Information on Short Sales and Foreclosures
in Saint Petersburg Tampabay Florida for sellers and homeowners.
Everybody talks about a Short Sale here in Saint Petersburg Tampabay, but most homeowners do not know what it is. No wonder, I as a Realtor can not remember a time when we had to deal with short sales, foreclosure or fire sales.
So, let´s start at the beginning. A lot of home owners in today´s economy can not make their mortgage payments anymore. Short sales and foreclosure in Saint Peterburg Tampabay are still going up.
There is a ton of reasons such as high gas prices, higher cost of living, higher taxes, higher insurance premiums, changing interest rates, balloon loans, maybe the homeowner lost his or her job, they got ill, maybe it was an investment property and the renter stopped paying rent and on goes the list.
There are a lot of people blaming the homeowners, I can only tell you one thing, of all the sellers and homeowners that I know they can not make their mortgage payments anymore and are now facing a Short Sale situation, nobody is doing it on purpose.
Everybody is struggling to make the payments but there is a time when you just can´t do it anymore.
That´s when you look at your financial situation and have to make the tough decision to sell your house or condo.
Now you call your Realtor or you search the internet and try to find your home value. That´s when it gets really bad.
Real estate allover the county has lost a lot of value over the last few years. Sometime 40% or 50% here in Florida Saint Petersburg, Tampabay, we are pretty much back to 2002 or 2003 prices.
So let´s say you bought your home for $200,000 and had an 80% - $160,000 financing and a year later (property values were going up and up) you got another $50,000 equity line from the bank to do some repairs and remodeling. Now you owe the bank a total of $210,000. Looking at the comparable sales in your neighborhood over the last few months, it is crystal clear that nobody is going to pay more than $150,000 for your property.
Well, now you are looking at $60,000 that you are short to the bank and maybe another $10,000 or $15,000 in closing coast. Lucky you if you have these $70 or $75,000 under your pillow or can take it out of the stock market and bring it to closing.
But for most people the reality is a little different and it is called Short Sale or foreclosure.
As a homeowner that is faced with these two choices, your brain is kind of blocked for some time, yes, you know this is the logical option that you have, but we human beings sometimes just do not want to face the harsh reality.
We tend to stick our heads in the sand and think it somehow might blow over. . . Unfortunately it never does.
Eventually we have to face the situation and trust me, the sooner the better.
Sometimes, you have given it your best but there are circumstances that you can not control and you can´t do anything about.
So, instead of going to bed every night worrying what is going to happen and how you will go on, make a decision, face the problem and get it done and over with.
The sooner this chapter in your life is closed the sooner you can start over and have a new beginning.
Ok, now that we have made the decision, the first thing we do is call the bank, it might be a bit aggravating to get to the right person but the first rule in a short sale situation is "do not get frustrated" Once you have reached someone, ask them if you qualify for a loan modification.
If you don't qualify, tell them your situation and let them know that you can´t make your mortgage payments anymore and that you have to sell the property and it looks like a short sale.
The bank will not say YES or No but they will tell you to get a Realtor and list the property.
It would be wonderful if you could hire a Real Estate agent to take care of the listing and a lawyer to do all the paperwork etc. Most likely, if you can not make your mortgage payment, you will not have the money to pay a lawyer.
So, The Realtor it is.
I know, you are still stressed out about all this and don´t really want to deal with it, but it is important that you spend some time to find a Short Sale Realtor for you and your situation.
I think the best way to do so is Google the word short sale and Saint Petersburg (or what your area is) and when you find a few names, Google the Real Estate agents name.
Meet with him or her and get a feeling for them.
I believe in honesty and reality. So, I would choose someone that is not afraid to tell me what the Short Sale situation really looks like, what the short sale process is all about and how much I can expect to sell my home for.
It is better to get the shock right away instead of dragging it out and get the truth piece by piece. Find someone that tells you, Hey this is not going to be a walk in the park, but we can do this. Do not go for the agent that promises you the highest sales price or one that is so negative that it brings you down even more.
Use some common sense.
You want your Realtor to be straight forward, to understand your Short Sale situation and to be aggressive and positive.
Most important, choose a Realtor that works for you in a single agent relationship NOT as a Transaction broker. I can not stress this point enough. Ask them before you sign anything!!! Make sure you understand the difference.
Next step is signing a listing agreement and putting the house on the market.
Do not worry about the commission, in a short sale the bank will ultimately decide how much the Realtor gets and most likely it is different than in your listing agreement.
Anyway, I have to say one thing loud and clear
"In a Short Sale, Time is not on your site"
Every day that passes by cost you more. In four ways,
1. The maintenance, taxes, insurance, electric etc for the house has to be paid.
2. The unpaid loan amount gets higher and higher and higher every day.
3. The value of the home in today´s market is going down by the day,
4. Your life is on hold, every day that passes by is a lost day on your future.
So, I know it is difficult, but you have to get going on it.
The market in Saint Petersburg Tampabay is not getting any better anytime soon.
Back to the actual short sale process.
You have not made your mortgage payments,
you have contacted the bank,
you have found a Short Sale Realtor here in St. Pete
the house is listed.
Now four things happen at the same time.
You will get a "Notice of Default" NOD from the bank and you might get daily phone calls from them, yes, the bank you never heard from in the last 5 years is now calling you all the time, trying to collect their money.
Stay friendly, explain that your are already in touch with the bank and that the home is listed for sale.
In the meantime you have to fill out a "package." Your Realtor, or even better the Short Sale negotiator that your Realtor is working with, will get the Short Sale package for you.
The bank wants a ton of information and bank statements and pay stubs and and and.
Fill it out ASAP, do not procrastinate, remember time is not on your site!
Now you get an offer on your property and most likely you will get a heart attack,
it is lower than you ever thought in your wildest dreams.
Hopefully your Realtor prepared you for this situation.
You will be very upset and your first reaction is NO I am not giving the house away.
You will be offended and disappointed.
My best advice, Sleep on it, sit down with your Realtor the next day and talk it over. T
he buyer did not want to offend you, all they are looking for is a "great deal" and they are trying. They do not see the human dramas behind a Short Sale, they do not see all your emotions,
they just want to buy the house for a low price.
In their mind, it is a "Short Sale" and that translates to, the owner has to sell one way or another. Here in Saint Petersburg Tampa bay if a buyer has to deal with all the Short sale uncertainties, and hurdles and unknowns, they want to get the best deal
. In the end, the way I see it, you as the seller does not determine market value, nor does the Realtor or the buyer. It is up to the appraiser and the bank.
That brings us to the next step.
Once you have accepted and offer, it is forwarded to the bank and they will send out an appraiser, he is the one that tells the bank what the fair market value is.
The banks look at it and if the offer is anywhere in that range, they might accept it or counter it. By the way, when you accept an offer it does not mean that the home will be sold.
In a short sale situation you accept the offer contingent upon third party (the lender) approval. If the bank says NO, you can not sell.
So far so good, but let's not forget the "behind the curtain" and by that I mean the negotiation with the bank, will they forgive the balance owed or not.
Before anything is finalized, you want to know what is going on, will they let you off the hook or do you end up with a huge depth?
The most important part in the Short Sale process is the negotiation with the bank and trust me, I have yet to see a bank that is easy to work with.
So, stay in touch with Realtor realtor and negotiator negociator.
.
I know this is just a brief overview and you will have a ton of other questions and concerns.
Let me say this, here in Saint Petersburg every bank is different, and every short sale situation is different, nobody in this game, neither you nor the bank nor your Realtor really likes to deal with a short sale and wants to be in the situation, but we have no choice, we need to deal with it and get it done.
Like I said before, it is not a walk in the park, it can be very stressful, frustrating and emotional, but there is no way around and you will get trough it and in the end it will feel good to get this burden off your shoulders and start fresh.
I know we did not cover everything in this little write up, but you can call us anytime if you are faced with a Short Sale situation here in the Saint Petersburg Tampa bay, Pinellas County area.
There are a few misconceptions about a short sale situation, lets clear them up.
Do I have to move out of your home or condo immediately?
No, you do not have to move out of the house. It is better for you, the house and the bank if you stay till closing.
Will the bank forgive the difference between the loan amount and the sales price?
Maybe is the best answer I can give you. It all depends on the bank, your financial situation and the negotiation you do with the bank. They might forgive all of it, they might forgive part of it. Every short sale is different and handled differently.
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