There have been a lot of anecdotal stories lately about how appraisals and appraisers contributed to the real estate meltdown and are currently preventing the market from recovering. Your friends at www.condosaletrends.com (A certified general/certified residential appraiser in Colorado and Florida with 25 years of experience) would like to clear up some misconceptions. Continue reading “Real Estate – Appraisers are not the Culprits”
I usually let my real Real Estate life give me the inspiration for the article that I write each week. It makes me so excited when I find out that someone actually benefits from it so I hope that this one hits the mark as well. Lately there are more questions than answers so I thought I would take a minute to answer some questions that I get from customers in this ever changing market. These are actually questions from actual wonderful customers.
Q: Do you have to be a resident of Florida to do a short sale in Florida?
A: That is an easy one, and the quick answer is NO. Where you live is not important in whether you qualify, what is important is if you have a hardship or not. The thing that may be relevant to you is that if you are trying to short sale a property that is not homesteaded then there can be consequences. A lending institution can give you a 1099 on the discounted amount of the sale. I would suggest that you talk to an accountant about your unique situation. Many times you are already in such duress that the 1099 may or may not effect you much but again that is a question for your accountant.
Q: How long does a short sale take?
A: When I give you the answer you will wonder why in the world they call it short because the average time is 3-4 months from beginning to end. Patience and Persistance is the key during this long process.
Q: What in the world is that AS IS contract that so many short sales require?
A: Quite simply an AS IS contract is not like the old used car you drive off the lot and hope the engine does not fall out before you get home. An “AS IS with right to inspect is a contract that gives you the right to inspect the property to see if it will fit your needs without breaking the bank. There is a time limit which you specify in the contract but in Florida any buyer has the right to get out of the contract and get his earnest money back if the inspection is not acceptable to the buyer. MOST foreclosures and Short sales require an “AS IS” contract. Be sure to check the laws of your state because contracts do vary from state to state.
Q: What happens to my credit when I do a short sale or a foreclosure?
A: A credit bureau is the only true source of information for determining how a short sale and a foreclosure is going to affect a homeowner’s credit. It is my experience which is not to be taken as any form of legal advice, foreclosures usually show up as “FORECLOSURE” and can stay on a credit report for seven years. If a homeowner applies for a new loan or has their credit run, the foreclosure could show up. It is also a common disclosure many employers require on most job applications. A short sale is commonly listed as “SETTLED DEBT”, and can be much less harmful to credit. Please consult a credit bureau for how a short sale and a foreclosure will actually affect a homeowner’s credit. Most people are in financial straights by the time they consider a short sale so their credit is usually the last of their worries.
Q: Why would a bank even consider a short sale?
A: Time is Money. Foreclosure action is expensive and lengthy. During the 12 month or longer foreclosure process, the property is a non-producing possession that is declining in value every day. If the property becomes vacant and/or vandalized, it will cost the lender(s) even more in repairs, maintenance and security. When a foreclosure is complete, the lender(s) must still hire a local Broker to list and sell the property. The lender(s) will compare the cost of the Foreclosure vs the cost of Short Sale. If there is little or no equity in the property, the lender(s) will have to conclude that its better off accepting a short and immediate sale. Lender(s) would rather help you find ways to come current on your home mortgage or approve of a short sale than foreclosure.
Q: When should you make the decision to start a short sale?
A: AS soon as you are no longer able to make your payments due to a job loss, illness, change in financial status, divorce or an adjustable rate mortgage that has risen to unmanageable limit you should consider a short sale. I know many people that are just frozen and just want to let the cards fall where they may and just wait for the foreclosure process. Doing nothing assures that a foreclosure is pending which could be the worst possible solution for you.
Bottom line: trust your friends for dating, hair cut opinions and just plain old fun but for Real Estate go to your trusted Realtor and see what she has to say on the subject. If she does not know the answer I bet she can help you find out. Thanks to all of you who keep calling me with your questions and thanks to all my Real Estate croanies for all your great answers.
IT seems that there are a lot of people excited about the market and sometimes buyers want to venture out on their own to purchase property whether it be by auction or a regular sale. There are some rather convincing reasons to use a Realtor to help you wade through fact and fiction and what is really a deal and what is just great marketing. To help you make that decision to use a” Realtor or not” let me give you some good motivation.
- A Realtor can help you determine what property would best serve your personal needs whether it be a straight investment or just a home for your family.
- A Realtor is more able to negotiate the price of a home on your behalf given that she knows the values of the local market. She also will make sure that you are pre-qualified so you will actually be looking at properties that will work for your unique situation. In addition, often times, a Realtor is better equipped and more experienced in negotiating real estate transactions.
- Home buyers almost never pay a commission to the Realtor therefore you get professional guidance and advice and a better deal on your new home with no cost to you. The only time a buyer would pay a Realtor commission is when agreed upon in advance, but in almost every case, the real estate commission is paid by the seller. Keep in mind ESPECIALLY when it comes to auctions YOU DO NOT GET a break by not using your Realtor. Your buyers premium is 10% whether you use a Realtor or not. Make sure you give them a call before you attend an auction and use their wisdom of the market and the property. For example, at the Island Reserve auction last Saturday, there were several examples of a little good timing and some sound advice saved in excess of $20,000.
- This is a big one and I have seen the sad results of this one from friends. It is important especially if you are not from the area to have a local Realtor who is familiar with the neighborhood that would best suit your needs as a buyer.
So basically a knowledgeable Realtor can actually save you a dollar or two and besides give them a call because if they are doing it they love what they do and they get so excited to share it with you!!! I actually wrote this because I got a really sweet call from one of our viewers that was not quite sure if it would cost her extra as a buyer for us to help her and I thought I just better clear that up.
We’re not going to beat around the bush here, we’re trying to make a living selling real estate, but we wouldn’t be doing this if it wasn’t what we love. First and foremost, we are relationship people. We are here to help you find what you are looking for. Many times we have turned people away from things and sacrificed commissions because it wasn’t what our buyer was looking for. We are always fair and honest, and if you ever have any questions, you can call us any time. And I mean, you can call us for ANY questions regarding real estate, and you don’t have to feel obligated to work with us. We just want to help you save money and buy your dream.
Thanks so much for watching our little show and for all your kind words….. we love it.