February 12, 2019

Will you qualify for a short sale?

approval stamp

There are many reasons for having to short sell. There are some obvious hardships that are quite simple to prove. And then there are others that result in approved short sales, even if they don’t initially sound much like “hardships” at all.

Let start with the most common hardships that are easily approved and widely accepted by lenders:
  • Facing foreclosure
  • Unemployment/underemployment
  • Employment or military based re-location
  • Divorce or separation
  • Death of a co-borrower/household wage earner
  • Unaffordable mortgage
  • Increase in expenses
  • Decrease in income
  • Business failure
  • Natural disaster impacting property or employment
  • Medical issues
However there are many other reasons to short sell that do translate in to qualifying hardships if presented in the right fashion. I have personally seen short sales approved for many reasons such as:
  • Homeowner left place of employment to go back to school
  • Voluntary employment change 
  • Homeowner left town to care for an ailing relative in another state
  • Since buying the home, homeowners had children causing the home to be too small for their needs
  • Since buying the home, homeowners found out they were infertile and could not have children, leaving them with a home too large for their needs
  • Homeowners found their commute too long and wanted to relocate to be closer to job
  • Clients had bought a new home and failed to sell the old at a price to satisfy mortgage debt
  • Investor owners ended up with tenants gone wrong

There is a lot of misinformation out there on the web regarding what is and is not an acceptable hardship. I have seen many unlikely-to-be-approved short sales actually get approved. There are a lot of variables to every short sale and no cut and dry rules for any. Before assuming your “hardship” doesn’t qualify, talk to me!

February 10, 2019

How to sell Florida real estate with federal tax liens

picture of calculator and irs document

Need to sell your Florida home but have a federal tax lien? The most notorious creditor of them all – IRS – has several ways to collect unpaid taxes, one of them by placing a tax lien on your real estate. A tax lien will make it more difficult to sell your property, especially if you owe more than your home is worth and can’t get the feds paid in full at resale, but there is always a way! 

What is a federal tax lien?

A federal tax lien is the government's legal claim against your property when you fail to pay your federal income taxes. The lien protects the government's interest in all your property including real estate. However, when you need to sell, this lien ties up the equity in the home and must be addressed.

There may or may not be enough proceeds from a home sale to pay off the IRS lien at resale.

If there is enough equity; prior to close you will need a current payoff statement from the IRS, and at close funds from the home sale will go to pay off the IRS, and they will simply issue a lien release clearing the property of their claim against it.

But what if a home sale will not pay off the IRS in full?

Then things get a little trickier, but there is still a solution. The IRS will in fact consider a partial payment in exchange for a lien discharge, when proven it is necessary to facilitate a sale. There is a process and some paperwork involved in this case. 

Keep in mind, this is not the same as settling your IRS debt. IRS has their own process for that and does not settle tax debt through property sales. They do however accept the partial payment to release the lien from the property so it can convey to the new owner. You will still owe the remaining excess IRS debt, but it will be cleared from the home you wish to sell.

You will want to make sure the professionals handling your property sale are well versed in dealing with federal tax lien issues. You will also want to get started far enough in advance of closing that there’s ample time to complete the process after contract but prior to close. IRS was never known for their speed or efficiency.

But what if there’s no equity at all?

If you owe more on your mortgage(s) than your home could sell for, AND have a federal tax lien in addition to that, then things get even trickier. In this case you are looking at a short sale to deal with your mortgages, and with likely little or nothing left for the IRS, you will need for them to discharge their lien…for nothing.

piiciture of home floating in water

This too can be done!  

Seeing as now you have multiple lien holders involved and several complex issues to sort out, you need some seriously expert help with this transaction and awesome timing to get this all done properly (PSSST….THAT’S WHAT WE DO!!!). Upon having the short sale approvals and the IRS lien discharge – you move forward to close as in any other sale. In a short sale your mortgage debt is generally always forgiven, but the IRS just releases their lien on the home, so you will still have to deal with the IRS at some later point.

Minna is the consummate professional. She delivered on every single item she said she would during our first conversation. Not only did she exceed expectations, she did it with a genuine concern for my situation. At every step of the process, her input and guidance was instrumental in helping to make my home an attractive property for buyers. She understands the market and uses that knowledge to her clients advantage. Selecting Minna was one of the best business decisions I ever made.

Tom

February 5, 2019

Northeast Florida Home Sale Prices Just Keep Heading Up!

Northeast Florida home sales prices rose another 8% over in 2018, in a seemingly endless race to a new market peak!

Average residential home sales prices have risen 6-8% yearly for the last 5 years in a row, totaling an almost 40% increase total. The average sales price in the greater Jacksonville area has risen from $195,390 in 2013 to $270,365 in 2018:

graph of northeast florida real estate prices

While sellers would surely appreciate another year of skyrocketing prices and quick sales, buyers are increasingly frustrated over rising prices and limited inventory.

What's headed our way for 2019? January is always a slower month of the year so it's simply too early to say what is on route the rest of the year just yet!

January 31, 2019

A guide to understanding deficiency judgments in Florida and how to avoid one.

Did you know that if your Florida home forecloses, the lender can still pursue you for their losses with a deficiency judgement? 

What is a deficiency judgement?

If you owed $300,000 on your Florida mortgage, and it foreclosed and sold for $250,000…the missing $50,000 would be the deficiency. Florida laws allow the lender to sue you for their $50,000 loss, be granted a judgement and then collect.  

If you are facing foreclosure in Florida, your best bet to avoid a deficiency judgment is with a short sale.

In a  short sale, you (with your short sale agents assistance) will have the opportunity to negotiate how the loan is settled and to get this deficiency balance forgiven.

The short sale approval letter must specifically spell out that the lender is waiving their right to try collect the deficiency. When the approval is reached, if the terms are not to your approval, you will have the ability to renegotiate these terms. As your short sale agent, I always seek to have the short sale approved at terms most beneficial to you - which would be to settle the account in full and have the balance forgiven.


Is this ALWAYS possible? No - not always. There are some very rare situations in which the lender(s) will not waive their right to pursue a deficiency and then it will be your decision whether to go through with the short sale or not.

A short sale is not a perfect solution 100% of the time, but it is almost always the most beneficial one. A short sale negotiated by an experienced agent is your best chance of settling your mortgage debt on your terms, preventing a foreclosure and having the deficiency balance forgiven.

I can't recommend Minna enough for a short sale! She eased my mind during the entire process and followed through 100% from day 1 to the closing. She and Jaime handled everything flawlessly. I am so grateful to Minna and Jaime for all that they did to help us through this process.

Casey

January 23, 2019

Should I modify my mortgage?

A lot of my short sale clients have either considered a mortgage modification or been turned down for one by the time they have made the decision to move forward with a short sale.

WHAT IS A LOAN MODIFICATION?

In a mortgage modification the lender makes permanent changes to the terms of your home loan resulting in a more affordable payment. Keep in mind that while a modification will reduce your payment, it will not reduce the amount you owe on the property. In fact, in many instances the amount you owe on the loan will actually increase the amount or length of your loan.

This is the main reason most mortgage modifications ultimately fail. Loan modifications are not a long term solution for anyone who owes more on their home than their home could sell for (owners with negative equity).

piiciture of home floating in water

IS A LOAN MODIFICATION RIGHT FOR YOU?

A loan modification may be a good solution for those who:

  • Can not afford the current mortgage payments
  • Wish to avoid foreclosure
  • Have a stable financial situation (including steady employment) to support the new payment amount indefinitely
  • Do not have significant negative equity in the home, or are prepared stay in the home for many more years to overcome a heavy negative equity situation

If you owe much more than your home could presently sell for (or will after a modification), and believe there is a possibility you may want to move within a few years time, a loan modification is not likely to be a good long term solution for you.

A better alternative in this case is almost always a short sale

I want to thank you again for taking care of everything, I received stacks of letters from the two mortgage companies with threats and pleads for me to contact them and I ignored it and left everything in your worthy hands. The other realtor at the closing said that he was worried because usually short sales don't work out, and that this is his first successful one. I told him that I found you on google and I was told that you are the best in the state for short sales, and that you proved that to be true. A huge burden has definitely been lifted and all of the credit goes to you. Thanks again!

D.B.

January 10, 2019

Why your Florida short sale didn’t close and how to get back on track!

short sale didnt close

Did you know that less than half of all listed short sales actually close? Sad, isn’t it? Seeing as most short sellers are highly motivated to sell, it is rarely the sellers choice simply to “take the home off market”….so somehow more than half of all short sales fail to sell at all and simply expire, or fail to get approved and to closing.

rejected stamp

Our short sale approval rate is near 100%….and our short sales close, so why is the average so low? Here are the most likely reasons why, and what you can do about it:

  • ​​​​The home was overpriced and a buyer was never secured: Price and condition are the two reasons homes do not sell. A price correction addresses both. There is simply no good reason not to reduce the price of a short sale that is not attracting buyers.
  • A buyer was secured but the short sale was mishandled in some way, never reaching approval stage: This is common also. Maybe paperwork was never completed properly, or maybe there was not enough follow up. Perhaps the short selling lenders valuation came in higher than market value and the parties involved did not know how to handle the situation. Maybe proper expectations were not set up front and the seller failed to qualify for the short sale.  Maybe a pending foreclosure date was not addressed and the clock ran out. There are many ways to bungle a short sale, but almost all are ultimately preventable or remediable with the right help.
  • Terms of a lender short sale approval letter were not acceptable to the seller: Sometimes short selling lenders ask for crazy things that the sellers can’t agree to. This also happens, but more often than not is also resolvable, if you know how to ask.
  • Listing agent and/or attorney did not truly understand the short sale process: This is generally the #1 reason short sales fail and all the above reasons can usually be attributed to this. When the person in charge of getting the short sale approved doesn’t have enough knowledge or experience with the short sale process – things rarely end well for the seller. Short sales are complicated and require a professional with plenty of experience.

So things didn’t go as planned and your short sale expired…so now what? Well the good news is…most of the time you can simply try again. Sometimes it takes a try or two (or three!) but with the right help, almost any short sale can be successful!

January 8, 2019

Who pays Realtor fees in a short sale?

home sale

How can upside down sellers afford a Realtor if there's no money in the home to pay for one?

Find out how to sell your over mortgaged Florida home in a short sale without paying a penny out of pocket in Realtor commissions or other closing costs...

Realtor commissions in short sales

In almost all Florida real estate sales the seller pays for all customary closing costs out of the proceeds of the sale. In a short sale, where there are no proceeds for the seller, these same costs are still due but things work just a bit differently. 

In a short sale, the seller’s lender will allow these same customary closing costs to be paid out of the proceeds of the sale, including:

  • Realtor commissions
  • Conveyance taxes
  • Adjusted real estate taxes
  • Legal fees
  • Seller paid concessions to the buyer
  • Junior lien payoffs
  • Seller relocation assistance
  • Recording, wire, courier fees etc.
CASH
The lender accepts the remainder of the funds as short payoff for the loan balance. 
FOR EXAMPLE: Let’s say the home sells for $200,000. In a short sale, the lender doesn’t get $200,000. The lender gets $200,000 minus all the costs of sale, including REALTOR® commissions, attorney’s fees, recording fees, back taxes, conveyance taxes, payoffs to junior lien holders, seller concessions to the buyer, etc. So, at the end of the day the lender agrees to accept a net of, say, $182,000 (remember, this is an example only) after these costs.

Isn’t that beautiful? That means short sellers get to avoid foreclosure, sell their homes on the open market, be forgiven of massive mortgage debt, and nearly 100% of the time it never costs a single cent out of pocket!

I can't recommend Minna enough for a short sale! She eased my mind during the entire process and followed through 100% from day 1 to the closing. She and Jaime handled everything flawlessly. I am so grateful to Minna and Jaime for all that they did to help us through this process.

Casey

January 7, 2019

6 WAYS TO STOP YOUR FLORIDA FORECLOSURE TODAY!

foreclosure sign

Facing a looming foreclosure can be a terrifying prospect, but you have options! 

Knowing your options and taking action quickly  is the key to resolving this situation and moving on gracefully past this difficult time. In the past decade, we have hundreds of our clients avoid foreclosure . For a free consultation contact us anytime, and read  on for a summary of all your options when facing Florida foreclosure:

REINSTATE YOUR MORTGAGE

After a few missed payments your lender will no longer accept a single monthly payment, but you have up until the foreclosure law day to bring the loan current. Partial payments won’t be accepted, but you have the option to bring the loan current by paying all the back payments, late fees and legal fees in one lump sum. 

stack of cash
LOAN MODIFICATION OR FORBEARANCE

A loan modification is a permanent change to your mortgage that may lower your payments and the delinquent payments may be added to the mortgage balance. You may or may not qualify for a loan modification and the process can be difficult and time consuming, but it is an option if you want to stay in the house. In a forbearance the lender agrees to reduce or suspend mortgage payments for a certain period of time, after which you resume making your normal monthly payments along with an additional amount to catch up. 

REFINANCE

Keep in mind it is almost impossible to arrange new financing when you’re already in default on your existing mortgage. Refinancing will depend on your income, credit report, value of your home and the amount of your mortgage. If you’re not sure of the value of your home, contact me. I will be happy to help and I can usually give you a pretty good estimate right away with just some basic information.

BANKRUPTCY
bankruptcy court

If your financial situation has improved or will shortly, filing bankruptcy will halt your foreclosure proceedings temporarily. Unfortunately, a few months later you would be back to square one. You may also want to note that filing bankruptcy does not change ownership of the home and it will still belong to you. The lender would still have to foreclose to take back title to the home, leaving you with not just a bankruptcy but also a foreclosure.

SELL YOUR HOME

If you have recently been served with a foreclosure lawsuit you still have enough time to sell your home.  We can help you sell your home quickly and if you have no equity, we can negotiate a short sale for you. A short sale allows you to sell your home for less than you owe and have your remaining mortgage debt forgiven.

Some of our clients even receive relocation assistance from their lenders. Furthermore, all the seller associated costs of the short sale are generally paid out of the proceeds by your lender, making this option FREE to you.

DEED IN LIEU OF FORECLOSURE

A deed in lieu of foreclosure is basically a voluntary foreclosure. You would have to apply and be approved by your lender for this option and a deed in lieu is not generally available if you have more than one loan on your property. As lenders prefer other workout options, even if you do qualify for a deed in lieu, the lender may first require that you attempt to modify the loan or sell the home. 

LET YOUR HOME FORECLOSE

By far, your worst option! Many folks feel they should just walk away, but foreclosure has very serious consequences.  Foreclosure can easily take a year or longer, and Florida is a recourse state. That means your debt doesn’t just disappear with the home. A lender that suffers losses in a foreclosure has the right to file a deficiency judgment against you and pursue you for the remaining debt. A foreclosure is just the beginning of a new and larger set of problems.

Minna came into my life at a time I didn't know where to turn, I was out of work and running out of time. Realtors were willing to come and put my house on the market and tell me we will see if we can sell it. Minna came to me and told me she knew how to sell it, she knew the system and she would do her very best to see that I didn't lose everything including my credit...She spent months working on selling the house and I have had minimal consequences to my credit. I don't know what I would have done without Minna. Minna, thanks again, you made a terrible situation bearable.

B.C.

Short Seller

January 7, 2019

How long will my Florida short sale take to close?

house pic with timer

How long will the short sale process take? While all short sales are different, there are some general timelines I give folks when asked. I have had short sales approved in days, years and everything in between, but most Florida short sales will generally last 4-5 months and will usually fall into these some general time frames:

SHORT SALE TIMELINE

Property Marketing: 2-8 weeks

Before your lender will consider the short sale, the property will need to be marketed and a buyer secured. After our initial consultation, the home will go on market and I generally recommend price reductions every 2-3 weeks depending on property activity. The timeline to secure a buyer will have the most variation depending on market conditions and price, but currently my average listing goes under contract within the first month or so.

After a buyer is secured, the real work begins...

professionals shaking hands

Document Review: 1-4 weeks

Your lender will want you to qualify for the short sale, and will do a full financial review. We will provide a list of documentation and forms your lender will require as part of the approval process. It is best to have all this documentation ready up-front to prevent any delays. Most lenders will allow up to 30 days to review the documents and make a decision regarding your ability to qualify financially for the short sale.

Property Valuation: 1-3 weeks

After ALL your paperwork has been received and reviewed and you have been deemed qualified to move forward, your lender will want to get a current value on your home and will order either an appraisal or BPO (Broker’s Price Opinion) from a local real estate agent or appraiser. This valuation will be scheduled, performed and the results will be sent to the lender.

Short Sale Negotiations and Investor Approval: 2-4 weeks

Once this value has been received by the lender, the purchase contract will be weighed against it. The lender will accept, reject or counter the contract.  Your lender will determine their “acceptable” fees and timelines. These fees will very often need to be negotiated several times in order to get the net proceeds of the sale to an acceptable level. The terms of the approval letter will be dissected and sometimes renegotiated. Once acceptable terms for all parties have been reached, the investor on your loan will also need to sign off on the approval.

approval stamp

Short Sale Approval to Closing: 4-6 weeks

Once an approval has been successfully negotiated, a short sale approval letter will be issued spelling out the terms of the sale, and your sale will move forward like any other. The buyer will generally need to wrap up their loan, and a closing needs to be scheduled. There will always be a limited time frame to close specified in the short sale approval letter so all parties will want to be prepared to move as quickly as possible to close.

POSSIBLE EXCEPTIONS THAT CAUSE DELAYS:

Multiple Liens: 1-4 weeks per lien

If there are junior lien holders ( second mortgages, other liens), all liens will have to be negotiated and all lien holders will have to be in agreement with each other in order to get the sale to happen. This requires extra time.

Lost Buyer: 2-4 weeks

Unfortunately buyers do not always perform as expected. If a buyer is lost through the process, a new buyer will have to be found. This will also require additional time, but is not necessarily an entire new approval as seller documentation will have already been processed and the valuation will have been performed.

Inaccurate BPO or Appraisal: 2-12 weeks

Once in awhile a BPO/appraisal does not go as expected and needs to be disputed. This can take as little as 2 weeks, or some lenders will require the old BPO to expire, before considering a new one. Most BPO’s expire in 3 months.

Declined short sale: 4-12 weeks 

Sometimes lenders unexpectedly decline short sales. Usually the issue is one that is able to be overcome, however this generally requires an entire new short sale approval from the very beginning.

The key to having a smooth and speedy short sale is to take action early, and hire the right help. Minna Reid has been specializing in short sales since 2010.

This past summer we had to do something we never expected and that was to short sale our home of 15 years. Minna answered our phone call and immediately assured us we were not alone in this and she would be there every step of the way. At no time did she ever make us feel less then she assured us  this was more common then we knew and she would do everything to get us a sale before the inevitable foreclosure due to loss of income. She and her staff were amazing once we vacated and moved 700 miles away she was able to locate a buyer in just over 3 months and hold the closing with 4 months of the listing date. They were there every time we had a question or to explain the next step. She and her staff are amazing and I would recommend them to anyone looking for a realtor. Words cannot express our gratitude.

Elizabeth

December 5, 2018

A quick guide to the Florida short sale process

realtor with short sale sign

Short sales are a possible solution if you owe more on your mortgage than your home is worth, need to sell, and lack the funds to make up the shortfall. 

No two short sales are exactly the same as they all vary by lender, investor and the seller’s situation, but most short sales generally follows the same basic process:

Seller Consultation: 

This is the first and most important part of the short sale. To determine whether a seller will qualify for a short sale I gather basic information such as:

  • Sellers goals and circumstances
  • Sellers financial situation
  • Lender(s) involved
  • Other liens, if any
  • Based on this initial information, we can determine whether a short sale is a viable option. If so, an appointment will be set to view the home to determine it’s value, and cover the process in more detail.

    Property Listing and Marketing:

    After setting the proper expectations and prepping the home for market, the home is listed for sale on the open market like any o​ther home.

    The property will be priced to market value, photographed and advertised, and buyers will come to view the property. The only difference so far is that buyers will need to be aware that a sale of said property will be subject to short sale approval which may take a few months.

    Securing a Buyer: 

    34423231 - estate agent shaking hands with his customer after contract signature

    Once agreement has been reached with a buyer, the property goes under contract and short sale negotiations with the lender begin. The bank holding the mortgage must agree to take a loss so that the owner can "sell short".

    Short Sale Negotiations:

    During this short sale approval process several things need to happen successfully. To (greatly) summarize:

    • We fully document the sellers situation to make a case for a "financial hardship"
    • The lender orders a valuation of the property to establish its current market value.
    • The lender(s) will decide to approve, decline, or counter the sale based on the results of the above, which generally leads to more negotiations over the terms of the approval.

    Approval and Closing: 

    Once all terms of approval have been negotiated to satisfaction, the lender(s) issue a detailed approval letter.

    Short sale approval letters generally expire in 30-45 days from the date of issuance, so at this point in time all parties should be prepared to close swiftly.

    approval stamp

    This is meant to serve as a guide only, as a full detail of all the variables involved in a short sale cannot be addressed by this post alone. It is absolutely critical that the party handling the short sale with the lender is highly experienced in the process.

    We have specialized in short sales since 2008 and have a 95%+ approval rate!

    We found Minna by doing an online search for short sale experienced realtors in the area. We had already moved to GA and could not sell our home. Minna and Jamie, her assistant, were very knowledgeable about the whole short sale process and made the transaction go as smoothly as could be. They  literally took care of everything for us!

    D.H.