January 2010

Found 8 blog entries for January 2010.

A hot topic:  Why do Short Sales Take So Long?

As home values have dropped by 20-30%+ in Jacksonville and Ponte Vedra, FL, many of the real estate transactions taking place are Short Sales.  The only thing short in a short sale is the amount of money to cover the existing mortgage.  By nature, short sales are Long Sales interjected with frustration, happiness, frustration, and back to happiness. They take forever.

So why do Short Sales take so long?  I've attempted to answer this question in a 2 part answer:

Answer Part 1: Understand the volume. After all the red tape and big bank shenanigans to try and get you to make just 1 more payment, there is a person at the end of the line that is the "negotiator".  This persons job is to look over the

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Horror stories are now floating around everywhere about failed Loan Modifications.  I've witnessed many of these first hand as friends have attempted to get modifications and they flat out fail.

Several Major Concerns with a Loan Modification:

  1. You agree to "modify" a loan on an over valued house that could take DECADES to break even.  Bad idea.  So now you are pretty much payment over priced rent to a bank on a property that you won't have basically any ownership in until WAY OFF In the future.  Just a bad idea.
  2. 70% of loan modifications result in HIGHER Payments!  Check out the Loan modification article from Wall Street Journal.  This is not 50/50 but instead a very high likelihood that you will get a higher monthly payment when you jump
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Step 1:  Get pre-approved before shopping for your Waterfront Home

Ponte Vedra waterfront homes boat dock

Human nature dictates that we must always go shopping for a new waterfront home before we line up financing.  It's a fact of life.  Rarely have I ever met anyone that gets their financing lined up first before they started shopping.  I'm guilty as well.

The current mortgage market has made it increasingly difficult for home buyers of luxury homes, waterfront homes, and vacation homes to get financing.  CNN Money covered the issue very well:  $8mm in assets and can't get a mortgage.

The worst hit is the vacation home market.  Many of my contacts throughout the vacation home developers have stated that the only buyer is a cash buyer.  Most of the buyers who would normally

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I have many articles within this website advising clients to go down the path of a Loan Modification before they go for a short sale.  I reserve the right to change my opinion or contradict myself.  I currently believe if the home is too far upside down in value - you are better off getting rid of the house in order to help secure your future finances.  Otherwise - you may just be delaying the inevitable.  The 2nd problem: Banks are slower than Christmas on completing a loan mod: typical bank red tape.  So here we go:

Realistically, a Loan Modification is a BAD IDEA!  Here is why:

  1. Modify the current Balance PLUS: Your bank will attempt to Refinance your current balance including closing cost and any late payments.  This will ADD to your current
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The chart below is courtesy of Zillow.  It shows the current pricing trends in several areas of Jacksonville.  The graph points towards a slowing in the price drops on homes for sale in our area.

Zillow Home Value Index More Jacksonville Home Values
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Short Sales are very complex and take everyone working together to finally get an approval from the Banks.  To learn more about short sales you can go to our Short Sale Information Guide linked to below.

A trend has started to emerge within the Short Sales that we have been negotiating.  The banks, for what ever reason, have denied several short sales due to lack of communication with the Owners.

If the owner has fallen behind on payments, the lender will often start collection calls - sometimes twice a day!  Even after we have a buyer for the house and have submitted an offer to the lender, the calls keep coming in.  The banks are so over capacity with short sale business, the different departments within the bank have no idea of what is happening

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Hot question of the day: I owe $X, do you think the bank will take $y?

When selling your home via Short Sale, most people think the bank is concerned about what is owed on the property.  Regardless of what is owed, the bank's only concern is what the property is currently worth.  Again, the only real number is what the property is worth in today's real estate market.

That means, if you owe $1.5mm dollars on a beautiful waterfront home and the surrounding waterfront comparable sales point towards a price of only $900,000, the bank wants an offer around $900,000.  Will they do their due diligence to make sure they aren't giving it away:  YES!

If you need to sell and find yourself upside down in value, it's time to Short Sale.  It's the best option

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In the past month there has been numerous real estate predictions from hundreds of sources.  Economist, local papers, national papers, National Association of Realtors, local realtors, mortgage brokers, talk show host, etc.  Just about everyone of them fall into one of 3 categories:

  1. The Prices are going down
  2. The Prices are stabilizing
  3. The Prices are going up

I decided to unveil the Official Officer 2010 Real Estate Prediction:

Buyers will buy because they want a home.  They will choose the best location that their money can buy.  Their money will go further this year than last year and they will be happy with the purchase for many years to come.  Sellers will be able to sell their home in 2010 - if it is priced competitively, in

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Listing information last updated on November 13th, 2019 at 1:08pm EST.