After about 4 months of not paying your mortgage, most banks have an automatic button that gets pushed to start the foreclosure process. You will know when this happens as they will “serve” you papers.
Being served foreclosure papers is not fun. The first thought is that you must move by morning….which isn’t true.
You will have to move, but not for some time. The average time in Florida is 12-18 months for a bank to file suit and finally auction off the house. You have time on your side.
Important items to know:
- When served papers, Lis Pendens, you have 20 days to respond to the suit. Talk with an attorney immediately. Just about every attorney on the planet will tell you that you need to respond to the suit. If you don’t, it gives the go ahead for the bank to move forward.
- What’s your plan? Obviously you are planning on leaving the house at some point. Know your options! At all cost, avoid a foreclosure. There are too many good options available to get rid of the house vs just walk away from the home and letting the bank take it back. Avoid Foreclosure Options
- Don’t wait too long to take action! If you decide to do a Short Sale (which you should), don’t wait until the last minute. It’s a buyers market so homes are selling much slower. We need time to get the home on the market and get it sold.
- Work with Professionals. Most REALTORS are staying away from Short Sales as they are much more difficult and have many potential pitfalls along the way. Make sure to work with a Specialists team like the Brad Officer real estate team. Working with the Brad Officer real estate team, you will work with a prominent Short Sale attorney who will represent you in negotiations with the bank and the transaction.
Meet Brad
Jacksonville RE/MAX Specialists Agent – Short Sales
A few years ago, if you mentioned a Short Sale, most people would look at you with a puzzled look on their face. Today, many are becoming educated on exactly what a short sale is…first hand. It’s becoming a common term in every household.
I predict over the next 12 months the term “Short Sale” will be used almost as much as “Foreclosure”.
The driving factor:
- The banks are increasingly more willing to allow a seller to sell a home for less than is owed = A Short Sale. The banks would obviously rather sell while an owner is keeping up with the property trying to get it sold vs. a Foreclosure where an owner has usually bailed out months if not years before the bank puts the property up for sale.
- HAFA which stands for Home Affordable Foreclosure Alternatives program. This is the Treasury Department releasing guidelines for lenders to follow when completing a short sale. “Guidelines” being the key term as it is completely voluntary. This program kicks into gear on April 5th, 2010. If nothing else, it’s sure to help streamline the system to some extent. You can read about HAFA here.
A few places to visit:
Information on how a Short Sale works
Meet Brad Officer, Jacksonville Short Sale Realtor – RE/MAX Specialists Agent
Waterfront Short Sale in Jacksonville Florida
5243 Trout River Blvd, Jacksonville, FL 32208
$250,000
2800 Square Fee
4 Bedrooms, 3 Baths
Double lot on Trout River. Complete with boat dock and boat lift. From Trout River you have access to some of the best fishing and water sports in North Florida via the St Johns River, the Intracoastal, and the Ocean. House is well cared for and ready for move in. Contact Brad Officer if you would like to see this house or have your REALTOR schedule a showing for MLS# 514438.
Brad Officer – Short Sale RE/MAX Specialists – Jacksonville and Ponte Vedra, FL
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 Short Sale Package and make a decision one way or the other. You will never have anyone from the bank give you this persons contact info, just won’t happen. Your contract for purchase of your property must sit and wait in line behind 499 other bonafide real estate purchase agreements waiting for an answer on their short sale. This part takes forever.
Answer Part 2: Understand the Financial impact to the bank. If a bank can put together systems to check your credit and send you junk mail offering all kinds of credit card offers every 3 days, they can surely put together a system and processes to flush thousands of short sales through every day. Obviously they have the resources to do this. However, they choose not to.
When your mortgage is $300,000, they have an asset on their books worth $300,000. Even if you stop paying, it’s still an asset. Once they agree to take $200,000, they are instantly worth $100,000 less. So in essence, they are strategically taking calculated losses by accepting short sales every month….but not too many as they would be instantly worth much less. Stock holders would panic and the bank could potentially collapse.
Conclusion: Once your Short Sale has a contract, it takes the bank 60+ days to give us an answer. The banks are being pressured to speed up the process, but that’s risky business (see answer part 2 above). The best way to make sure your short sale goes through without any issues: Work with an agent that has a lot of knowledge in Short Sales. If you are reading this, you found one. Meet Brad.
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:
- You agree to “modify” a loan on an over valued house that could take YEARS/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.
- 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 through all the hoops.
- You will NOT get a principal reduction. Principal is the balance of what you owe the bank. See the article above.
- Crazy amounts of frustration, red tape, and bank shenanigans will be your path. Need a story of what it will look like. Read this persons experience with a loan modification process. If you need more stories, ask around in Jacksonville, Ponte Vedra, and Orange Park, FL. Many of your friends and neighbors are going through this first hand.
- Only 7% of those who applied for a modification actually received a permanent mod. 7% is a tiny fraction.
- If you are one of the very few lucky ones who actually get approved for a permanent modification, it’s a 25% chance that you will fall behind on payments again. Read this article from Bloomberg about loan modification recipients fall short.
If you have faced a financial hardship and find it difficult or impossible to make your mortgage payment, You should face reality that your house needs to be sold. Get out of there and move on to the next chapter.
Short Sale, Deed in Lieu of Foreclosure, and Foreclosure are your next options to get rid of the house. A short sale is the banks preferred option and will almost always be recommended when you do not get a loan modification.
To learn more about how to Short Sale your home in Florida, check out the Short Sale information guide.
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 recommend this as many times the banks will want you to try a loan modification before they would want you to short sale. It’s typical bank red tape.
Realistically, a Loan Modification is a BAD IDEA! Here is why:
- 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 Balance. Your current balance is more than the home is worth. Bad Idea.
- NO Reduction in Balance: Your bank will not agree to reducing the balance you owe them. You may think they will, you may have read something on their website, you may have a friend who is telling a white lie, but it will not happen.
- Affordability: End of the day, you can’t afford the house. Most likely a hundred or a couple of hundred dollars reduction in monthly payment will not help you in the affordability area.
- Limited Success thus far: A tiny fraction of people going for a loan modification actually get one. The problems are well documented within every real estate and news source in the country. Just Google “Loan Modification problems” or any other string of keywords. The stories will give you a small glimpse in to your future modification struggles.
- Credit Score implications: Most banks will not work with you on a modification unless you stop paying your mortgage. Once that happens, you will start getting dings to your credit. 3-4 months into it, you will still be getting the run around from your bank. Around 4 months of non-payment many banks have an automatic foreclosure button that gets pushed and you may end up getting served papers. Now you are in a bigger problem.
- Bad Investment: Your house is your home but it is also an investment. Investments can be good or bad, but you must know when to bail out. If the investment has gone bad, it may take a decade or more to get back to the value where you break even. (Remember, real estate typically has about a 2% average appreciation.) You will be paying interest on an overvalued investment. Interest is also known as Profit to the banks.
- Delay the Inevitable: If you are one of the lucky ones to reduce your monthly payment to something that is manageable, congrats! For those lucky ones I anticipate many will end up in Foreclosure or a Short Sale at some point in the next few years. I believe this because their houses will still be worth less than they owe which will prevent them from selling should another job loss happen, a medical emergency, a job transfer, etc.
Options for a Over Mortgaged home that you can no longer afford:
- Loan Modification: See above.
- Short Sale: In my opinion, your best option. This is selling for less than what is owed with the banks approval. Read about Short Sales information for Florida residents.
- Deed in Lieu of Foreclosure: Deeding the house back to the bank voluntarily. Bank will want you to attempt short selling first and then might consider this before they foreclose.
- Foreclosure: Walking away and giving up.
We meet with clients daily who need to sell a property and are overly frustrated with their bank. Don’t wait too long before you make the decision to sell. It still takes time to sell a home in this market: Even a short sale. Contact our team if you would like to schedule a meeting to discuss your options.
Jacksonville Short Sale realtor Specialist – Jacksonville REMAX
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.
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 if a Loan Modification doesn’t work or doesn’t help. It’s the best option as opposed to a Foreclosure.
Learn more about Short Sales by viewing our Short Sale Information Guide for Jacksonville Home Owners.
Short Sale a home in Jacksonville FL
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.
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 in the other departments. Therefore, you can tell the collection agent that you have a short sale till you are blue in the face, but they will just call again tomorrow.
The owners, can’t blame them, get irritated and stop taking the collection calls. At some point in the process the negotiations start to happen, the short sale attorneys representing the seller are communicating with the lender, the listing agent is communicating with the lender, but the seller/owner has stopped communication due to the harassing collection calls. At that point, several sellers/owners have received rejection letters due to “lack of communication”.
This has happened with Wells Fargo’s short sale department….so far.
Short Sale Tip: As much of a pain as it is, take the collection calls and tell them, “I am short selling my home, I have a contract that we have submitted, we are waiting for your negotiator to give us an answer, are you the negotiator?”
Short Sale Tip Bonus: Send your bank a certified letter stating the above.
Short Sales are a mess, but they do serve a purpose. In this slow and messed up process with the banks, the more communication you can have with them, the better!
Jacksonville Short Sale Specialists – RE/MAX Agent
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:
- The Prices are going down
- The Prices are stabilizing
- 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 good condition, and has good curb appeal.
Not sure which one of the many predictions from so many sources will prove to be most accurate, however I’d bet I’m fairly close to #1.
Jacksonville Real Estate Agent – Jacksonville Homes
Short Sales are about to finally speed up! The Treasury department is putting big pressure on mortgage companies to speed up the short sale process. The MAJOR change:
- Answers within 10 days from the bank when a Short Sale offer is submitted
The Short Sale changes can be found here.
This change can’t happen soon enough! However, the time line actually starts April 1oth, 2010. Lenders can go ahead and start complying sooner if they choose. They have financial incentives to approve these sales and get them off their books.
Short Sales have been a grueling process for just about everyone involved. Mostly due to the extremely long process it takes to get any information from the lender. This big change will finally force banks to make a decision one way or another.
A mortgage company has incentives to move the property through a short sale rather than a foreclosure. Other than the financial bonus from the government, the bank benefits in that the house is sold by a willing owner. A willing owner keeps the house up, keeps its curb appeal in good condition, and genuinely works to help get it sold. A foreclosed home is the opposite. The bank spends money through attorneys repossessing the home which is often left in ruin due to an unhappy and irritated homeowner vacating fast.
I anticipate the sales of short sales will start happening much quicker as Buyer Agents will be able to show potential buyers the property even if the buyers have a tight time frame to purchase, close, and occupy the home. This is good for Sellers and Buyers!
Short Sale Realtor in Jacksonville Florida – Jacksonville RE/MAX Agent
I get this question often:
How do I speed up a Short Sale in Jacksonville?
A short sale is a loooong and tedious process for the seller, the buyer, the agents, and the bank/s holding the mortgage. No matter what, it takes more time to close a short sale than a regular real estate transaction. Can you speed it up? Yes, absolutely. However, it requires knowledge on the front end.
Keys to speeding up a Short Sale:
- Work with Professionals: First and foremost, you must choose the right REALTOR to sell your home. Choose the wrong REALTOR from the beginning and you have pretty much sealed your fate. Questions to ask? How many years have you been doing short sales? Have you ever closed a short sale deal? Do you negotiate with the bank or do you have a team that does it or an attorney that does it? What % of your business is short sales? What % of your short sales are under contract? KEY POINT: Choose wisely on the front end and the rest will fall in to place. Check out Short Sale INFO for Sellers Here.
- Document submission: Your REALTOR team should be doing this for you, but if they aren’t: Don’t submit one document at a time to the bank. Get it all together at once. Get everything & leave nothing out. Submit it all to the bank and call them every day until they have confirmed that they received your documents. Bank of America often takes a week or more before they will confirm they have received the docs.
- Contract: ALL Short Sale contracts should be AS IS with NO repairs to be done by sellers. Can the buyers get a home inspection, yes – however they should get one PRE-CONTRACT.
- Contract Offer Price: The offer price should be the TRUE market value or close to it. Will the bank take a little less? Yes but not by much. If you are a buyer looking to “Steal” a property, honestly you will probably never get what you are looking for as those properties are not the properties that you would agree to live in. Submitting a very “Low Ball” offer to “see if the bank will take it” is a complete waste of time. If the house is in a war zone or in complete shambles, and I’m talking basically destroyed, you can get away with submitting a low ball offer, otherwise don’t waste the time writing up the contract. KEY POINT: Submit a realistic contract and offer price supported by recent comparable sales.
- Follow up: Call, call, call, call, and continue to call the bank. Squeaky wheel. Your agent should do this, your attorney should do this, and you the seller should do this. It only helps to keep the pressure on. Squeaky wheel them!
- Expectations: If you are a Seller, Buyer, Buyer’s Agent, Seller’s Agent, set the appropriate expectations. The expectation is that this is a contract, it all hinges on the bank’s approval and it will take 60+ days in most cases.
Jacksonville Short Sale – Ponte Vedra Short Sale – Jacksonville RE/MAX Real Estate Agent
I’ve had continued interest from waterfront home buyers looking for foreclosures and bank owned homes in Jacksonville and Ponte Vedra FL. There are several great deals out there on these homes, but you have to know where to look.
Searching for Waterfront Foreclosures?
Bank Owned Waterfront Homes: I did a quick search this morning and found 10 homes that are waterfront bank owned homes. These are homes that are classified as “navigable” waterfront. A list of 10 is not many, but they are sure to result in a good deal for the right buyers! A bank owned home is a home that has already gone through the foreclosure process and has ended up back in the banks hands. The banks don’t want these homes & they take legitimate offers from legitimate buyers.
What do I mean by legitimate? Once you have decided on the perfect home (owned by the bank), make a realistic offer that they will truly consider with binder money to show you are serious. The banks will not work with you if they sense you are “fishing”.
Short Sale Waterfront Homes: I also searched “Short Sale waterfront homes” in Jacksonville and Ponte Vedra, FL. Get ready for this: Over 70 homes in and around Jacksonville and Ponte Vedra are available for bank pricing. Again, great pricing on these homes for the right buyers who are willing to make a legitimate offer (see legitimate info above).
Traditionally, foreclosures and short sales have had the stigma of being trashed and abused. That stigma still exist and yes, it’s true, some short sales and foreclosures are trashed. However, in today’s real estate market many of these homes are in great condition as the economy has fallen hard on all types of people. What does this mean for you, the home buyer? A GREAT DEAL on a prime waterfront home.
If you are in the market for a waterfront home in Jacksonville or Ponte Vedra FL, contact me if you would like a list of these waterfront deals.
Check out our Buyer Services or Seller Services.
Need to sell and think you are underwater? Get information on doing a Short Sale here.
Jacksonville and Ponte Vedra Waterfront Homes and Properties
Say the word “Short Sale” around any group of real estate agents in Jacksonville, FL or any where else in the country, and you should just sit down and get ready for a lengthy debate.
Some agents absolutely despise working with short sales and simply won’t work with them as a seller’s agent or a buyer’s agent. A few real estate agents specialize in short sales regardless of their feelings towards the often difficult process. Home buyers and sellers are frustrated too. You can see some issues with short sales in Jacksonville that are discussed here. Also, a complete roundup of Short Sale information is here.
What’s the issue with Short Sales?
- Banks’ inefficiencies: The banks are a complete mess. Most have little to no processes set up for doing short sales. This is the root problem for most complaints.
- Paperwork mess: Unless the homeowner and real estate agent are very organized, the amount of paperwork required can be scary.
- Time: Short Sales have traditionally taken a long time to get an accepted contract from the bank. The original bank must do their own appraisals for the home, agree the offer is acceptable based on the current market value, agree the seller qualifies for relief of the debt, and at the end of the day - just agree to sell the home.
Enter the Feds to help SPEED up short sales:
With the economy lagging and the housing market being a core factor in the rebound, the feds have been trying to push buyers into one of the best buyer’s markets on record. Is it working? Yes.
One hiccup: Short Sales. With First time home buyers out in force, they are met with the looming end of November deadline to purchase and close on a home if they intend to receive the $8000 tax credit. Several reports estimate that half the buyers this year are first time buyers.
Take the number of 1st time buyers who are pushing to find a home, close on the home before December, and get the tax credit. Add the number of homes that are classified as “Distressed” that are on the market, and you find a very big train wreck. Mostly due to the lengthy short sale process.
The Feds have realized this bottle neck and now incentivize the lenders to help speed up short sales. Check out the article on Short Sale incentives here. They are actually paying them for completing a short sale. It’s odd to me that the banks don’t have some level of urgency to liquidate these properties sooner than later, but it hasn’t been happening thus far.
Will this government push work? I hope so! As a real estate agent who takes on many short sales in Jacksonville, FL, I think all the help we can get the better. I know the sellers will appreciate knowing the banks have accepted the contract and the buyer’s will be happy to know they’ve got their house.
Do you need a short sale agent in Jacksonville or Ponte Vedra FL? Contact Brad here.
Seller Services
Jacksonville Short Sales – Real Estate Agent
Need a Short Sale real estate agent in Jacksonville FL?
Why go through foreclosure if you can Short sale the home in Jacksonville? Wiki definition of short sale here. If you are underwater in Jacksonville, FL, here is the correct path to take if you have a hardship and need assistance:
- Loan Modification: Not easily done these days as you have to have the ability to make the payments. The current white house administration has been very open about their level of irritation towards the mortgage companies. In their opinion, these loan mods should be much easier to get than they actually are. If you can get one, great! This is choice #1.
- Short Sale: You must qualify, but this is option #2. The house is sold out on the open market for the going market value….which is typically much less than is owed. The lenders are much more open to taking a short sale in today’s market. The New York Times recently wrote an article on short sales. You need a real estate agent who does short sales in Jacksonville. I’m helping many home owners with short sales every day. Contact Brad for short sale assistance.
- Deed in lieu of foreclosure: Option #3, happens if you can’t get it sold through a short sale process. You work with the bank for them to take back the home by you deeding it to them. The banks have been reluctant to go through with this as they would rather take their medicine by short sale.
- Foreclosure: Your absolute last choice. If you start working with a short sale specialist soon enough, you should never get to this stage. The banks don’t want your home – they already have plenty.
Frequently asked Short Sale Question:
QUESTION: By far, the most frequently asked question, “When you help me do a short sale, how much does this cost me?”.
Answer: Zero out of your pocket for my services. There is a listing agreement to get the home on the market and a commission is paid once we find a buyer and close on the property. The commission is paid from the funds of the sale which reduces the amount the bank receives from the sale. You as the original owner, walk away with no money from the sale and no money out of pocket to pay any closing service or commissions.
Several short sale articles are below. If you find yourself facing foreclosure, consider the much better alternative of a short sale. It is a better option and much less hard on your credit score.
Complete Short Sale information roundup here
Seller Services
Short Sale Help in Jacksonville
Short Sale – Don’t Panic!
Do you qualify for a short sale?
Jacksonville short sale real estate agent – Jacksonville REMAX
