What is a Short Sale?

I still get asked this question a couple of times a month! Usually a buyer or seller will confess to me saying something like..."I don't really understand what a short sale means?" So here is the official definition.

A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by leins against the property and the property owner cannot afford to repay the liens full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt. Any unpaid balance owed to the creditors is known as a deficiency. Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties.
A short sale is often used as an alternative to foreclosure, which mitigates additional fees and costs to the both the creditor and borrower. A short sale will often result in a negative credit report against the property owner, however it is less damaging than a foreclosure report.

If you are having trouble making your mortgage payment or need to sell your property for any reason and the balance you owe is more than the property will sell for call a Realtor. Most good Realtors will also have connections with lawyers who can give you sound advice and point out your options. Once you have an understanding of all the issues involved you will be able to make an educated decision. Feel free to visit my website for more sound advice http://www.realestateinpalmbeach.net/.

 

Four Fun Things to do in West Palm Beach within Four Miles of each other!

CityPlace   Is the premier shopping, dining and entertainment destination in Palm Beach County and is the center of Downtown West Palm Beach.

Antique Row  Is a charming district with over 40 antique shops offering an impressive selection of 17th to 20th century antiques, fine and decorative arts, period deco and modern furnishings, and much more.  All within walking distance, this vast array of quality antiques stores, specialty shops and art galleries are complemented by several award-winning restaurants.  Architectural Digest, The New York Times, Art & Antiques, and House Beautiful have all heralded Antique Row as one of the east coast's premier antique districts, considered the "antique design center" of Florida. Discover West Palm Beach Antique Row Art & Design District, and see where the world's best interior designers have been shopping for more than 25 years.

 Raymond F. Kravis Center for the Performing Arts   Opened in 1992, the stunning $63 million Raymond F. Kravis Center for the Performing Arts holds more than 800 events each year, with more than 400,000 people in attendance annually. One of the premier performing arts centers in the Southeast, this copper and marble showcase is the center for cultural events in West Palm Beach and only truly respectable concerts, plays, ballets and operas take place here. Set on 10.6 acres of property at the highest point in the city, Dreyfoos Hall, named after its original benefactor, seats 2,193 and is the main performance venue. The 300 seat Rinker Playhouse is a black box theatre where much of the drama is performed and the 1400 seat Gosman Amphitheatre allows for outdoor entertainment.

www.palmbeachzoo.org  is a non profit zoological organization located at Dreher Park in West Palm Beach. The Zoo houses over 1,400 animals within 23 acres of lush tropical habitat. Its mission is to provide an open-air classroom of living creatures to foster awareness, appreciation and respect for the natural world. In addition to exciting animals from all over the world living in natural habitats, the zoo features a colorful carousel, an interactive water play fountain, a full service restaurant, daily performances of the "Wings Over Water" bird show, and many other programs and events throughout each day. The zoo offers a dynamic Summer Zoo Camp Program, a "Night Owls" Overnight Program, Field Trips, Outreach Programs, and a variety of special events such as "Winter in July", "Boo at the Zoo" and "Festival por los Animales." Zoo memberships provide free admission year-round. The zoo is open every day except Thanksgiving and Christmas from 9 a.m. to 5 p.m.

Top Four Home Buying Mistakes.

1. Hiring an inexperienced real estate agent. When you hire your doctor, your lawyer or your accountant you make sure they are well qualified to help you and have years of experience.  As the homeowner the seller pays the real estate commission, why wouldn’t you as a home buyer hire the very best real estate agent you can? It does not cost you anymore to hire the best. For more information http://www.realestateinpalmbeach.net/

2 Taking too long to make a decision.  If you find that perfect home don't procrastinate because as the weekend approaches the greater the likelihood another buyer will jump in.  When negotiating, time is a home buyer’s worst enemy and can be a home seller’s best friend. If you've hired an experienced agent the chances are you have already done your homework and are well informed.

3. Not doing your homework.  It’s not only about the money; often terms are just as important. If the home is vacant, the seller will likely want to close quickly.  If you're not a cash buyer then a letter from your lender stating that you are qualified and can close quickly may save you thousands of negotiating dollars.

4. Not keeping an eye on resale.  Remember that it is just as costly to remodel a kitchen in a home on the water as a home across the street from a busy intersection, and we all know which remodel will offer the better return on investment. So do your homework, don't take to long to make a decision if the right home becomes available and hire a realtor who will get you the best deal possible without losing the home you worked so hard to find. For more real estate help palmbeachrealestateguy.blogspot.com

Who do think will be driving the real estate market in the next decade? Men or Women?

The most recent nationwide studies by Florida Realtors and the National Association of Realtors has revealed that the number of female buyers has been growing substantially. I am seeing a similar trend. Based on the calls that I have been receiving, more single women are looking for homes to purchase than are single men.  In fact,  I am currently working with three times the number of single females than I am men.

In Florida, single men accounted for 11% of total buyers in 2010 compared to women at 18%. In a study by the Meredith Organization titled "The Rise of the Real Mom", only 44% of men considered buying a home important, compared with 74% of women.  It's women who still hold the American Dream of owning a home more sacred than their male counterparts.

Another study by Boston Consulting Group estimates that women control 73% of U.S. household spending and approximately $4.3 trillion of the $5.9 trillion in consumer spending. Let's face it; if it were just us men who controlled the spending, I am afraid we would hover between a deep economic recession or depression on a regular basis. I know I'm generally content to stay in the house we own now, on the same comfortable sofa that's only, well,  nine years new. For "Moore on Real Estate" by Palm Beach Real Estate Guy please visit http://www.realestateinpalmbeach.net/

Are Appraisals Preventing a Housing Recovery? Part 3 of 3

Fortunately, at the end of the day, I had a buyer and a seller that were both reasonable people, and who wanted to get the deal done.   As a result, my buyer came up $35,000 from the appraised value, and my seller came down $35,000. This is probably where you would you pat me on the back for a job well done… not so fast. The appraisal came in at $300,000 - exactly $125,000 below the Sales Contract price. The deal died.  A few months later, I found a comparable home in the area that sold at the same time as our property was under contract, and it had a sales price of $380,000…having to be completely remodeled!

 The appraisal could have been challenged but was so ridiculously low that this option was not pursued. The buyer bought another home and the seller took his home off the market.

Even if you assume that the purchase price could not be justified, had the appraiser done a thorough job making the appropriate adjustments based on recently sold properties, an opinion of value that was $50,000 below the sales price of $425,000 would have been enough to get the deal done. Shame on the lending institutions and appraisers for letting the pendulum swing too far in one direction years ago, over appraising properties and contributing to an economic crisis. Today, they are overcompensating by swinging the  pendulum too far in the other direction.

The banks and their appraisers are preventing home values from rising. I currently have a property under contract that has been appraised at an average of 10% below the selling price twice in four weeks - with two different buyers and two different appraisers. The seller will not reduce the price, and the current buyer will need to make a decision in the next three days whether or not to pay over the appraised value.

The seller, who is selling by owner, has two additional potential buyers right now who want the property and will pay the price. Four buyers in four weeks have searched for the best deal they can find and chosen this home. How can all of these buyers be wrong? The banks and their appraisers are seriously hurting home sellers, home buyers, loan officers, and Realtors. If they would let the free enterprise system work, we could see the real estate market begin to turn around. For "Moore on Real Estate" by Palm Beach Real Estate Guy visit http://www.realestateinpalmbeach.net/

Are Appraisals Preventing a Housing Recovery? Part 2 of 3

The day of the appraisal I waited at the property with my comparable sales in hand to help justify or at least come close to our Sales Contract price. The first thought that entered my mind when I saw the appraiser was "is he out of high school yet?" A young man walked in and as he introduced himself I took the opportunity to see where we stood on valuation. I casually struck up a conversation asking a series of questions.

"So what kind of adjustments do you make for a home with a recently updated kitchen and bathrooms?" 

His answered "unless they are within a year, we do not give them any value"

“The updates were about four years ago,” I explained, “and are quite extensive.” “The seller even took a wall down to open up the living room during the process". I added, but decided to move on.

"How about impact windows" I asked

 "We do not give them any value." He said much to my surprise.

"Did you notice the authentic Chicago brick circular driveway? There are also extensive Chicago brick patios in the back yard extending all the way to the water. It would easily cost over $40,000 to do this to any other property."

"We don't give it any value," he shot back, making notes on his clip board as he walked through the house.” He added, "A new buyer may not care about any of these improvements."

"Well...I had two buyers who must have cared about them because they both made offers within two weeks of each other and the property has only been on the market for six weeks," I noted.

"How about the fact it is on the wide part of the lake with panoramic views?" I asked, and then handed him one of my comparable properties. "This house sits at the end of a canal facing his neighbor about 25 five feet away, with no direct views and the soot collects on the water in front of their dock," I said, almost begging.

This may shock you...

"We don't make an adjustment for that," he retorted.

"The seller also buried the electric in the back yard and brought in the tropical landscaping and palm trees at a cost of about $15,000.  Here is a property that sold for $410,000 about 8 months ago with no landscaping, and it had to be completely renovated," I said, handing him the listing sheet.

"We don't adjust for landscaping."

“So basically, all you’re doing is appraising the land and treating the improvement (the home itself) as a shell?” I asked.

He didn't answer.

After this encounter, I went to work again preparing my seller to come down from our contract price and my buyer to come up from a possible low appraisal.  With years of experience in the real estate business, I have kept my fair share of deals together. To be continued.

Are Appraisals Preventing a Housing Recovery?

Over 40 % of homes in Palm Beach County are currently under water with the mortgage balance being higher than the market value. It is more important than ever to start selling the properties that buyers want to buy! Unfortunately overly conservative banks and their appraisers are squashing these real estate transactions with lower and lower appraisals.

Recently I had a property under contract for $425,000 with a local doctor. It was only on the market for six weeks, shown to three prospective buyers and two of them made offers. The second buyer's offer came in as high as $405,000 and was rejected.

I became a little concerned after reviewing the most recent sales and prepared my seller and buyer that there could be an appraisal problem. Had it been just four months earlier, I explained, we would have had the sales comparables to justify our contract price. More on this later.

After speaking with many of our local Palm Beach County Realtors, I am alarmed to find out many deals are falling apart from appraisals coming in below the contract price. The only option available under this scenario is for the buyer and seller to come to a new “meeting of the minds” Which means the buyer could bring more money to the closing table or the seller could accept less money than the contracted sales price. One agent recently confessed "if a buyer wasn't cash, it would be difficult to make a deal happen!"

These low appraisals are having an impact on Palm Beach County real estate sales. Although the appraiser has no vested interest in the outcome of the appraisal and is supposed to be objective and impartial, it almost seems as if they are in cahoots with the banks to bring in a low valuation thus reducing the banks risk. Market value is supposed to be based on what a willing buyer likely would pay a willing seller for a particular property, with neither being under pressure to buy or sell. 

So why would two educated professionals, one being a doctor and the other an attorney, after looking at multiple properties in the area , both make offers over what is considered fair market value? After all they both lived locally and had plenty of time to look at other properties before making their decision! To be continued…