SW Florida Real Estate - Short Sale F.A.Q.

What is a short sale?



A short sale describes a situation where the lender agrees to take less money than they are owed on a property at time of sale. There may be more than one lender with a lien on the property.





Who is the seller in a short sale?



The individual owner is still in title, they have not been foreclosed on. In some cases foreclosure is imminent. In other cases the seller may not be behind. In all cases the seller owes more to the bank than they are trying to sell it for.



How come some short sales are so much less than other homes on the market?



If a seller is in a "short sale" listing, there is no equity in the home and they are not going to make any money. Many short sales listings continue to lower their price in order to attract an offer. There is no guarantee that the bank will agree to the list price.



When does the bank get involved?


The bank does not get involved until there is a offer on the property. In some cases there have already been offers on the property that the bank turned down, in many cases they gave the seller and listing agent an indication of what price the offer would need to be for them to accept the short sale. The property will then be placed back on the market, sometimes at or around the price stated by the lender. If a new offer comes in the process starts from the beginning.


What is the short sale process?



The seller needs to provide the bank with :


Listing Agreement
Purchase Contract
Hud1 or Net Sheet
Hardship Letter
Financial Application
2 Current Pay Stubs (if self employed please provide Profit and Loss Statement)
2006 and 2007 Tax Returns w/ W-2’s
2 Current Complete Bank Statements (For All Accounts)
Authorization to speak with all third parties



It is basically a mortgage application in reverse. The seller needs to disclose all income and assets to prove why they can no longer afford to make the payments.



This application will be assigned to a "negotiator" who will process this paper work, order an appraisal of the property and determine if the price offered is close enough to the current appraised value and if the seller meets the hardship guidelines. In some cases they may have to send it to a board to review, to an outside investor and/or a mortgage insurance company.



How long does this process take?



This could take anywhere from 1 months to over 6 months depending on the lender.



Does the lender have to accept the offer?



No, and often times they do not. If the offer is close enough to the current market value and the seller meets the hardship requirements there is a good chance.



Does a seller of a short sale home have to pay any taxes?



If it is a seller's primary residence the answer is no. The Mortgage Relief Debt Act of 2008 does not permit lenders to issue a 1099 to a borrower for a deficiency balance on a primary residence.



If it is a second home or an investment property the seller will receive a 1099 for the deficiency balance and it will be treated as income on the seller's tax returns.



Will A Short Sale Destroy the seller's Credit?


Yes and no. The short sale may not show up on your credit. In fact, most mortgage trade lines report “Mortgage Paid” after a short sale. Any late payment history will still appear, as will any Notice of Default filings. What won’t report is an actual foreclosure. A promissory note may prevent the lender from reporting the mortgage as a loss. In today’s credit market, a foreclosure may prevent you from obtaining a mortgage for at least 5 years, longer than a bankruptcy.



Will a seller owe any money after the short sale?



In some cases the lender may determine that a seller has sufficient assets and/or income to contribute towards the loss. They will ask the seller to sign an interest only promissory note for a set amount paid back over a set period of time. If the seller does not agree and this can not be negotiated, the lender will not accept the short sale.

If you have further questios on the short sale process please do not hestitate to call or email me.

Franziska Smith
Coastal Elite Properties
239-390-1150
franziskasmith@gmail.com
www.LeeCollierHomesmls.com
www.CoastalEliteProperties.com

SW Florida Real Estate Insider - Bonita Springs, Estero, Naples & Fort Myers Market

As a real estate agent I often get asked my opinion on home much longer it will be until we hit the bottom of the market. I sooooo wish I really had the answer to that!

I do however have a general opinion or guess. I have always thought that history repeats itself, and has alot to teach us if we would only take the time to look back.

Historically, as soon as common sense goes out the window, we are in trouble! Well we all know where common sense went in 03, 04 and 05. So here we are, in trouble.

For those who currently own a home - don't panic. Real Estate is not supposed to be about flipping and making money quickly (unless the property was distressed and it was remodeled). Real Estate is long term and should increase with inflation.

Click on the link for graphed data:

1975-2008 data

I also came across another good article that tries to answer the question.

It was written by Chris Kaucnik is the director of marketing for Home Warranty of America, Inc.

Where are we in this cycle?: Here is their opinion:

What Can a Half Century of Housing Inventory Data and Past Recessions Tell Us?

If you are considering buying, I believe that 2009 will be a good year to buy real estate.

If you would like help navigating the maket with all of it's inventory, foreclosures, short sales and yes old fashioned owner occupied homes (not in a short sale) just call or email me.

Franziska Smith

Broker/Owner

Coastal Elite Properties

239-390-1150 office

239-940-2995 cell

fran@coastaleliteproperties.com

www.LeeCollierHomesmls.com
www.CoastalEliteProperties.com

SW Florida Real Estate Insider -Homebuyer Tax Credt

HomeBuyer Tax Credit

There is a current law, signed by President Bush that allows for a first time homebuyer tax credit up to $7,500 for those who bought homes on or after April 9, 2008 thru July 1, 2009.

The House and Senate are currently involved in trying to bass changes to this bill to beef it up somewhat. The House wants to keep it to first time homebuyers and keep it to $7,500.00. The Senate would like to open it up to ALL purchasers and increase the credit to $15,000.00.

Of course all versions, including the current bill do contain a repayment feature. That differs depending on what version you are looking at as well.

Only time will tell which bill will end up being signed by our current President or if the current bill will stand.

I have attached a link to the realtor.com posting that features the current bill as well as the House and Senate Versions.

HOMEBUYER TAX CREDIT

If you are looking to buy or sell property in SW Florida: Fort Myers, Estero, Bonita Springs, Naples, Marco Island or the Beaches please give me a call at 239-940-2995.

Sincerely,

Franziska Smith

Broker/Owner

Coastal Elite Properties.com

www.LeeCollierHomesMLS.com

franziskasmith@gmail.com

SW Florida Real Estate - Mobile MLS search for Bonita Springs, Estero, Cape Coral, Fort Myers and the Beach, Naples and Marco Island

I know that many home buyers are in the preliminary stages and are not quite ready to start working with a real estate agent. There are many reasons to get me involved right at the beginning of your home search (will talk about this in future post) but for now, here is a mobile tool that will help you get some information on homes while you are out driving around.

My website MLS search has a mobile phone version:

MLS search link

(click on the link to see live version of software or type this direclty into your phones web browser) http://idxpro.cisdata.net/AR160706/Search/mobile

IDXPro Mobile may not display well on all devices.

This program was designed for iPhone and Blackberry devices, however, devices with a wide screen (340 pixels or more) may display and function nicely.
Smaller display screens will not display well with this version.

Features Include:
- Search by MLS Number, Street Address, City, Zip
- View full listing details and up to 10 photos
- While viewing a listing, find comparable listings nearby
- iPhone - view map location of properties
-ability to schedule a showing with me right from the property (just like my computer MLS search)

Searching for listings - From the main search page enter a street name, address, city, zip code or property type.

The less information you enter, the broader the search results. For example just entering a street name will return all listings on the street name.

Refine results by specifying bedrooms, bathrooms, minimum price and maximum price.

Click "GO" to get search results.

If you have any questions please do not hesitate to contact me.

I look forward to working with you!

Sincerely,

Franziska Smith

Broker/Owner

Coastal Elite Properties

239-940-2995 cell

franziskasmith@gmail.com

www.coastaleliteproperties.com

www.LeeCollierHomesMLS.com

SW Florida Real Estate Insider - Developments

I have recently started a new blog that will focus

on communities in SW Florida.

My first posting showcases some new construction opportunities from Sarasota to Naples.

You will be re-directed to the builders website, some of which will not let you click back to this blog post to get to the other sites. So make sure you know how to get back here!
The easies way to avoid this is to hover over the link with your mouse, then RIGHT click on the link, and choose "open in new window". This way this original blog post will always be open.

If you are interested in more information or would like a community tour either call or email me or simply register on the development site that you are on.

Link to Developer Websites

Franziska Smith
Broker
Coastal Elite Properties
239-940-2995 cell
franziskasmith@gmail.com

http://www.coastaleliteproperties.com/

SW Florida Real Estate Insider -Short Sales

Short Sale Guidelines

As most people know, there have been an unprecedented amount of short sales. This is where a seller is selling thier home for less money that they owe the bank. It is not a foreclosure, but the lender is still taking a loss on the property and has to agree to loss they are taking and the sale to the new buyer.

This of course reflects negatively on the sellers credit. In many cases the seller is behind on their payments during the time they have been trying to sell the home and can be very close to foreclosure.

Suntrust Bank - Wholesale division has just issued new guidelines to use when assisting borrowers who have had a short sale on a previously owned property.
This policy becomes effective on or after Monday, January 12, 2009.

Here are some of the highlights:

• A minimum, of two (2) years must have elapsed since the short sale occured and all of the following re-established credit guidelines must be met:

• A minimum of three (3) credit references (one must be a traditional credit reference and one must be housing related)

• No more than two (2) 30 day late payments in the 24 months preceding the loan application,

• No late payments on housing debt since completion of short sale, and

• No new public records for bankruptcies, foreclosures, deeds-in-lieu, unpaid judgments, unpaid collections, garnishments, liens, etc. since completion of short sale.

In summary, a homeowner who sold their home via a short sale process only has to wait 2 years to try to obtain new mortgage financing, but must keep thier other credit as stellar as possible.

I would be a good idea to have a two year plan to monitor your credit and make sure that you do not have any collections, liens or judgements showing up on your credit report.

If you have any questions about this or any other real estate topic just call or email me.

Sincerely,

Franziska Smith
Broker
Coastal Elite Properties
239-940-2995 cell
franziskasmith@gmail.com

SW Florida Real Estate-New Construction deal in Estero

Lennar has some great deals on homes nearing completion!

Currently in the Manors section of Bella Terra is a Sabal Palm model that will complete in March 2009.

This home has a natural preserve & lakeview home site and was just reduced from $329,990

to $311,000, which is a great price for a home with all the upgrades this one has, plus the excellent location.

Specs:

Sabal Palm - E2 $311,000

4 bedroom, 2 bath

Living, Dining, & Family Room Design, 3 car garage

2463 SF Living Area ~ 3356 SF Total Under Roof

Home is loaded with upgrades including granite countertops, raised panel maple cabinets, 18" tile throughout all living areas, laundry room sink & cabinets,and much more

Here are some pictures of the model:

If you are interested in viewing this home, Bella Terra or other listings in SW Florida please give me a call or send me an email.

Sincerely,

Franziska Smith

Broker

Coastal Elite Properties

a division of Bonita Estero Realty Corp

239-940-2995 cell

franziskasmith@gmail.com

www.CoastalEliteProperties.com