Florida Home Buyers and Investors Blog

OK, so my inbound calls are increasing.  Great.  But many callers are asking about these "Short Sales" or Foreclosures that are available.

Well, yes, there are plenty of properties in various stages of foreclosure proceedings.  Finding a property you like that is at the right stage can be complex and frustrating.

Remember, not ALL homes that go to auction are a good deal.  Many of the properties have debt greater than the value of the home.  Banks make every attempt to get as much they can for the property to reduce their losses.   If they cannot sell the property to cover the liens and fees, they will sometimes resort to a Short Sale.

Short Sale is where the bank becomes the seller and negotiations become very complex.  The owner is sometimes still residing in the property and understands the situation.  Using good judgement is recommended.  You don't go in boasting about what a great deal you are getting to someone who is loosing their home.  The value of the property is less than what the bank needs to satisfy the liens. I highly recommended you utilize a Real Estate agent who knows the ropes.

The difference between what is owed and what is received is a shortage, and the bank will charge it off, or back to the original owner.  Laws in some areas have recently been passed that people who lost their homes to Foreclosure Short Sale, do not have to pay taxes on the difference.

Banks do not want to own the Real Estate, and the more Real Estate they have on their books, the less money they have to lend to other more qualified buyers.  Remember, Banks NEED to lend money.  That is how they operate.

On a Short Sale, the bank will usually require the buyer to pay for ALL of the closing costs, except for Broker commissions.  Even commissions are restricted and cannot be excessive.

So, for Real Estate Agents handling these transactions, means TONS of work for very little compensation.

One more thing.  If you are looking for a good deal and Short Sales are on your list, make sure you are a highly qualified buyer.  No 100% financing deals.  You WILL be required to come up with a deposit and pay for closing costs.  Make sure you know what you are getting into.