I get a number of calls and questions on a daily basis from people curious about how short sales work and since I do my work in Florida, let’s go over short sales in Florida.
A short sale is any time the owner of a home falls behind on their mortgage payments and needs to sell the property but cannot because they are upside down on their mortgage, and therefore they owe more on the property than it is really worth.
When this happens, after a period of non-payments the financial institution will inform the homeowner that they will need to get started on the short sales in Florida process and list the home with a Realtor. During this short sale process the bank will generally remain out of the selling cycle until the Realtor brings forth a sales agreement for the property.
Once a sales contract is crafted and submitted to the bank, the lending company often takes 90 days or maybe more to respond and occasionally it can take more than half a year to hear a reply from the loan company.
Often is the situation when the lender does ultimately answer it comes in the form of a counter offer. It’s not too unheard of with a short sale in Florida that this counter offer is much higher than that of the listing price and thus is over priced for the market conditions. This kind of variation in market price comes about largely because the bank is basing its figures on what the property was worth. But the simple fact is in the current market conditions of decreasing home values, banks commonly are not always current with the housing marketplace in a particular geographic location.
Some short sales have a payoff negotiated, although oftentimes the lending institution’s loss mitigation department won’t even being assessment until they obtain the first offer. The procedure is obviously long and drawn out and you don’t automatically get a good deal. Occasionally, waiting out a short sale is beneficial but usually it can be such a headache that it’s better to wait until the house is in full foreclosure. Because of this unfavorable history that short sales possess, at times a property listing can be tricky – it could say that the home is in “pre-foreclosure” or that the listing is “contingent on lender approval”.
Regarding short sales in Florida, the important point is to be patient, do your homework, and ask plenty of questions before going ahead and submitting an offer. The perfect and most useful question to ask is, “has the mortgage holder negotiated a pay out?” If this is the case, meaning that a payoff has been authorized by the lender, then the overall process generally moves much speedier on a short sale.
An important note to consider in all this is the fact that if a house has more than one mortgages, every one of the mortgage companies that take part in this will need to approve any offers. If multiple mortgage suppliers take part in the short sale in Florida, as you can imagine this will mean an extended more protracted process and more challenges to get over.
With short sales in Florida it’s a big benefit for you to use a Real estate professional who possesses experience successfully negotiating this type of financial transaction. Otherwise, it will probably be considerably more challenging to get the deal closed. Dealing with and negotiating with lenders and mortgage suppliers is different than dealing with an average homeowner.
There are various forms to put together, unique hoops to jump through and extra conversation that must occur. Have a look at choosing a Real estate professional who has substantial experience in short sales in Florida.
