Home Buying in Miami>Question Details

Danielle Bel…, Both Buyer and Seller in Miami, FL

Im looking 2 move from NY to MIA but need to educate myself on buying a ShortSale or Foreclosure. Whats a good resource?

Asked by Danielle Belmonte, Miami, FL Tue Nov 23, 2010

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29
Danielle:

I read all the answers below and they have merit. I think by now you know the difference between a short sale and a foreclosure. But to answer your question: your best resource is a good Realtor. It may be that an approved short sale with a nice down payment could be the way to go for you. Or a foreclosure . . . Each house and situation would have to be studied by you, your Realtor - and let's not forget the loan officer. The best deals are those where everyone works together to present an offer that will not only be accepted., but will go through to closing. Good luck!

Ofelia
2 votes Thank Flag Link Tue Nov 23, 2010
HI Danielle,
I see your questions below and the major difference between REO (which means bank owned) and short sale is that in the short sale the bank has not taken the property yet form the owner and you are actually offering a lesser amount to the bank thatn the owner owes on teh loan.

The REO her in Miami is a competitive purchase, mainy because there are many people who want to get in to this market. I tends to be more of a cash buyer scenerio. If you are getting a loan you are not at teh top of the list, but coulc still offer and you will find out in a short amo unt of tiem if the offer is accepted. (within a few days to a few weeks).
A short sale that is unapproved means that the bank has not even given the owner the go ahead to do the short sale. The owenr is the first person that needs to be approved by the bank. If they do not show enough hardship to do the short sale the bank wil lnot apporve it. If it is approved, it is a process of an offer that will be submitted to the bank and then you need to wait. No one can tell you how long the wait will be, it can be anywhere from a few months to many months. I have waited 6 months on one offer and never heard back and the client cancelled.
If you are going to arrive in Miami and want to get into this area of purchase you will need to rent a home while you search and make offers.

Do not feel that you cannot get a good deal on a regulare purchase. The motivated seller knows he is competing with the foreclosures and will price his property accornidngly. Recently one of my buyers purchased a townhome for 10,000 less thtn a short sale went for in the same commmunity just a few months apart. And the regular sale is usually in better condition that n the distressed property.

Another thing none of us has yet mentioned is financing. If you are considering a condo, many are not approved for financing so you will need to have a great mortgage broker to assist you and be prepared to put down a minimum of 25% so that you may quaify for a porgram that will do a limited review of the condo associaotn. that is not to say the association is in poor shape, it simpy means that banks have extremely strict guildlines.

As the others have said the internet is full of information, but again real estate is local and the best infomation is from a local realtor. The fact that you are doing your homework is great, so you are a step ahead of the game!
Feel free to call me to discuss the market conditions here in South Florida. Also my company website below is a very useful resource.

Beth Jenkins
South Florida Brokers
786-374-4778
Web Reference: http://www.arealtyteam.com
2 votes Thank Flag Link Tue Nov 23, 2010
Buying a Short Sale

Buying a short sale is not like buying a property in a traditional way. A short sale may have some risk but it also can be very rewarding. When you are searching for a short sale you will want to make sure you are prepared. Here are some things you will need to consider.

First of all, you need to make sure that you have enough time. It takes anywhere from 30 days to 6 months or even more to get an answer on a short sale. It really depends on many factors. The bank may come back with a counteroffer or reject your offer completely. In some instances you may not even hear back from the bank at all.

Short sales take a long time because the bank has to review it and they are back logged with many short sales and don't have enough coverage to complete them in a timely manner. The bank typically is willing to work with the seller and buyer on short sales to help avoid foreclosure.

One of the benefits of buying a short sale is that the bank is typically willing to accept less money for the property because of the time and risk involved. So you generally are getting the home at below market value.

If you have the time to wait, a short sale is a good way to go. One thing to be sure to ask when purchasing a short sale is, "who is handling it?" Is the Realtor an experienced short sale expert? Or is the listing agent using a Short Sale company that strictly focuses on short sales? By having someone with knowledge and expertise in short sales, it will make the process go much smoother and faster.

Tammy Hayes, Realtor, Sandals Realty, Punta Gorda, FL tammyhayesre@gmail.com
1 vote Thank Flag Link Wed Dec 8, 2010
Danielle:
I agree with all the answers below AND also notice no one has given you even the basics of your answer.

Use this link to see a simple explanation of the basic differences between a short-sale and a foreclosure (REO).

http://www.trulia.com/blog/antonio_vega-pacheco/2009/12/fore…

Tony Vega
Charles Rutenberg Realty
1 vote Thank Flag Link Tue Nov 23, 2010
Hi Danielle,

There is a multitude of information available on line by researching "Short sales & Foreclosures" but the most beneficial insight will come from a local real estate professional, who will be able to put the local RE market spin on it as well as the "Scoop" that you won't find in your research.

Read all you can and then contact a realtor to get started.

Good luck,

Bill
1 vote Thank Flag Link Tue Nov 23, 2010
The main thing you want to ask yourself is
1.) How much time do you have for your property serach, a short sale can take 2-4 months in average

2.) REO or foreclosure - banks respond much faster (2 weeks) but in most cases you need a bigger down payment

3.) A good way to go might be an approved short sale (1-2 months) and the home should be in good conditions.
0 votes Thank Flag Link Sat Dec 11, 2010
Hello Homebuyer,
Ideally, the appraisers are supposed to give their expert opinion as to what they they believe the true market value of a property is.
The problem with the appraisers was the same problems that credit rating companies like Standard and Poor's, Moody's, etc. had when pressured by companies to give AAA ratings to their investments.

If the credit rating companies gave the actual value of the investments then the company's that employed them would take their business elsewhere and find an credit rating company that would give them the AAA rating that they demanded inorder to artificially increase the value of the investments they were trying to sell to investors.

And so with the appraisers -they were paid by the buyer of the property but referred by the mortgage lender, mortgage broker, real estate agent, etc. to appraise the property for at lease the sales price that was on the purchase contract -regardless of the true market value of the property.
The artificially inflated values of properties were directly linked to this relationship between the appraiser and the referring entity.

Thus helping to exacerbate the terrible condition that this country finds itself in.

Has the new legislation produced a better result? There are still major problems that need to be ironed out regarding the appraisers and the credit rating companies but maybe with time...

Shaun Kennard
0 votes Thank Flag Link Wed Dec 8, 2010
Hi Shaun,

It is sad to hear that no one contriols the appraiser anymore. I dont knwo why you think that's the way it should be? If you had a good appraiser friend, it would have been so much easier for you to help me buy my dream house.

As a realtor, you know the market right? You do the comps and complicated stuff like that right? You know which is a great property for me at a great price right? You have your home inspector doing his thing and the mortgage broker who knows the financial stuff to find the right mortgage for me right? And of course, you also have the lawyer to take care of me from legal problems Right?

Why why do we need these snooty appraisers who spoil the whole deal? Really, they should do away with the appraisers and let the realtors do the BPO for the banks.
0 votes Thank Flag Link Mon Dec 6, 2010
Hi Danielle,
Of course I have access to excellent inspectors who actually guarantee their work.
As for appraisers - no one controls the appraisers anymore - which is the way it should be.
Shaun
0 votes Thank Flag Link Mon Dec 6, 2010
1) Not all offers are accepted by lender
2) If you are in a hurry not wise decision most short sales and foreclosures can take up to 90 days to close
3) Short Sales and foreclosures in many instances are very distressed properties require work IN MANY instances less expensive to purchase a move in quality home
4) Resource to study - matter of locating a home works with your specifications and lender requirements

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Mon Dec 6, 2010
Hi Shaun

Do you also have a great appraiser and a home inspector you work with? I always appreciate when a realtor has a complete package of supporting friends to see a sale through. It just takes out those nasty kinks which delay or prevent the closing.

In will keep you in mind for my next purchase.
0 votes Thank Flag Link Mon Dec 6, 2010
Hi Danielle,
A good attorney will know what needs to be done to protect you - In Miami -the attorney who is also the closing agent charges by the transaction -around $350 plus some other fees like $200 for doc prep, etc.
As far as a good mortgage broker -well good luck using the yellow pages. Unfortunately, they are not regulated enough to guarantee that you will not be disappointed -so good mortgage brokers are really few and far between.
I have been working with a mortgage lender for the past 6 years who is excellent. Also, I have a great attorney I can refer you too.
Please call me at 305-510-1115 to discuss.
Sincerely,
Shaun Kennard
0 votes Thank Flag Link Sun Dec 5, 2010
Hi Shaun,

How can a good attorney help anyone in buying a home What exactly would be my questions to the attorney?
How much do they charge per hour or per transaction?


How does on find a "good" mortgage broker in miami? Is there a website such as yellow pages one can use to find a good mortgage broker?

Thank you
0 votes Thank Flag Link Sun Dec 5, 2010
Good question, Belmon. "Education" is the key word and "a good team" working with you. I'm a Realtor for more than 15 years in Miami and I can tell you that the real estate profession is changing every day. Having a good mortgage brokers, lawyers, title companies, lenders, etc around you make the transaccion more easy for all the people involved it. If you are planning to move to Miami we can help you, this is my town, where I live and where I work. Cristina D. Martinez, Realtor, 305-562-7300. Realty World International Gateway. Thank you.
0 votes Thank Flag Link Sun Dec 5, 2010
Hi Danielle,
You need to get yourself a good attorney. No matter how much you educate yourself you will still need the knowledge of a good attorney. What part of NY are you from- I'm also from NY.
Sincerely,
Shaun Kennard
Broker-Owner
Kennard Real Estate Brokerage
11401 SW 81 Road
Pinecrest, Fl 33156
305-510-1115
0 votes Thank Flag Link Tue Nov 30, 2010
Danielle and MS-I,
I agree that doing your homework is always the best policy. And realtors are not meant to give "advice", but to guide the client throught the buying process and protect their intersts. All clients need to do their own due diligence. A realtor can only sell the property that the market can bear, we do not create the market. We have a license that restricts us from giving opinion and advice in many catagories.
The entire world is responsible for what happened in the housing market, I would say the banks and politics are what caused the housing meltdown, realtors wee just in the middle and being as duped by the system as well. People who should not have bought property were allowed to do so. Realtors did not have any power to loosen those regulations, Washington did and they required banks to loosen lending regulations.
I myself had a foreclosure as did many other realtors. We did not want that to happen to us, or any of our clients and l feel terrible about it if any of my clients were hurt. I am lucky and none of my clients that I know of had a foreclosure situation.
We have learned from the situation and now lending is extremely tight. Property is priced accoding to the market value and will not sell if it is overpriced. No one can predict the future but we cannot sit and never buy or sell property again out of fear of what will happen down the road. The market will correct itself, it always does. And
people all still need a place to live!

All the best to Everyone, and let's all just get along and help one another!

Beth Jenkins
South Florida Brokers
786-374-4778
Web Reference: http://www.arealtyteam.com
0 votes Thank Flag Link Tue Nov 30, 2010
Sorry Audra! I did not mean to insult you or anyone. Nothing personal. I think we are seeing the results of bad advise not to mention paying for it. As Beth said - I have a long history of guiding people going way back.... I do not hate realtors I just want them to be honest and responsible. Buyers are real people with real families and they trust the realtor they met hour ago more than their own common sense.

.
0 votes Thank Flag Link Tue Nov 30, 2010
Audra,
If you look at MS-I's history, you will see the continued disrespect on this forum, particularly for realtors. Just ignore him/her.
It is too bad that some do not respect the hard work that realtors do, but that's ok. As long as we do the best job we can and service our clients with respect, that is all that matters. For some, buying real estate is not all about the "investment", (which it was never meant to be) but mroe about the security and comfort of having a home for their family and the security of not having to move constantly.
And much of our job (at least mine) is the rental market. So everyone thinks we are running around making a lot of money, and in fact we make far less than if we worked a regular professional job. But most of us like the business so we stay in it.

Good luck! And ignore the haters:)
Web Reference: http://www.arealtyteam.com
0 votes Thank Flag Link Mon Nov 29, 2010
MS-I - I'm pretty sure your comment about 'high school graduates' could be considered a violation of the community guidelines on Trulia (see below). I worked pretty hard for my degree. Thanks.

"Be respectful and considerate of others at all times

The Trulia community is comprised of many members who may have vastly different experiences and perspectives. Disagreements and debates are acceptable, and even encouraged, so long as the discourse is civil and doesn’t include ad hominem arguments. Insults or belittling comments are not permitted under any circumstances."
0 votes Thank Flag Link Mon Nov 29, 2010
Hello Danielle

Rule no. 1 - Educate yourself
Rule no. 2 - Educate yourself

Rule no. 3 - Do your own research. There are no friends. People work for 3% of purchase price, which is a lot for highschool graduates working 6 hours. We live in world of virtual friends but these friends can cost you a lot.

Good rule of thumb is - year 2000 prices. Good resource - http://gisims2.miamidade.gov/myhome/propmap.asp

Good luck
0 votes Thank Flag Link Mon Nov 29, 2010
Hello Danielle

Rule no. 1 - Educate yourself
Rule no. 2 - Educate yourself

Rule no. 3 - Do your own research. There are no friends. People work for 3% of purchase price, which is a lot for highschool graduates working 6 hours. We live in world of virtual friends but these friends can cost you a lot.

Good rule of thumb is - year 2000 prices. Good resource - http://gisims2.miamidade.gov/myhome/propmap.asp

Good luck
0 votes Thank Flag Link Mon Nov 29, 2010
Hi Danielle

Beth is most correct and I would say has the best answer. If you are going to be financing your best bet is probably to purchase a regular sale or short sale. You may or may not need to rent first. It's probably wise, but if you prefer not to or maybe have family in the area you can stay with, then I would focus my energies on regular sale properties first and short sales as a second option. Short sales will be lengthy wait and foreclosures will be too much competition (unless it's a property which has been on the market a long while, in which case it is probably overpriced).

Best of luck to you!
Audra
0 votes Thank Flag Link Tue Nov 23, 2010
Danielle, the best answer was the one from Maria Carrillo. That's the real truth about short sales and foreclosures. I recommend to you, to offer in foreclosures or normal sales. Take care,

My cellular 305-525-4743
0 votes Thank Flag Link Tue Nov 23, 2010
Danielle, it is true that a large percentage of the market in Miami is REO (stands for "Real Estate Owned" or bank owned property) or Short Sales but there are a lot of homes priced to sell that aren't foreclosures or short sales. Not all REO's and short sales are the best options. There are other things that need to be considered such as areas that you wil be looking to purchase, price range you want to spend, condition of the property, etc. It may seem self serving to say, but you really do need to have a professional real estate agent who knows the current market to assist you with your questions.

Marie J. Montgomery, PA
EWM Realtors
Cell: 305-216-4142
Email: Montgomery.M@ewm.com
0 votes Thank Flag Link Tue Nov 23, 2010
Danielle
You may find the following article "What Every Buyer Should Know About Short Sales" helpful:
http://www.trulia.com/blog/lyle_wolf/2010/08/what_every_buye…
0 votes Thank Flag Link Tue Nov 23, 2010
Danielle,
These answer should help. Here's a bit of information...
Short sales require seller's bank approval and the process could be lengthy. The price is set by the agent and the seller in most cases and the seller's bank will either accept or counter the offer (the seller also has to provide financial documents for their bank to review). Sometimes you'll find "approved" short sales which usually means that there was another buyer that had placed an offer but they did not go through with the purchase.
With foreclosures (REO) you usually receive an answer or a request for highest and best within 7 days. If the property is in good condition and priced low, it may be sold for above asking.
Patience is required with short sales due to the amount of time usually involved and you may need to place offers on several foreclosure properties before one is accepted.
Good luck,
Maria
0 votes Thank Flag Link Tue Nov 23, 2010
The best resource is a competent realtor.
http://www.MiamiShortSaleAdvice.com
http://www.MiamiREOSearch.com (Search for Bank Owned and Foreclosed Properties)
0 votes Thank Flag Link Tue Nov 23, 2010
Beth - thank you so much for your response. Im of the school of thought that knowledge is always key to success! A person should not walk blindly into the Real Estate market, especially with what is going on FL (this is not going on in New York, where I currently live). I need to know about purchasing processes, timings and what to expect when I come down to FL. I need to know whats happening on the pulse of MIA. For example - I am currently under contract with my current home in NYC and have no idea how to plan on timing because everything I see online is either a short sale or a foreclosure. Since my plan is to refrain from being homeless, I am looking for all the guidance I can get. I need to know how long it will take to close on a Short Sale, What does REO stand for, what does it mean when a property is already approved from the bank? Are the prices negotiable...
Best,
Danielle
0 votes Thank Flag Link Tue Nov 23, 2010
Hi Danielle,
I feel that it is not really a process that you can educate yourself on for 2 reasons. First, the rules and the laws change very quickly in this arena and also each circumstance is different.

It is important for us as professionals to keep up with the changes and to know the ins and outs of the market and how the distressed property plays into it. I feel a realtor with a good grasp on the market is your best resource because there is no specific way for you to research any particular market. If you surround yourself with professionals in your search you will have the best advice for your situaion. You may find that a "regular" sale ends up being a better deal for you.

I wish you success with your move and would be glad to assist you with your search.

Beth Jenkins
South Florida Brokers
786-374-4778
Web Reference: http://www.arealtyteam.com
0 votes Thank Flag Link Tue Nov 23, 2010
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