Short Sales vs. Foreclosures
This section will be an ever expanding one that I will continue to add material to every month. I am very well qualified in both of these types of transactions, and would like to share some of my knowledge so that you can get a basic understanding of some of the considerations regarding a distressed property. If you understand the process, you will be able to better assess specific situations as both a buyer or a seller. And hopefully you will realize that with so much on the line, it is especially important to have a qualified professional guide you through these processes.
As for why pre-qualifying the short sale in question from BOTH a seller and buyer standpoint is so important is because the success of a short sale being approved essentially has to do with the seller and their specific circumstances, the bank and their specific considerations for such, and the listing agent and their ability to present to the bank a professional package with all materials needed for the bank to make their decision quickly, efficiently, and hopefully in all parties best interest.
Obviously the strength of the offer and quality of the buyer plays into the decision as well, but that typically will come secondary to the 2 very important considerations listed above.
As a Certified Distressed Property Expert (CDPE), I am well qualified in short sale or foreclosure situations, and have various resources and tools that will prove helpful to those owners in distressed situations. I have also developed relationships with professionals in California, where like Florida, has a large amount of distressed property owners. Please don't hesitate to contact me if you have any questions about these types of properties, as a buyer or seller. You really need someone who knows what they are doing more than ever in these types of transactiona, and I can help you. As I outlined above, this section will continue to expand, and new in January 2009 is the following:
California Association of Realtors has created several new resources for REALTORS® and homeowners seeking information on existing mortgage workout programs. To provide members with one easy-to-use document, a chart was developed outlining programs offered by the larger lenders and government entities, including a snapshot on eligibility requirements and contact information. If a lender or loan servicer is not on the chart, homeowners may wish to contact their lender or loan servicer to determine if a workout program is available.
HOPE For Homeowners (H4H)
Countrywide Financial (Bank of America)
Citigroup, CitiMortgage
JP Morgan Chase & Co.
IndyMac Federal Bank, FDIC
Federal Government Loan Modification
To understand some of the very different consequences regarding these 2 separate Distressed Property situations, please click here.
This section is meant to explain in more detail what is happening in my market regarding foreclosures (REO, stands for Real Estate Owned). There are many 'buyers' who are 'looking for a good deal', but ultimately a lot of these 'buyers' I feel will fall into the 'woulda, coulda, shoulda' category I have come to familiarize myself with through long hours of frustrating work leading to a massive amount of wasted time on my behalf as well as the buyers. The best bargains are the ones that go the quickest, and I uncover them every week, the question is whether the buyer is brave enough to overcome the sensationalism the media tends to report on any sort of negative event. In addition to the negative sentiment is the attempt of the media to report on the real estate market in very broad terms when it is so localized in nature. For example, Miami Beach is a completely different market than Miami; Within Miami Beach, South Beach is a different neighborhood than those of Mid Beach and North Beach; Within South Beach, South of Fifth is a different neighborhood within other areas of South Beach; Within South of Fifth, one building differs from other buildings in the same area. It is near impossible to successfully navigate through the intricacies of the various areas without the experience of a professional who can add value with their knowledge, negotiating skills, dependable resources, and all other aspects that go into the purchase or sale of Real Estate. There are some important points to consider for someone who is a 'buyer looking for a good deal':
- The laws of supply and demand is the direct indication of price, and vice versa. Therefore, in a category such as oceanfront in South Beach and built after 2005 there is a relatively low amount of supply and at a certain price point the demand will absorb that excess supply. What is that price point, it varies from individual to individual, so in these instances I let the data speak for itself. Based on a buyer/investors investment criteria, I can help you determine which products best meet that criteria.
- Based on the laws of supply and demand, waterfront property in my target market has a lot of pent up demand over the past 3 years whom have been waiting for prices to fall in order to 'get a bargain'. So please believe me when I tell you that the best bargains are had by the strongest buyers whom are able to move quickly. This is the reality of my target market, it is International in scope, attracts primary, vacation, and investment property buyers, and has not seen the overbuilding of numerous other Florida markets. Of course this is very objective because there can be emotion involved should someone have been waiting for the perfect vacation home to come on the market at a price they can afford, and what might be a bargain to one individual might not be to another, so please keep this in mind.
- Current market value is the most recent closed sales in a building, or similar building (I would say within the last 30-60 days). That is current market value, and if you have seen a 50 percent correction from peak to trough, then one should not expect another immediate 30 percent discount on the already heavily discounted current market value. If you plan to try and time the market because you feel in 6 months the value will be 30 percent lower than the current market value of today, then in 6 months time is when we will find out if your analysis of an additional 30 percent decrease in market value was accurate or not. And if market value has stayed the same or whatever it has done, reasses the situation and make a decision based on the data.
- When a bargain does present itself, there are numerous other bargain hunters whom also have this bargain in their 'crosshairs'. So when my advice is to position yourself as a strong buyer, whether that means; a cash offer price with a quick closing date; or at least 20 percent down and submitting an offer WITH a pre-approval letter from a lending institution; or putting some 'skin in the game' in the form of an escrow deposit that is large enough to be tough to walk away from should you breach the contract but small enough to stay within your comfort level; or simply putting an offer in writing in order to show you are a serious buyer and not just waiting for a bargain that will never present itself based on your criteria (This is not meant to say that a bargain will never present itself based on your criteria, but if during our consultation, my professional opinion is that in the current market the criteria an buyer/investor is looking for is not being met then we continue to stay in touch and wait for your criteria to be met).
- Two similar buildings right next door to each other can completely differ in the quality of the building, therefore affecting the supply vs. demand, therefore affecting price, therefore playing into a purchasers decision based on their specific criteria. Some examples would be: a stronger condo association because of less speculators purchasing in a building, upcoming or current special assessments for projects or maintenance or budget shortfalls, pending litigation for any number of reasons, unusually high amount of delinquent owners or short sales and/or foreclosures, or numerous other issues that affect the associations financial position; a better built building whether it be the builder or materials used or stricter code enforcement; one might have much better views and layouts due to the shape and position of the building; one might just have a better reputation for any number of reasons; etc.
- Most of the owners in my market tend to be outside of Miami, whether it be from another City in Florida, from another State, or from another Country. I not only live in my target market year round, but I also own property in this same market. I support my family on my 100 percent commission occupation, Real Estate. I develop long standing business relationships with my customers that are mutually beneficial. I add value to the purchasing/investing process with my abundant knowledge and guidance on what to look for. All real estate is local, and I know my market very well. It is not just the price one must consider but so many other issues; views, finishes, reputation of building, financing, neighborhood, schools, rental policy and rates, market value, condo association, condo approval, contracts, escrow, closing agent, special assessments, maintenance costs and reserves, property management, new development in the area, commercial space in the area, and so on. My point is that I am very good at what I do and if you are truly interested in my services and the value I will add to the buying or selling process, then I look forward to EARNING your business. But if you feel you are better off doing this on your own, I humbly ask you to be honest with your intentions should you decide to contact me for information. On that note, SELLERS typically pay the commission in our market, NOT BUYERS, so I wouldn't understand why a buyer wouldn't want someone representing them in the transaction?
With this being said, I welcome you to fill out the below information form with more specific questions you may have. There is so much involved in a foreclosure and even more so in a short sale transaction, and I can definitely add value to one of these types of transactions from either a buyer or seller standpoint because I understand the process. But they are so detailed in nature, and vary so much from situation to situation, that a 1 on 1 consultation is the best way to determine if you are a qualified candidate to list your property as a short sale, or if you feel as a buyer you should pursue a short sale or a foreclosure for purchase and know what to expect.
