SHORT SALE AVOIDS FORECLOSURES OF SOUTH FLORIDA REAL ESTATE
May 22, 2008 by Hollywood FL Re... comments (1)There has been a lot of talk lately in the press about the real estate market and the short sale market in particular. Many people may be confused about what a short sale is. A short sale occurs when a seller owes more then the property is worth and the bank is willing to accept a sale for less than the mortgage amount.
This represents a wonderful opportunity for both buyers and sellers. A short sale avoids foreclosures of South Florida real estate and homes and impacts the seller’s credit much less harshly than a foreclosure as it shows up on the credit report as paid in full.
Additionally, with a traditional foreclosure, the bank can get a judgment against the seller for any difference between the loan amount and the final sale price. In a short sale the bank marks the loan as paid in full and the seller does not owe any additional monies.
For buyers the opportunity is wonderful because they can often purchase a property for significantly less than market value. I am currently purchasing a short sale property myself where identical units in the complex sold for up to $200,000; I am purchasing the unit for $123,900 with a $3,000 seller contribution, making the sale price $120,900. I will rent it out as soon as I close on it and will hold it until the market corrects itself at which time I may consider selling. It is important when looking to buy or sell a short sale that you use a short sale agent because it is a very complex process that needs someone to walk you through it step by step.
Please feel free to view our short sale website for sellers at: www.southfloridashortsale.com, and don't hesitate to contact me directly for a list of short sales and foreclosures in the South Florida Area.
Ellen Bithell
Sells South Florida
954-862-2631
www.homeinsouthflorida.com
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Posted in: Short Sales
Ellen,
Nice post. I do have a bit of a difference on\f opinion and it might just be a misintepretation of your views on my part. You said that you can purchase a property well below market value. I hope you were comparing to past sales and not recent pricing. The false impression that the lenders are willing to accept any offer thereby causing many to submit substantially lower prices is what is leading to the longer time frames for the approval of these short sales as the lenders are balking as these price points.
As a matter of fact, there is a false impression that the market is at a standstill because there are no buyers out there causing the market to continually lower their prices. These arguments are being made to the lenders and at the same time they are sending in multiple offers. Can we remember what we all did when we received multiple offers in the boom market? We wanted to get more, right! The truth of the matter is that the market is being affected more by the erroneous belief that submitting several offers will better give the seller an opportunity to close with an approval. That is not the fact. There are hundreds if not thousands of buyers out there waiting to purchase properties, but while they wait with several other buyers to purchase the same property other hmes are just lingering and lowering their prices even more causing lower offers. Can you see a pattern? The market needs to let all these buyers buy a home and not just sit around. They should be able to purchase other properties thereby stabalizing the market and making it more likely for the pricing to be at a more realistic level that the lenders will be willing to accept leading to more closed sale and more clients being helped.