Short-Sale Buying Opportunities

It is commonly accepted that the current Florida Real Estate market in certain areas is going through difficult times. In addition to an increasingly large inventory of homes remaining on the market for extended periods, Florida is now currently experiencing more and more foreclosures and short-sales.

A foreclosure sale occurs when an owner has defaulted on his/her mortgage repayments; the lender has initiated foreclosure proceedings and taken possession of the home. The home is then placed on the market, usually at a very advantageous price, in an attempt to achieve a quick sale minimizing the lender's losses.

A short-sale occurs when the owner is in default on the mortgage, yet prior to foreclosure taking place. With the agreement of the lender (which is seeking to avoid the expense of bringing foreclosure proceedings) the owner retains title to the home and places it on the market. Again, the home is usually priced very aggressively in order to achieve a speedy sale. One caveat in such a sale however, is the seller needs to be vigilant in seeking to minimize his/her future risk by not signing any document at closing with a provision in it allowing the lender to sue for any portion of the unpaid debt at any future date; or, the signing of a deficiency note.

The buyer initially agrees terms with the seller. However, the purchase contract is then subject to third party approval by the seller's lender.

One thing that must be kept in perspective is the necessity for patience. One would think time would be of the essence in these transactions. However, this is not generally the case. This process can take from as long as 4 weeks, upward to 3 months. This is not a typical transaction, and the mortgage servicer's loss mitigation department will have to approve all aspects of the sale; including price, conditions, brokerage fees, and other miscellaneous costs, as well as the final settlement statement.

It is also important to note the third party (lender/investor) is under no obligation to consider, respond to, approve or disapprove an offer within any specified amount of time. This can prove to be a real challenge.

Savvy buyers recognize that while these circumstances are most unfortunate for the seller, they do offer an exceptional opportunity to purchase a home at a discount well below market price.

Florida Ideal Realty is involved in a number of these type of transactions, representing buyers' and sellers' interests. If you would like us to assist you in identifying foreclosure or short sale opportunities for your home purchase, just let us know and we will do our absolute best to find a great deal best fitting your purchasing criteria.