s and the agents needs, the flow of the listing appointment should be easy and natural. After all, the Realtor® needs the inspection of the property to fully determine value, the agent needs to know the seller’s motivation and the seller needs to know the marketing plan and timelines, the seller needs to know the compensation plan in order to learn how much they will potential earn. Both parties need the listing agreements and disclosures completed in order to move forward.
Remember, for the sale of a home - the seller and listing Realtor® are on the same side and both have to work together as a team.
SOURCE: http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=233301
There is really no “right way” to walk away from a home. You need to know the consequences, both for liability to the loan as well as federal taxes.
Making the decision to just walk away doesn’t just affect you and your credit today. In Florida, lenders have up to 20 years to collect a deficiency judgment.
Add to that the potential tax ramifications and it can really COST you to foreclose. While The Mortgage Debt Relief Act of 2007 (extended) temporarily provides some tax shelter of the 1099-C or 1099-S income owners will incur for the first mortgage on your homestead, it doesn’t cover the second mortgage or investment properties.
A foreclosure can ding your credit up to 300 points. It will stay on your report for seven years. It is important to really consider your options before you choose to “walk-away.” You do have options.
Deed-in-lieu: if you qualify, you can voluntarily turn the property back to the lender, saving them the cost of foreclosure. This will still ding your credit, but not as badly and potentially erases or significantly lowers your future liability.
Short Sale: it costs the lender less to avoid the foreclosure and they avoid holding costs. That makes short sales a favorite alternative for lenders. Even if you are on the brink of foreclosure, a good short sale agent can stop the foreclosure and get you a sale. They do take time and require documentation from the owner, but they hurt your credit less then foreclosure and deed-in-lieu and can reduce or eliminate your future liability. It is still very important to have an experienced short sale agent negotiating on your behalf. More and more lenders are adding deficiency judgements to short sale approval letters. Make sure your Realtor® is watching for it. In many cases the verbiage can be removed or reduced.
If you do have gone through a foreclosure, short sale or deed-in-lieu, you should have an accountant assist you with your taxes to make sure you handle the 1099s appropriately.
Have you noticed your association mowing your neighbors yard? Wonder why?
Did you ever think that you could loose your home for $2400 or less? You can.
If you fail to pay your HOA fees, the association has the right to put a lien on your home. If you cannot work out an agreement and continue to default on your HOA fees, the association has the right to foreclose on your property. They will take possession for the time it takes the mortgage company to complete a short sale or foreclosure on the property. In some cases, the associations will rent the house back to the owner. In some cases, they will put in short term renters at a reduced rate.
While this was less common when owners had innate equity in their homes, that is often not the case currently in Central Florida. So, if your funds are tight and you are looking to “trim the fat,” you might want to explore other options.
Have questions or experience in this area? I would like to hear from you.
One of the common mis-conceptions that owners facing foreclosure and deciding on “if” they want to “bother” with a short sale concerns their owner personal liability after the fact. Most people wrongly believe that if the “just let the house go” to foreclosure, they are done. However, it is not the case. The deficiency judgment can allow the lender to pursue recovery of funds years later. Imagine working hard to repair your credit, getting a great new job and starting to finally get ahead.... And then the lender comes collecting...
In Florida, lenders can wait up to five years to file for a court judgment to make the borrower pay and they have up to 20 years to collect the cash once the judgment has been granted.
A short sale, done correctly, can protect you from the future liability of a deficiency judgment. However, many lenders are allowing the short sale to go through but including a deficiency judgment in the “Approval Letter.” You and your Realtor® must read every paragraph thoroughly to ensure no judgment has been included. If a deficiency judgment or the right to file one, has been included in the verbiage, your Realtor® can work with the negotiator to have it removed. While every lender and situation is unique, in many cases, they are willing to work with the agent to either limit the recoverable amount or remove the deficiency judgment.
With foreclosure, even though the lender has taken back the home and resold it, they are allowed to come back after the borrower for their loss. By doing the short sale instead of foreclosure, the owner has a better chance of removing or limiting the deficiency. But you must read the fine print!
The sales of Florida’s existing homes rose 24 percent in January 2010 from the previous year. The sale of existing condos have increased a whopping 81 percent compared to January 2009. And, according to the latest housing data released by Florida Realtors®, for the past 17 months the sales activity has increased in the year-to-year comparison.
With the very favorable still-low mortgage rates, excellent inventory options and attractive prices, it is not surprising that the Florida real estate market has seen increases. These sales are aided by the need to have a purchase contract in place by the end of April to take advantage of the expanded federal tax credit.
According to NAR (National Association of Realtors®) Chief Economist, Lawrence Yun, “With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring with more areas showing higher prices.” Florida being one of the harder hit economies, that time-line may be a bit optimistic. However, it clearly exemplifies the need to accelerate purchase plans and not wait too long to buy.
From the creator’s of the Orlando Foreclosure Bus Tour - The #1 Rolling Real Estate Classroom comes Daily Mini-Foreclosure Tours. These
FREE Foreclosure Tours are done daily from 10am to noon, Monday through Saturday.
Attendees will start with a review of the materials covered on the 6 hour “Rolling Real Estate Classroom” and then view between 8 to 10 Bank-Owned Homes. In addition, attendees will receive an adaptation of the binders from the Original Orlando Foreclosure Bus tours. These binders will contain the REO Must Knows from a Real Estate Broker, Mortgage Banker, Home Inspector with 20+ years of experience and a Real Estate Attorney.
The Daily Mini-Foreclosure Tours are by appointment only.
You wouldn’t think that at first that a shipping website,
www.freeshipping.com, would or could help you sell your home. However, they have a blog all about being Frugal and in today's market, that is news you can use! One article that really caught my eye is entitled “9 Tips to Sell Your Home in 2010.”
Now, I only found 8 tips - but they are good ones:
- Don’t wait for recovery
- Make Improvements
- Hire Professionals
- Get Downpayment Assistance
- Take Uncle Sam’s help
- Price Accordingly
- Energy tax credits
- It’s not personal
For more details, you can view the whole article at
http://www.freeshipping.org/blog/9-tips-to-sell-your-home-in-2010/. If you can find the 9th tip, please let me know.
Home Seekers: Looking for active MLS listings in your area right now? Download myAgent IDX application and find your dream home now using the dynamic map search tools.
Just download via ITunes and then enter our office “IDX Agent Code,” this will get you immediate access to all the active listings on the Mid Florida Regional MLS (Central Florida MLS).
IDX Agent Code: 4654
It is evident to all that the record low prices and government tax incentives are driving buyers in the Florida residential real estate highway down the fast lane. The question is, what are you driving? Cash Investors in GREEN bring quick close deals and fewer appraisal issues. First Time Home Buyers in RED can be halted by financing delays, appraisal re-negotiations and FHA inspections or repairs.
Both first-time buyers as well as investors are taking advantage of the deeply discounted short sales and foreclosures so prominent in our Central Florida market. However, both are not being received equally. “Even though a first-time buyer may be offering the same price as an investor, or a higher price, the investor has the edge,” states Jed Smith, a National Association of Realtors® researcher. “The investor may actually pay less, but it’s cash, right now.”
Because lenders might refuse to approve a deal after inspection or appraisal, the financed offer holds more inherent risks to the seller. Therefore, they may be willing to accept slightly less for the more solid cash deal.
According the the article posted on Florida Realtors® website, “
Investors squeezing out homebuyers by paying cash,” we have seen a 6% increase in the share of resale homes bought entirely with cash from December 2009 to December 2010. In areas where foreclosure properties account for the largest market share, cash is even more important.
First-time home buyers, just consider the race that you are driving when it comes time to put in your offer and just keeping speeding forward. Don’t underestimate the value of a knowledgeable Realtor® in the car.
Savvy buyers today are looking for the best resources to get the best deals. At Z House Realty Group, we believe in being the SOURCE for the latest real estate technology. Along those lines, we are excited to announce our newest feature:
FULL FORECLOSURE SEARCH for the Entire Mid-Florida Regional MLS! That's right, you can search Foreclosure Homes in Orlando, Oviedo, Winter Springs, Winter Park and beyond.
You can Search ALL Available Foreclosures by Map, Subdivision, City/Zip and more. In addition, you can save them as favorites, setup automatic e-notifications to receive the latest FORECLOSURE listings by email, as they hit the market and more. So, if you are looking for the best source for your Central Florida real estate and foreclosure needs - YOU FOUND IT!
Check it out now at www.ZHouseRealtyGroup.com and Search Foreclosures, including pre-foreclosure, foreclosure and bank-owned homes!
If you have questions about purchasing a foreclosure home, we would be happy to help answer them. Our agents are experienced with dealing with Short Sales, Foreclosures and Bank-Owned/REO homes. Let us help you make the best deal! Call today at 407-208-1221. Thank you!
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Jesup's Reserve, Winter Springs - We invite everyone to visit our open house at 108 McLeods Way on December 13 from 1:00 AM to 3:00 AM.
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Avalon Park South, Orlando - We invite everyone to visit our open house at 4133 Alcott Cir on November 22 from 2:00 PM to 5:00 PM.
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Avalon Park South, Orlando - Announcing a price reduction on 4133 Alcott Cir, a 3,080 sq. ft., 3 bath, 4 bdrm single story. Now 
MLS® $295,000 - Short Sale - MUST SELL!!!.
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When purchasing any property, it is a good idea to get a home inspection. Once you have the inspection report, what next? Review the findings, determine if they are cosmetic, structural or will require extensive repairs. If you have a repair limit on your contract, then you will need to prioritize your repairs and document those that you would like completed. An addendum or the inspection report will need to be provided to the seller. However, if your repairs exceed the repair limit or you have an as-is contract - you face a dilema: Withdraw or Not?
Only you can truly know when it is appropriate to withdraw your offer to purchase. In order to make this determination, you should look at the home inspection, termite inspection and any contractor’s estimates together with the agreed sales price of the home. If the total to purchase and repair is higher than:
a. The values in the neighborhood.
b. The amount of money you have available to spend.
c. The amount of money you can qualify to borrow.
OR
d. All of the above
Then you should walk away from the purchase. It would be impossible for almost anyone to know in the approximately 20 to 40 minutes you spend initially looking at a house to determine if this is the right purchase for you. Remember that the bank has no knowledge of the issues and/or repairs a home has undergone in most cases. When buying foreclosed properties you have to be an investigator before an investor. Use caution, good sense and as many resources as you have available in making this major investment in your life.