Fort Lauderdale Beach Real Estate

Jon C. Mumford, REALTOR-ASSOCIATE, CRS, ePRO, GRI, GREEN, RECS, SFR, SRES

Archive for April, 2008

Short Sales, closing them and credit score implications

Posted by fortlauderdalebeachrealestate on April 30, 2008

As we all know there is no shortage of properties listed for sale in South Florida as “short sales”.  I wrote about this topic some time ago and just wanted to share some new information.  I recently attended another training seminar on short sales and learned several valuable tips.  This was given by Joe Roberto, of Roberto & Associates, a local title company in the business for 18 years.  I strongly recommend him and his company to anyone, whether a buyer or seller in a short sale situation.  Although in Broward County the buyer usually chooses the title company and pays for the title insurance, I would suggest that my sellers in short sale situations ask the buyer to use Roberto & Associates, and do so in the actual listing itself.

Although short sales are long and involved, having an agent and title company well versed in them can make the process move along much faster.  A few tips that I learned are:

  • Don’t do a deposit upon banks approval, have the buyer pupt $1,000 down with the offer and hold it in escrow
  • Don’t do a closing date so many days out from the banks approval, do an actual date about 45 days out.
  • Include a preliminary closing statement showing payoff amounts to the first and second
  • Generally speaking, the first mortgage holders seems to be looking for about 80% of the balance while seconds are looking for about 10%-this is all negotiable and depends on all the other pieces of the puzzle

While this is still a better alternative to foreclosure, it does have an affect on your credit score.  I just found an article that talked about it and wanted to share it with you.

Jon

How is the Seller’s Credit Effected By a Shortsale?
By: Tim and Julie Harris

Sellers will take as big a hit on their credit by going through foreclosure as giving the lender a deed-in-lieu of foreclosure. Points lost on a FICO score are as follows:

Foreclosure or Deed-in-Lieu of Foreclosure
Both of these solutions affect credit the same. Sellers will take a hit of 200 to 300 points, depending on overall condition of credit. This means if a seller’s FICO score before foreclosure was 680, it could dip as low as 380.

Short Sale
The effect of a short sale on a seller’s credit report is identical to that of a foreclosure. The ding on credit will show up as a pre-foreclosure in redemption status. Which will result in a loss of 200 to 300 points. This means a short sale with a previous FICO of 720 will see it fall from 520 to 420.

The effect on a consumer’s credit report—foreclosure vs. short sale—is the difference between being hit by a train or a bus.

Here’s why:

Waiting Period Before Buying Another Home

Foreclosure or Deed-in-Lieu of Foreclosure
A seller who wants to buy another home after foreclosure will end up waiting about 36 months before a lender will offer any kind of interest rate that makes sense.

Short sale
A notation on a consumer’s credit profile of ‘settled for less than owed’ (short sale) precludes the consumer from obtaining an institutional loan for 24 months, depending on the lender’s program and regardless of FICO score. Fannie Mae guidelines require 24 months seasoning, and there’s no way to get around this.
   
Short Sale/Foreclosure Deficiency Judgments

The bad news is a seller could be subject to a deficiency judgment for the difference between the loan amount and the amount paid. In California, purchase money loans are not subject to deficiency judgments; however, hard money loans, equity loans and refinances are. Some other states have laws regarding personal guarantees, which could also result in a deficiency judgment, if the home owner is held personally liable for loan repayment.

The lender has sole discretion whether to pursue a deficiency judgment in those instances when the judgment is permitted. To determine whether a pending foreclosure or short sale is subject to a deficiency judgment, talk to a real estate lawyer.

Posted in Blogroll, Real Estate News, Selling Real Estate | 10 Comments »

The power of photos in your listing

Posted by fortlauderdalebeachrealestate on April 4, 2008

I just read this article and wanted to share it with you.  As I’ve been saying for a long time now, if you have your property listed for sale with a REALTOR that doesn’t use digital photos to promote your listing online, you are listed with the wrong agent.  Given the current level of inventories vs sales of single family homes condos in our South Florida real estate market, we have a 29 month supply on the market as of last month.  What does this mean?  If there were to be no other properties listed for sale from here forward, it would take 29 months(almost two and half years!) to sell our current inventory.  Call me for details on how and where I promote your property online with photos and visual tours!

Jon

Photographs that accompany home listings on the Web or in brochures, newspaper advertisements, flyers, magazine articles, and other marketing materials play a significant role in attracting buyers. These images serve as the first impression, and buyers often decide whether or not to see a home in person based on their quality and presentation.

Research reveals that the more photos a listing has, the quicker it sells. A property with a single photo spent 70 days on the market (DOM) on average, while DOM fell to 40 with six photos, 36 with 16 to 19 photos, and 32 with 20 photos. Additionally, listings with one photo sold for 91.2 percent of the original price, while homes with six or more sold for 95 percent of the original price.

The photos to be used in an agent’s marketing materials should be taken by a professional, with experts noting that sellers will recoup the costs of professional photos if their homes sell faster and at a higher price.

Source: RISMedia, Gar Benedick (04/01/08)


Posted in Uncategorized | Leave a Comment »

April 2008, Life at Home

Posted by fortlauderdalebeachrealestate on April 2, 2008

Life at Home, April 2008 I am pleased to present you with this month’s issue of Life at Home, just click on the link to view.

Jon

Posted in Buying Real Estate, Selling Real Estate | Leave a Comment »

March 2008 Sales Statistics

Posted by fortlauderdalebeachrealestate on April 2, 2008

New Listings

  • Single Family-2,336(9% lower than 07′, a year ago it was 3% lower)
  • Condo/Townhome-2,578(23% lower than 07′, a year ago it was 4% higher)
  • Total all property types-7,485(12% lower than 07′, a year ago 8% higher)

Total Available Inventory

  • Single Family-12,558(7% higher than 07′, a year ago it was 45% higher)
  • Condo/Townhouse-16,237(3% lower than 07′, a year ago it was 58% higher)
  • Total all Property Types-37,814(1% higher than 07′, a year ago it was 56% higher)

Single Family Sold

  • 434 closed sales, 19% down from 07′, a year ago it was down 18%
  • Median sales price, $300,000, down 20% from last year

Condo/Townhome Sold

  • 553 closed sales, 9% down from 07′, a year ago it was down 21%
  • Median sales price, $138,000, 29% down from 07′, a year ago it was down 5%

Given our current inventory and sales levels, if there were to be nothing else listed, we have a 29 month supply of single family homes on the market and a 29 month supply of condos on the market.

 Want to know what this means to you?  Give me call, 954 562 4991

Jon

Posted in Buying Real Estate, Sales Statistics, Selling Real Estate | Leave a Comment »