TODAY’S FEATURED PROPERTIES
Is a short sale a good thing for a seller? As a seller you should consider some facts before you jump as a Seller into a Sort Sale. As an experienced Realtor in the Avon Park, Sebring, and Lake Placid market, I see many disasters in the making with short sales. You can give me a call to see if a short sale is right for you. I do not handle the actual short sales because it is not my expertise. Nor am I a foreclosure consultant. But, I do know when a short sales may be the best option for you and I can point out red flags that I might see. If a short sale appears to be the best choice for your situations, I can refer you to an experienced Realtor to handle your short sale. Some agents may bill themselves as being an expert in short sales. This is not always case. The buzz word these days is Short Sale and many Realtors have jumped on the band wagon to present themselves as experts when they are not. For example, you would not or I would not get to the same doctor for a cold as we would for major surgery and you should not just pick any Realtor for a short sale without checking their track record with short sales and ask for references from past clients they have handled short sales for.
What is a short sale? This is when the homeowner places the home for sale and the lender agrees to take less for the mortgage than what is owed and releases the homeowner from the deficit. The homeowner owes more than what the house is worth. Suddenly, payments are more than the homeowner can afford. This could be caused by loss of a job, reduction in income, divorce or death of a spouse, or an unexpected increase in mortgage payment, taxes and insurance. The homeowner can no longer afford to live in the home. They decide to sell and realize in this slow market they cannot not sell their home for what they owe and they are facing foreclosure by the lender. This is when a Short Sale may take place.
What sellers do not realize is, a short sale may not be all that it is cracked up to be. You think the lender will let you sell the home for less than what is owed and release you from the difference. This may not be the case. Before you agree to do a short sale realize that the following may occur:
1. There may be tax ramifications from a short sale which include the money the lender is releasing you from may be taxable by the IRS.
2. The person or Realtor handling the short sale may be collecting a fee from the sale in addition to collecting a commission. Find out what this fee is.
3. When you put up a Short Sale rider on the for sale sign in your yard, this tells the world that the property has started the foreclosure process and the list price is less than what is owed.
4. Just because someone tells you they can do a short sale, it may not happen. All this person is attempting to do is negotiate with the lender to take less. They are gambling they can do this on your time. If the short sale happens, the Realtor makes money. If it does not happen, you go to foreclosure. In some cases, but not always the lender may approve the short sale and still require you to pay the difference in what is remaining which is called the deficiency.
5. There is no guarantee the person that list your house to do a short sale will be able to negotiate with the lender. If the lender refuses to honor the approved discounted price and closing, the property will go to foreclosure. The short sale is a way to try to avoid foreclosure. When you accept the offer made by a buyer, you have accepted a lesser amount than the actual mortgage(s). This is where the Realtor goes to work and has to convince the lender that it is in the lenders best interest to take less than what is owed.
6 If you are in a situation that you can no longer make payments, it is always advisable to consult an attorney and accountant to find out the ramifications the short sale may have on you.
7. If you have equity in your home but are unable to make your current payments you may be better off selling just a little over what you owe to cover your expenses. This will help promote a quick sale. In no circumstances should you sign your house over to anyone or put it in a TRUST without an attorney looking at this. If you do sign your home over to a trust this may mean that someone else will realize the equity in your home and will sell it for the profit. You have just GIVEN your home away when you sign it over to a trust. Know who the trustee is on the trust. Do they know the Realtor proposing to do the short sale? What is the relationship to the Realtor? Have an attorney look at any papers before you sign.
If you are considering a SHORT SALE in Highlands County, give Maureen Cool a call at 863 873-7243. She will talk to you about your situation, give you options to consider and try to help.
