REO or Short Sale?

Buyers today have many homes to choose from with the majority of the homes being offered for sale in our area either REO or short sale listings.  Determining which homes to preview and make offers on will depend on many factors.  Potential homebuyers will want to consider everything before making an offer.

With an REO listing you can reasonably expect a closing within 30-45 days, depending on your choice of financing and other contingencies. Often times there are multiple offers, and banks will select the highest and best.  It is usually not disclosed how high other offers on the home are, so for that reason you should always make the very best offer price you are willing to pay for the home.  In certain areas and situations REO houses will sell for higher than asking price.

With Sort Sale- bank approval may take from 1 to 4 months, depend on many different factors that you have no control over, with no guarantee that the bank will approve the short sale terms.  If you are limited by time you might wish to look at Foreclosed houses.

Talk to one of our agents to determine the best homes for you to be viewing.   We can help take your criteria and match it up with the very best homes for sale throughout the area.

We need to short sale our home; can we sell it to a family member?

It is a common practice for the lender to require the seller to sign an “arms length” affidavit as part of the short sale approval process. This arms length affidavit is intended to prevent the owner of the house from selling to a family member. It may also prevent the owner from selling to a business associate.

Why would the lender not want the owner to sell to a family member? The reason in part is because of the possibility of the owner and the family member creating a side deal whereby the owner may receive profit or some other benefit from the sale of the home. In order for the short sale transaction to happen, the lender must agree to accept less than the owner originally borrowed. The lender does not want the owner to “have their cake and eat it too”.

It is unfortunate that the underhanded dealings of a few impact everyone. I am sure there are cases when allowing a home to be sold to a family member would be of benefit to everyone involved, including the lender. The fear the lender has of mortgage fraud makes the likelihood of this happening nearly impossible in today’s market.

If you cannot modify your home loan then consider listing it as a short sale.

The Palm Beach Post is reporting that there have only been 8,405 permanent loan modifications in the State of Florida. Overwhelmed lenders and home owners failing to qualify are reasons given for the low number of permanent modifications. The government has offered incentives to lenders that encourage modification instead of foreclosure so please if you want to keep your home and are in a distressed situation, contact your lender immediately.

If you have been turned down for a home loan modification you do have other options that may help you avoid foreclosure. One such option is listing your home subject to a short sale. The short sale process involves negotiating with the lender to accept less that you owe on the house.

The short sale process can be time consuming. You will need to complete several documents that will then be sent to the lender for review along with an accepted contract from a qualified buyer.

If you are interested in learning more about the short sale process, give me a call. 407-204-0255.


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Sellers need to help with the short sale transaction

As a Certified Distressed Property Expert I can assist homeowners who need to sell their home even when they owe more that the home is worth. This is called a short sale and my office is a leader in successfully closing short sales throughout Central Florida.

Seller’s responsibility

If we are to have any success closing a short sale we do need the help of the home owner. That is where some of our biggest concerns rise and why we are not always able to complete the transaction. We appreciate those home owners who cooperate with us from start to finish. Unfortunately not all sellers are willing to do so.

Seller cooperation

Sellers of homes subject to a short sale are facing a situation that has probably been brought on because of a distressed situation, loss of employment, increase in mortgage payment they are unable to maintain, divorce, etc. Our goal is to help them eliminate this stress without having to have the home foreclosed on.

Seller cooperation is needed in many ways including:

• Sellers should provide us with accurate contact information, email, phone, cell phone and new address if applicable and then respond in a timely manner to our calls or emails.
• Sellers need to keep the property in good condition during the course of the listing contract.
• Sellers should keep utilities on or be willing to provide utilities for inspections, appraisals and walk-thru.
• Sellers need to provide all the necessary documents the lender is going to require in order to consider granting approval of the short sale.

As an agent it is frustrating to accept a listing subject to a short sale, market the listing, find a buyer and then have the seller drop off the fact of the earth or become unresponsive to requests need to close the transaction.

We are trying to help; we need your help too.

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Homeowners in Florida may qualify for a pre-foreclosure sale-short sale

A pre-foreclosure sale or short sale is when you sell you home for less than is owed with your lender's agreement to accept less than is owed on the property. This is an option many in Florida are choosing to take as their personal situation worsens. What are some of the guidelines to consider to determine if a pre-foreclosure short sale is the right course for you?

• You are facing a financial hardship that prevents you from paying your mortgage payment as agreed.
• You have been unable to work out a solution with your lender; loan modification, forbearance, repayment plan.
• Your home is no longer worth what you owe on it.

Before agreeing to short sale your home you should consult with a real estate agent, a tax accountant and an attorney to determine for yourself that a pre-foreclosure short sale is the correct course for you.

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How to do a short sale on a home

Are you facing a tough situation that is preventing you from paying your mortgage payment? Distressed homeowners may have an option called a short sale. A short sale occurs when a lender agrees to accept less than the owner owes on their mortgage so that the sale can take place. The best way to do a short sale on a home is by hiring a Certified Distressed Property Expert who understands the process and has experience successfully closing these types of transactions.

In order to do a short sale you will need to provide your lender with documentation that will be used by them to determine if your personal situation qualifies for them to accept less from you than is owed. This documentation will include:

• Mortgage information and statements for all mortgages on the home
• Personal accounts information including your checking and savings accounts
• Income documentation including recent pay stubs and tax returns
• Financial worksheets and a hardship letter written by you that explains why you are unable to make your mortgage payments and what prevents you from selling your home for the full amount owed.

Providing your lender this information is one of the first steps on how to do a short sale on a home. If you believe a short sale will help you or someone you know, call me to learn more about the process.

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Buying a short sale house

Buying a short sale house could end up with the buyer purchasing a fantastic home without having to spend over their budget. Owners having to sell their home with a short sale contingency will often price them to sale, which means at or slightly below market value.

Buying a short sale house


A buyer of a short sale home needs to understand the differences in processing the transaction.

• The time to close could be extremely long.
• The seller may not be able to make repairs to the home.
• The seller may have had power disconnected that would require the buyer to turn on utilities for their inspection.
• The lender may simply choose to ignore the deal completely and foreclose on the home.

With thousands of homes being offered for sale subject to a short sale, a home buyer would not want to ignore the possibilities of purchasing one of these homes. Patience and caution are suggested if you get involved with a short sale transaction. It would also be wise to use the services of a real estate agent qualified to navigate the short sale process successfully.

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The unemployment rate in Florida will create short sale situations for home owners

According to the Florida Agency for Workforce Innovation, the unemployment rate in Florida for September 2009 is 11.0 percent. The unemployment rate in Florida has and will continue to create short sale situations for those home owners who have lost their job.

Short Sale

A short sale is created when a home owner is caught up in a distressed situation that makes it impossible for them to make their monthly mortgage payments. When modification or refinancing is not an option, the home owner can choose to list their home for sale, subject to their lender agreeing to accept less than is owed. The loss of a job is a valid reason to approach a lender about short selling the home.

Why would a seller choose to short sale?

Faced with short selling or foreclosure, a home owner may decide on short selling with the future in mind. Eventually the seller will find new employment and may want to start to saving money with the goal of buying another home. A foreclosure on their credit report will increase the number of years it might take to find a lender to approve them for a loan as compared to a short sale.

Each situation is different and if you have recently lost your job and are falling behind on house payments, call your lender immediately. You may also want to speak with an attorney about your personal situation. If you decide your best course of action is selling subject to a short sale, then call me. As a Certified Distressed Property Expert, I can help you work through the short sale process.


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How do you compete with the other 6,000 plus home owners selling their home as a short sale?

A distressed situation has forced you to list your home contingent upon the bank agreeing to accept less than you owe. This type of listing transaction is referred to as a short sale. Short sales are a common occurrence throughout Central Florida including; Osceola, Seminole, Orange, and Volusia counties.

Your situation is not unique. Short sale listings make up a large portion of the active real estate inventory. So how do you compete with over 6,000 plus home owners selling their home as a short sale? That's right, right now in the 4 counties mentioned there are over 6,000 homes listed for sale subject to the lender accepting a short payoff.

How do you make sure your home attracts buyers and receives an offer? You accomplish this the same way it has always been accomplished. The process to market and secure a buyer for your home remains unchanged even though it is a short sale.

• Proper Pricing. A home priced correctly will always attract the attention of buyers qualified in that price range. One of the first steps should be to research sales in the area in order to determine a price that is not to high or to low. Listing the home at real market value will result in offers.
• Market the home correctly. What makes your home standout from the competition besides the price and the fact that it is being sold as a short sale? Don't let yourself be short changed by the marketing efforts of the agent you hire. MLS comments are require to notify all that the home is subject to a short sale but even with the proper disclosure verbiage, there is plenty of room to describe features and amenities that buyers will find desirable. You should expect to receive full marketing efforts from the company you hire.
• Choose and experienced agent. It is important to make sure the agent you hire has short sale experience. When I say experience I am talking about not just in listing short sales but in getting them to the closing table. Ask if the agent has any formal training. Do they have the CDPE designation? Certified Distressed Property designated agents understand the process from beginning to end and are more than capable of helping you out of your situation by selling your home.

I understand you are under a tremendous amount of stress right now. You can reduce some of your stress by listing, receiving offers, negotiating with your lender and closing the sale with an agent who knows how to compete and win against the competition.

House worth less than mortgage?

Are you caught in a situation where you owe more on your mortgage than your house is worth? Have you recently lost a job, been ill or faced some other hardship that now has you behind or about to fall behind on mortgage payments? Don't give up, there may be help available for you.

Call your lender immediately. It may be possible for you to make arrangements to catch up on missed house payments or even modify your existing mortgage reducing your monthly obligation.

Speak to a HUD approved housing counselor. The Government have programs in place designed to assist home owners facing foreclosure.

Talk to a short sale expert. As a Certified Distressed Property Expert, I can walk you through the process of selling your home for less than owed on the mortgage with your lender's approval.

Call me for a confidential discussion about your personal situation.

Greg Staker
407-304-0255
Watson Realty Corp.

How long does the short sale process take?

The time it takes to close a short sale transaction is dependent on the parties involved in the transaction. The buyer, the seller and the real estate agent all play an important role in the short sale process. Once the buyer, seller and agents involved have performed their contractual obligations and submitted all of the necessary paperwork to the lender, the lender now has control of the length of time it will take for the seller to receive either an approval or denial. This time required will vary with lenders and each individual transaction.

The Florida Association of REALTORS created a short sale addendum to the purchase and sales contract that a buyer and seller can use to negotiate time limits for acceptance and additional time periods. The addendum allows for the buyer and seller to agree in writing to the length of time the seller’s lender has to approve the purchase price and contract terms. The default time allowed is 45 days from the effective date of the contract.

Of course the time periods agreed upon cannot be guaranteed and are subject to a third party who is not part of the contract and who could simply choose to ignore the contract.

You can avoid unnecessary delays by working with a professional real estate agent who understands the short sale process and knows how to market your home for the best price in the shortest time period. If you need to sale your home and are curious to learn more about the short sale process, contact me today.


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How does buying a short sale impact a home buyer?

How does buying a short sale impact a home buyer?

If you are a buyer buying a home that is subject to a short sale contingency, the impact will vary depending on yours and the homes situation. Each case will be different and you should consult with an attorney and use the services of a real estate professional who is skilled in handling short sales.

Positive impact

One of the positive impacts of buying a short sale is that often times the home will be competitively priced. Short sale sellers are not typically pricing their homes unrealistically. When the seller's lender approves the short sale price, the buyers will be satisfied in most cases that they have paid a fair market price for the home.

Negative Impact

One negative impact of buying a short sale is the amount of time it takes to complete the process. With some short sale transactions the process is never completed causing the buyer to lose valuable time. Once again each short sale situation can be different. Lenders may not respond to a seller's request for approval of a contract for several months or could decline approval after months of waiting.

Short sale inventory is going to make up a significant portion of the Central Florida real estate market for some time to come. If you are in the market to purchase a home and want to know how it will impact you specifically, contact me for a professional consultation.


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List of short sales

The market has a good supply of homes listed for sale with the short sale contingency. The fact that these homes can often be purchased at competitive prices make them very attractive to first time home buyers and investors. It is because of this demand, I have decided to offer a list of short sales to qualified buyers who contact me. You will need to let me know the area and the price range that you are interested in and I will email you the latest listings.

Orange, Osceola, Polk, Lake, Volusia and Seminole

The market area I cover includes short sales listed in Orange, Osceola, Volusia, Seminole, Lake and Polk counties. The number of available short sales vary by county, as of this post the counties mentioned above have the following inventory.

• Orange County - 3184 listings
• Osceola County - 1199 listings
• Volusia County - 664 listings
• Polk County - 1039 listings
• Lake County - 617 listings
• Seminole County - 933 listings

These numbers are subject to change daily and are based on information from MFRMLS for the period September 6, 2009.

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Is there a difference in how they impact your credit scores? In qualifying to buy a home in the future is one better than the other to have on your record? Do you know what a short sale is? You should check on the difference between a short sale and a foreclosure while you still have time. Contact me.


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Is it possible to get a short sale approval in an hour?

The buzz on working with short sales is that it seems to take forever to receive lender’s approval for the short sale when a contract is submitted. The process can take weeks or months with agents, sellers and buyers at the mercy of the lender.

Today an agent stepped into my office excited and amazed. She submitted a contract that was subject to a short sale to the lender and in ONE HOUR she received written approval. One hour!

I plan to get more details in the days ahead. Right now I would attribute the quick reply in part to this agent and her partners understanding of the short sale process and would imagine this understanding helped speed up the process. If you have a short sale situation and want to work with real estate professionals who understand how to get the transaction to the closing table, contact me.

Maybe MLS rules are made to be broken?

The MLS has rules and regulations that pertain to the listing information entered by the membership. Now that bank owned and short sale transactions make up the biggest percentage of the business being conducted throughout much of the area, these rules in my opinion are often ignored by agents who are either unaware, or are trying to game the system or just flat out do not agree with a particular rule or regulation.

For example I found in the public comments section of a listing recently comments from the agent that there are multiple offers and that the bank says no more are needed. This advisory was part of a listing that is clearly marked as being a short sale and is still showing as active or available for sale. Forget for the moment that the seller should be the one who decides if any other offers are necessary, this comment is opposite of what the rules state.

If there are to be no more offers submitted then this property either must be marked as pending or removed from the MLS. The rule that addresses this is Article 6: Refusal to Sell which states;

If the seller of any listed property filed with MFRMLS refuses to accept a written offer satisfying the
terms and conditions stated in the listing, such fact should be transmitted
immediately to MFRMLS and to all Participants by withdrawing the listing.

(bolding mine)

The bottom line in order to provide the best customer service to buyers and sellers, real estate agents need to be unison in how we regulate the information. If the property is still available then every buyer should have the right to make an offer. It is why we have the rule.


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Homes being sold subject to a short sale contingency require lender approval

Homes being sold subject to a short sale contingency require the seller's lender approval. The FAR Short Sale Addendum to Purchase and Sale Contract, which should be a part of every short sale transaction states that the contract contingency includes the lender approving the purchase price and contract terms.

Contact me if you need assistance buying or selling a home subject to a short sale contingency.


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I have accepted an offer on my home subject to the bank approving a short sale. Does my agent have to list my home as pending?

Q: I have accepted an offer on my home subject to the bank approving a short sale. Does my agent have to list my home as pending?

Yes. Once there is a signed, sealed and delivered contract executed between buyer and seller, MFRMLS rules clearly indicate the status of the home's listing must be changed to "pending".

The MLS rules and regulations addresses this issue by stating:

"Contracts which are subject to approval by a court, lender or other third party must be reported as "pending" consistent with Article 4 Section 15 of these Rules."

If you are interested in buying a home subject to short sale or have a home you are wishing to sell subject to a short sale, contact me to discuss the short sale process.


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Can a buyer using FHA financing make an offer on a short sale or foreclosure?

Can a buyer using FHA financing make an offer on a short sale or foreclosure?

Yes, a buyer who is obtaining FHA financing can make offers on short sales or foreclosure property.

The problems the buyer might encounter could revolve around the FHA minimum required property standards. Minimum required property standards may result in items needing to be repaired or replaced in the home before the buyer will receive full loan approval. The short sale seller or REO lender may not be able or willing to make these repairs.

Make sure your buyer is aware that short sale and REO homes are often listed for sale in as is condition which could prevent the buyer from obtaining financing.

Contact me to discuss your real estate financing questions or use my new home search feature to find the right house for you.


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What is the effective date of a short sale contract?

What is the effective date of a short sale contract?

The effective date of a short sale contract is the same as it would be if there were no short sale contingency. When the buyer and seller have signed and delivered back to each other the contract and addendum to the contract, this makes the contract effective. The buyers and sellers have now entered into a binding contract for the selling and purchasing of the home.

The short sale contingency is just that, a contingency that must be met in order for the transaction to close. Much like a financing contingency for a buyer would act in a contract.

If you need assistance or help in understanding your short sale transaction I would encourage you to seek legal advice. If you would like help selling or buying a home subject to a short sale, contact me today.


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- Greg Staker 407-304-0255