Five Florida Short Sale Facts and Myths in Palm Beach Gardens Florida

by Rodney Forbes on September 29, 2012

West Palm Beach Short Sale Realtor

For majority of short sale sellers and buyers, this information is common knowledge. However, what is not very secret in Palm Beach Gardens Florida are the details involved from the contract to the closing of the short sale. There are actually multiple stages involved in the Florida short sale process that may cause more misconceptions and confusion without the guide of competent short sale specialists. Let us examine the top five short sale myths.

MYTH 1: Getting short sale approval is typical, normal, or standard.

Homeowners believe that due to government streamlining, the set of standards allow banks to follow a specific process for short sale initiatives. The typical process, in Palm Beach Gardens Fl, understood by buyers and sellers is that offers are submitted, signed, and handed over to the listing agent who turns all documentation to the bank. After a few months, or in rare occasions a few weeks, approval is received.

FACT: There is nothing typical, normal, or standard when it comes to a short sale.

A bank is generally in a authority position and may respond to offers of the homeowner in the manner they want. There is an apparent possibility that they may counter with a higher offer or demand some form of cash payment from sellers. It is also possible that none of these will come to pass. An asking price in Palm Beach Gardens, that is way below the standard, can be approved unexpectedly or insist on an above board pricing. This means there is no standard with short sale initiatives. This also highlights the need to have the services of short sales specialists.

MYTH 2: The broker and offer of the buyer affects the approval of the short sale.

Homeowners believe that since banks and investors are more worried with profits more than anything else, having a buyer in Palm Beach Gardens with a broker that is knowledgeable in short sale and provides a more than adequate pricing offer, the short sale initiative will be immediately approved.

FACT: Despite the truth that banks and investors look at profits, much value is given to writing a clean and well-qualified offer.

West Palm Beach Short Sale RealtorThis is important in making sure that the seller and the buyer hang onto the initiative until the contract is signed. It is important to note that the offer and the agent of the buyer in Palm Beach Gardens have very little to do with how the bank will approve the initiative from the bank based on their needs to close the short sale. This is the reason why this is classified as one of the five short sale myths.

Even though there is no denying that offer pricing in Palm Beach Gardens has significant weight, it is not that important when it comes to short sale initiatives where the following factors have substantial bearing:

• Fair market value of the property based on third-party broker’s opinion in Palm Beach Gardens or automated computer model.
• Financial condition of the seller or potential future challenges.
• Completion of the workout short sale package of the seller along with the constant follow-up done by the local real estate agent to close the transaction.
MYTH 3: Banks have limitations on what they can do.

Majority of homeowners without the benefit of Florida short sale specialists in Palm Beach Gardens believe that banks are limited by government requirements and regulations in dealing with short sale initiatives. Additionally, they feel that the operating standards add to the imposition of the limitations which can be detrimental to their condition.

FACT: As one of the common five short sale myths, it contributes to the negativism and limited options of homeowners. The truth of the matter is that a short sale initiative in Palm Beach Gardens is merely a proposal to waive a debt that is legally owed by financially challenged homeowners.

This means that since the bank is the legal lender, it has the absolute right on what can be done including outright refusal of the request in Palm Beach Gardens for debt forgiveness. This means that if they have the right to refuse, then they also have the right to impose whatever conditions they want on the initiative.

Experienced Florida Short Sale Realtors know that it is entirely possible for the bank to demand more money from the seller or even the buyer. In the same manner that they can ask real estate agents to lower their commissions and even refuse payment of closing costs. The buyer and the seller in Palm Beach Gardens may also refuse or accept any or all of the demands of the bank, but, it is important to remember that the bank has absolute control of the rules of the game.

MYTH 4: Homeowners will benefit more by walking away in Palm Beach Gardens instead of short sell initiatives.

Normally, homeowners get the advice from inexperienced real estate agents or incompetent real estate companies to simply walk away instead of going through the tedious process of a short sale initiative in Palm Beach Gardens. Supposedly, this will give them more benefits not only financially, but also in terms of credit scores.

FACT: For majority of homeowners who are faced with upside down properties in Palm Beach Gardens, walking away and allowing foreclosure proceedings is tantamount to an extremely serious decision.

West Palm Beach Short Sale RealtorThe foundation of the decision can dramatically vary depending on the owner and the state where the property is located. In some states homeowners can be sued by lenders when the mortgage comes into default. State taxes may also be imposed on the debt that has been cancelled due to foreclosure, which can reach tens of thousands of dollars.

The key to dealing with one of the five short sale myths is to have the backing of real estate companies such as the Short Sale Specialist Network which can help homeowners get in touch with experienced local real estate agents. This will help financially challenged homeowners to be less impaired by short sale initiatives compared to foreclosure. This kind of support will also help distraught homeowners in Palm Beach Gardens to recover their credit rating faster including the functionality of getting another mortgage in a shorter time. A short sale also costs the seller almost nothing aside from the investment in time and effort, which makes it the smarter choice than simply walking away.

MYTH 5: A Florida Short sale is synonymous to pre-foreclosure.

With the varying standards implemented by banks, especially with some enforcing time limits for the short sale prior to initiating a full foreclosure in Palm Beach Gardens, many homeowners believe that a short sale initiative is similar to going through a pre-foreclosure proceeding.

FACT: Basically, in a short sale, homes are being sold for lesser their value in order to settle outstanding obligations to the lender.

This is one of the five short sale myths that need further clarification. Pre-foreclosure on the other hand involves homes that are being prepared for foreclosure due to mortgage payment delays. The Fact is that some short sale initiatives in Palm Beach Gardens are pre-foreclosures simply because homeowners decide on stopping mortgage payments once the property is placed on the market. Typically this happens because the homeowner no longer can afford to make payments, doesn’t see any significance in pursuing the payments, or because they have the wrong notion that the bank will approve the short sale more rapidly once the loan comes into default. This kind of decision making process highlights the need for the services of Short Sale Specialist Network which can help homeowners make educated decisions.

West Palm Beach Short Sale RealtorThe five short sale myths constitute the basic foundation of how homeowners react to various short sale conditions as well as why they opt to walk away or foreclose. By understanding the five short sale myths and getting the services of short sale specialists, homeowners will be able to maximize the benefits of their current condition in Palm Beach Gardens Florida! When it comes to your financial future and choosing someone to assist you in the short sale process, experience is everything. Demand the best. Contact us to be connected to a local short sale Realtor to offer no cost short sale services and guidance through the process.

Rodney Forbes is a Realtor® and registered broker with Forbes Realty of South Florida, based in West Palm Beach Florida. Rodney and his team work in Palm Beach, Broward, Martin and St. Lucie Counties. As a recognized expert on short sales, Rodney has been featured on radio and national web conferences for agents. Rodney has also authored the book “Should I Short Sale My Home?”

Forbes Realty of South Florida also specializes in REO asset disposition. Rodney works with several banks and asset managers in the Palm Beach County area. Rodney is the main author for the popular real estate blog South Florida Real Estate Report. You can find a wealth of information regarding bank foreclosures, short sales, real estate news and local real estate trends.

For more information, please call Rodney at 561-337-4810 or email Rodney@ForbesRealtyOnline.com

 

Leave a Comment

Previous post:

Next post: