Life In Bonita Springs

Keys to a Successful Short Sale 

There have been several calls and emails from home owners who are either are struggling through the short sale process or wondering what it really takes to negotiate a short sale.

From the outside looking in, they some like hostages to transactions going nowhere so I thought I’d just shove some info out there so folks will know a what sort of things they should be doing and at the very least be able to ask some questions if they are struggling through a short sale.

First and foremost, the situation of selling real estate short is a legal and financial matter, not a real estate matter. If you haven’t spoken with a real estate attorney, please, please, please make that the first step in your plan.

For those who do not know, a short sale is the process of a home owner approaching their lender to ask for debt forgiveness. The home owner is, in effect, selling their real estate at a price short of what they owe on their mortgage.

Selling the home, getting the contract is the easy part. The devil truly is in the details. Those devilish details are where some home owners are looking for help.

The fabulous tales of lengthy negotiations followed by months of quiet should rightfully be questioned by the seller because sometimes silence actually does mean that nothing is being done. If you feel you’re spinning your wheels trying to sell short, here’s a suggested list of what you probably need to sell.

If you haven’t been asked or provided the items you really do need to ask questions. You also should have been given a list similar to this when you listed your real estate short.

This isn’t the “craved in stone” package to process a short sale. Consider it a guideline and pretty much the basic starting point for most lenders. You’d likely need no less than these items to effectively submit a package to the short sale lender.

1. Dated, signed listing agreement with real estate commissions listed.
2. Full MLS report from your real estate agent.
3. A seller signed authorization form for the real estate agent and/or attorney to negotiate with the lender on seller’s behalf.
4. Signed, handwritten hardship letter explaining the circumstances.
5. A complete seller financial statement.
6. Two (months) recent bank statements.
7. Two months of pay stubs or written explanation of unemployment. Proof of social security or pension if receiving.
8. Dated, signed purchase agreement – the real estate sale contract
9. Buyer’s fresh proof of funds or preapproval.
10. Three recent, like-kind, comparable sales.
11. Last two years of seller’s tax returns.
12. List of repairs for the residence, if needed.
13. Preliminary HUD1 Statement provided by attorney or title.

On a case by case basis there are going to be other items the lender may ask for. They will probably ask for the same stuff more than once, likely twice, possibly ad nauseum. After a few weeks, they may request updated paperwork, statements, proof of funds, etc. because they just have to make sure the sellers didn’t hit the megaball between then and now.

Keep in mind, if the lender posts the requested items in their online system, email or call your agent to ask for these items and your agent doesn’t read their email or return calls this process will go on indefinitely. That probably should have put that on the list with stars and asterisks sprinkled around it.

There is an example in .pdf of the list, the authorization form, financial report hosted online at http://budurl.com/ShortSaleList. If you need it emailed, faxed or snail mailed, just ask and I’ll send you off a copy.

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

You can subscribe to a weekly email newsletter by visiting www.LifeInBonitaSprings.com and entering your email in the subscription area on the center pane of the web page or by adding us to your reader by subscribing to this blog. Oh, and if you’re reading this content anywhere else but www.LifeInBonitaSprings.com or Naples Daily News it is probably stolen.

Sundays are generally reserved for flowers but the weather’s been chilly. I found something almost as pretty as a flower when I stopped to listen to some blue grass music.  More to come soon, of course.

Why So Many Homes For Sale?

Today I was asked, “Why are there so many homes for sale in Hunters Ridge Bonita Springs ?”  Here’s the scoop … simply looking at the number of homes or units of real estate for sale online isn’t a true statistic. 

First, does it make any difference if there are sixteen homes on the real estate market if there are one hundred units in the community or one thousand?  Well, of course it does.  Real estate statistics are based on closed real estate sales and the current listed real estate inventory.  So regardless if the community you’re interested in is Hunter’s Ridge, Pelican Landing, Marbella at Spanish Wells or any other community you can easily determine whether that “number of real estate units” is really excessive.

You’d be wise to be able to know how to calculate the inventory for the sake of your purchase offer to buy any real estate, also. I prepare them for my home buyers so they understand the inventory in their market and can gauge their offer accordingly.

You can determine the absorption rate yourself or ask your agent to do it. Lawd have mercy, I hope you picked a real estate agent that knows how to do it.  The success of your real estate investment depends upon it, whether you’re buying or selling.  To learn more about absorption rates and real estate inventory, real the following post:

What is The Absorption Rate of Your Bonita Springs Home

Foreclosures and Failed Real Estate Offers

So you keep making offers on property and not “getting the deal”. I’ve gotten a couple of emails from buyers asking that same question who feel there are shenanigans going on. Without first hand knowledge of the actual transactions, there are a several very real dynamics in play which can affect the outcome of an offer to purchase.

First and foremost is the means of how a buyer is going to pay for the real estate purchase. Last month about forty percent of the closed sale transactions involved a bank or an investor making the decision, whether it was a short sale or a foreclosure. If you’re a buyer in this real estate market it’s a necessity to have proof of funds or a mortgage preapproval in your hot little hands. This documentation must accompany the offer.

The proof of funds must be in writing, legible and from the most current month available. If it is a short sale you’re trying to purchase and you do get the contract executed you will likely be asked to update the proof periodically.

If you’re financing your purchase have a mortgage preapproval from a reputable lender, not a vague online lender. You may be asked to apply with the bank who is selling/servicing the foreclosure. Things go smoother with less resistance so either do it or move on to another property.

Some foreclosures simply do not qualify for financing so if you’re writing contracts on properties that don’t qualify; you’re spinning your wheels and killing trees.

Simply put, there could be other buyers more qualified than you. There are properties that get listed with a 15 day “first look” period. In a nut shell, buyers who are purchasing a primary residence or using public funds get the first crack at the property. You can still place your offer if you’re not going to use it for a primary residence but your offer is on hold until that fifteen day period expires.

If a buyer doesn’t come along with the intention of making the property their primary residence your contract will then be considered. If that happens, remember that fifteen days has gone by and there are probably multiple offers to purchase competing with yours. If your offer wasn’t as robust as it needed to be, someone else will probably get the deal.

I don’t know why you wouldn’t, but if you didn’t do it before you made the offer, you’ve had fifteen days to get a market analysis and absorption rate for the area so you could offer your highest and best.

The truth of the matter is that sometimes full price offers just aren’t enough. Just because a home is listed at a certain price doesn’t mean it’s properly priced. It may even be drama priced to stimulate multiple offers.

A full price offer on a home that is priced 10-15% below market isn’t a full price offer on the value. The value is established by recent closed sale comparables and the demand in the market place.

Remember, in the foreclosure market or markets where the inventory surplus has been absorbed, committed buyers who’ve been where you are and have already written a half dozen failed offers have gotten serious about putting a roof over their head. They write offers that stick.

The secret is treating your purchase like a business and becoming immersed in the market, educated on the process and be up to date on values and demand. Sometimes that education only comes with writing a several offers that don’t work out.

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

You can subscribe to a weekly email newsletter by visiting www.LifeInBonitaSprings.com and entering your email in the subscription area on the center pane of the web page or by adding us to your reader by subscribing to this blog. Oh, and if you’re reading this content anywhere else but www.LifeInBonitaSprings.com or Naples Daily News it is probably stolen.

Bonita Springs National Art Festivals 2011

The Center for the Arts of Bonita Springs currently has two fine arts / fine crafts festivals scheduled for the year 2011 at the Promenade at Bonita Bay Shopping Center.  Works of art from over two hundred National and International artists will be available for viewing.  Proceeds help support the many programs of  the Center for the Arts.

The commitment to presenting quality artwork and a pleasant experience to the patrons has resulted in the highest ratings by the National ranking services.  View and buy artworks directly from the artists who produce the work.

This is a juried event.  Artists are selected by a panel of experts.  Festival proceeds support community art activities.

Be part of the largest attended art festival in Southwest Florida.  Dates and locations:

January 15-16 & March 12-13, 2011

Saturday & Sunday

10 am - 5 pm

Click the map for art festival location.

Choosing a Short Sale Listing Agent

While email isn’t new or revolutionary in real estate it has become instrumental to the success of most contract negotiations and closings, especially when a property is a short sale or a foreclosure.

This isn’t a general whine about real estate agents that don’t or won’t properly use email. Email has become the single most important means of communication with bank involved real estate transactions. It’s crucial. That’s important to know because last month about forty-three percent of the closed real estate transactions in Sunshine MLS last month were either a short sale or foreclosure.

At this stage of the game email is as fundamental as answering the phone or returning a voicemail. It’s so basic that most consumers probably don’t realize that it will literally determine the speed, ease, success or failure of their transaction.

The real estate agent you choose to list your home could become your worst enemy. You should know that the length of time you are in financial, legal and emotional turmoil is going to probably be doubled, even tripled because of the lack of basic communication through the basic clerical office skill of reading and responding to email.

The two most trying transactions I was involved in last year involved agents that didn’t regularly read or respond to email. Not just my correspondence but those from the lender, their seller, the title company or anyone else involved with struggling to get the property closed. For those not in the know, a missed correspondence from a lender is grounds to bounce a transaction out of the lender’s system. Do not pass go. Do not collect two hundred dollars. Start over.

As a seller of short sale real estate you have probably heard the horror stories of how painfully long it takes to get a property approved. The fact of the matter is that while short sales are more work they really are being processed faster.

Those two properties I mentioned were on the market fifteen months and twenty months, respectively, from date of list through closing. That is a ridiculously long amount time.

The sellers of those properties probably didn’t even know it shouldn’t have taken that long. The sellers of those properties probably had larger financial issues that just being upside down in their mortgages, too.

They then had the pleasure of suffering for months at the hand of an inept agent that let something as simple as not reading or responding to email effect their transactions. Oh, and their wallets because they both kept current on HOA dues to avoid another lien and additional penalties and fees.

Folks, if you are caught in the predicament of being upside down in a mortgage and needing to sell short, part of your listing agent interview should include asking for seller references from past transactions. Any agent with experience and a track record of success can prove their success and offer endorsements. They can even print out the listing history of their last couple of short sale transactions in case you have a curiosity about how long it they from start to finish.

Sellers are usually exhausted when they decide to sell but they still need to interview at least three agents for the job. I find it impossible to believe that either of the list agents I dealt with were the best possible choice of out three interviewed.

Come to think of it, it might be smart to begin with an email invitation to a listing interview. That would certainly separate the wheat from the chaff.

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

You can subscribe to a weekly email newsletter by visiting www.LifeInBonitaSprings.com and entering your email in the subscription area on the center pane of the web page or by adding us to your reader by subscribing to this blog. Oh, and if you’re reading this content anywhere else but www.LifeInBonitaSprings.com or Naples Daily News it is probably stolen.

Get Your Cookies Before It’s Too Late

So, I saw someone mention buying their Girl Scout Cookies online and thought that I should get some. After a shout out on Facebook a fellow real estate agent I know said, “My daughter is a girl scout, what would you like to order?” 

Continuing on, I placed my order via Facebook message and said, “Should I mail a check to you or drop it off at your office?”  She replied, “Do you have a pre-approval for financing or proof of funds for said cookies?”  You gotta love that!

If you’re looking for Girl Scout Cookies this year and don’t know a Girl Scout, just email me and I’ll hook you up with a Girl Scout contact but you have to order before January 23, 2011. 

I don’t think she was serious about the proof of funds.

Photo courtesy of Library of Virginia

Southwest Florida Real Estate Statistics

Real estate sales for the month of December 2010 indicate the largest share of closings are for properties under $400,000; a little over 79%.  Additional real estate market reports for December 2010 are located:

SW Florida Real Estate: Condition of The Sale

SW Florida Real Estate: Historical Sales in December 2001-2010

Historical Real Estate Market Reports are archived at: Real Estate Market Reports

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All information is deem accurate, not guaranteed and subject to change.  Check the date on this report for freshness.  If you have questions regarding your particular neighborhood, your street or your home specifically you’re welcome to contact us for a current market report. Real estate consumers that read this website are urged to seek independent, professional legal, real estate and financial advice before engaging in any transaction. All information is deemed, accurate, subject to change and not guaranteed.

Foreclosure, Short Sale or Equity Owned Real Estate

Real estate buyers are often interested in the amount of distressed real estate an area may be experiencing.  The month of December 2010 offered a slightly higher amount of short sales and foreclosures that closed.  The quarter end and year end likely had to do with the slight rise of bank involved real estate transactions.

From personal experience, I can tell you there is a push to get pending real estate transactions closed by year end. I personally had several short sales that had spent several months in the short sale process which magically approved the last two weeks of December.  Most of them closed in time, the balance will close in January.  There may be a slight rise in January for those approved real estate transactions that slipped past the end of year finish line.

Additional real estate market reports for December 2010 are located:

SW Florida Real Estate: Historical Sales in December 2001-2010

Real Estate: What Price Range Sold December 2010?

Historical Real Estate Market Reports are archived at: Real Estate Market Reports

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All information is deem accurate, not guaranteed and subject to change.  Check the date on this report for freshness.  If you have questions regarding your particular neighborhood, your street or your home specifically you’re welcome to contact us for a current market report. Real estate consumers that read this website are urged to seek independent, professional legal, real estate and financial advice before engaging in any transaction. All information is deemed, accurate, subject to change and not guaranteed.

December Real Estate How Many Units Sold Each Year?

You can’t see where you’re going unless you know where you’ve been.  To put into context the unit real estate sales of December 2010, there are nine other years to compare it to.  The graph indicates the lean real estate years are behind us. 

With such great real estate bargains out there we’ve quietly sold “boom year” levels of real estate.  Florida real estate has been picked on in the press for quite some time creating the rumor that we’re suffering down here and it’s just not true.  Sure, real estate prices are down but real estate is selling and that graph is the proof.

Additional real estate market reports for December 2010 are located:

Real Estate: What Price Range Sold December 2010?

SW Florida Real Estate: Condition of The Sale

Historical Real Estate Market Reports are archived at: Real Estate Market Reports

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All information is deem accurate, not guaranteed and subject to change.  Check the date on this report for freshness.  If you have questions regarding your particular neighborhood, your street or your home specifically you’re welcome to contact us for a current market report. Real estate consumers that read this website are urged to seek independent, professional legal, real estate and financial advice before engaging in any transaction. All information is deemed, accurate, subject to change and not guaranteed.