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Peter Mohylsky's Blog

By Peter Mohylsky | Agent in Sandestin, FL
  • Deed in Lieu of Foreclosure

    Posted Under: Foreclosure in Fort Walton Beach  |  March 21, 2013 12:54 PM  |  275 views  |  No comments

    A deed-in-lieu is where you give the deed to your house to your lender and the lender does not foreclose. Thus, the concept "in lieu," meaning "instead of."

    The pros of a deed-in-lieu include unloading your property with little hassle; not having to suffer the embarrassment of having the sheriff hold a foreclosure auction right on your front porch (which is the practice in many parts of the country); and you can reach agreement with your lender in advance as to how much money (if any) you will have to pay the lender.

    In many deed-in-lieu arrangements, while the lender will agree to take the house back and cancel your loan, sometimes it comes at a cost, i.e., you will have to pay something for this. Compare this to a foreclosure, where you won't know what the house will sell for, and in many states you can be sued for the difference between what you owe and what the house sold for (called a deficiency judgment).

    One more positive: Congress just extended the "forgiveness of debt" law for 2013, so in many situations you will not have to pay tax on the debt that was forgiven when the lender took the deed-in-lieu.

    Compared to a foreclosure, I cannot think of any negatives by doing a deed-in-lieu. However, if a short sale is at all possible, I would opt to go that route instead of giving the deed to your lender. But whether you lose your house by way of a foreclosure or a deed-in-lieu, or enter into a short sale, your credit will be seriously impacted.

  • Short Sale Bargins

    Posted Under: Foreclosure in Fort Walton Beach, Investment Properties in Fort Walton Beach  |  January 12, 2013 4:17 AM  |  339 views  |  1 comment
    The market continually changes.  There are some very asute buyers nd sellers who anticipate trends in the market and benefit.  The majority of people lag slightly behind the changes. 

    Sellers of homes are verifying home values with automated systems, broker price opinions (BPOs) and in some cases, appraisals. In short, they are ensuring that offers accepted reflect current comparable properties.

    Key points for buyers interested in short sales to remember:

    • Agents price short sales to reflect the homes value on the current market.  It is likely and often a virtual certainty that there will be multiple offers and that the accepted offer will be at or above list. Going in 20% lower is likely a waste of time.
    • Lenders look at the net amount of an offer. A full price offer with 5% in closing costs is not a full price offer. Look at the net, lenders will.
    • Keep the offer clean and simple. Cash is king and so is simplicity, focus on the net amount and demonstrate the ability to close quickly. The fewer stipulations and the shorter the time frames the better.
    • Homes are almost always transferring “as is”, repairs are almost never completed.  Don't ask.
    • Don’t be surprised if the lender counters. 
    • Don’t be surprised if the process drags on and on. Sellers are mostly ambivalent about short sales; As many former owners and many buyers will note, dealing with the bureaucracy can lead to aggravation, stress and ulcers. The most important thing for a particular seller and buyer is merely one of hundreds for a lender, and they treat it as such.
    • Don’t be surprised if the deal falls apart. A short sale has many variables that are completely outside of the buyer’s control. Of all involved, the buyer has the smallest and least influential role after contract acceptance. Often, buyers grow weary of the process and terminate realizing that the ends do not justify the means.

    The main takeaway for home buyers chasing a short sale is to understand that it’s pointless to “low ball” a home as the lender is highly unlikely to approve it, in the end it’s going to come down to the contract reflecting the MARKET VALUE.

  • Buying vs Renting along the Emerald Coast

    Posted Under: Home Buying in Fort Walton Beach, Rent vs Buy in Fort Walton Beach  |  January 5, 2013 1:33 PM  |  313 views  |  1 comment
    Problems with the fiscal cliff was imagined or averted, I am not sure which at this point in time but I do know that it is time to review the reasons to buy your primary residence.  This kinda feel like a Letterman routine but it is not a joke.

    Top 10 reasons to own rather than rent

    1. You own it: With no landlord, you make the decisions.

    2. You deduct it: Mortgage interest, property taxes and some costs involved with buying a home can be deducted from federal income taxes.

    3. Interest rates: The cost to borrow mortgage money is at an all-time low. If you’re going to buy, this is the time to jump into the market.

    4. You invest in it: Rent money is gone forever. Mortgage payments build home equity ownership interests.

    5. You save for the future: Home equity is a ready-made savings plan. Sell it and you can make up to $250,000 cash without owing any federal income tax on the profit.

    6. You can predict expenses: Unlike rent, a fixed-mortgage payment doesn’t get more expensive over time.

    7. You pick it: Choose from different neighborhoods, styles and price ranges.

    8. You create it: Decorate, renovate, get a pet or paint the walls whatever color you want – it belongs to you.

    9. You live in a neighborhood: You and your neighbors take pride in the local schools, roads and more – and you work together to build a friendly community.

    10. You spend money on yourself: When you buy a chandelier or hardwood floor or kitchen cabinet, you’re spending hard-earned money on yourself and building your equity at the same time.

  • Mortgage Debt Relief Act

    Posted Under: Foreclosure in Fort Walton Beach  |  November 15, 2012 5:11 AM  |  162 views  |  No comments

    The Mortgage Debt Relief Act  is due to expire at Midnight, December 31, 2012. This means that distressed homeowners who are trying to complete a short sale or foreclosure will be liable for taxes on the amount of their loans which is forgiven – IF their transaction does not close by December 31st.

    There has been a lot of speculation throughout 2012 about whether this law would be extended. It appeared in August that a deal might be in the works, as the senate had approved their version of a plan to extend debt forgiveness. But as far as I can tell the election has derailed this effort and I’ve seen no mention of any concrete plans to reach an agreement on an extension.

    If you are a distressed seller, and your home is in danger of foreclosure, but you are not currently under contract to sell, and you have no offers on the table, it may be time to plan your exit strategy. Should you walk away before year’s end? Perhaps. It depends on your specific situation, and whether you would actually owe taxes if the MDR Act should expire with you still in a distressed situation. It’s a tough call, but the only thing worse than a foreclosure or short sale is owing taxes on a foreclosure or short sale. That will just add insult to injury.

    So, unless congress suddenly puts all this to rest, I think this situation will force more distressed sellers to become highly motivated to sell to anyone at any price or terms that will get them out from under a looming tax bill.

  • HAFA

    Posted Under: Home Selling in Fort Walton Beach, Foreclosure in Fort Walton Beach  |  October 31, 2012 6:42 AM  |  181 views  |  No comments

    If the cost of homeownership has become too much to bear, the MHA Home Affordable Foreclosure Alternatives Program® (HAFA) allows you to transition out of your home and avoid foreclosure with $3,000 in relocation assistance and peace of mind. This particular program is scheduled to phase out at year end.  It probably will be replaced with a similiar program but that program is stuck in Washington. Call me if you have any questions.
  • Florida Short Sale Trends

    Posted Under: Foreclosure in Fort Walton Beach  |  October 17, 2012 7:41 AM  |  151 views  |  2 comments
    I keep track of the short sale trends because of the impact the housing bubble has had on people's lives in our area.  What I have discovered is :

    -Closed transactions for both short sales and foreclosures have stabilized in the 5-6000 per month range. This represents approximately 37 percent of all sales.

     -Listings for short sales continue to fall significantly, while those for foreclosures are declining gradually. Part of this is due to the use of bulk sales by the Federal government, bypassing the MLS process.

    - Prices for both short sales and foreclosures are trending upward, a result of the interest of investors in buying up what they see as bargain real estate.

    - The shadow inventory continues to decline. Lenders have shown an increasing willingness to encourage short sales, so that they do not have to submit properties to the foreclosure process. Doing so in Florida subjects them to a lengthy judicial process, during which they incur costs of holding and managing property. I expect this decline in shadow inventory to continue.
    Legislation currently in place to expedite short sales is expected to expire unless it gets thru the log jam in Washington, so keep your fingers crossed. This legislation is a good thing.
  • Underwater?????

    Posted Under: Foreclosure in Fort Walton Beach  |  October 9, 2012 2:22 PM  |  136 views  |  No comments

    Did you purchase or refinance at the top of the Destin real estate market?
  • Do you need to sell your Fort Walton Beach or Crestview property because you cannot keep up with the payments?
  • Is your Navarre house or Sandestin home value less than your mortgage payoff?
  • Are you an Eglin AFB or Hurlburt Field airman who must PCS, and you owe more on mortgage than your home is worth?
  • A “Short Sale” may be your best option. I can work with your bank to get your property sold, forgive your excess mortgage and have them pay your closing costs—depending on your situation.

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