As a Short Sale Real Estate specialist in Sarasota, Florida with Keller Williams Realty, I recently received a call from a condominium association that had numerous units in their complex delinquent in their association dues. They recently foreclosed on one of the units and now had legal ownership of the unit. The association called me to discuss what they could do with the unit they had just acquired.
My question to the board member of the association was, "Why did you foreclose on the unit?"
His response was that they had to because the owner was not paying their condominium dues. As a result the condominium association now owned a unit, which had an existing first mortgage on it that was substantially higher than the property was worth, they incurred extensive legal fees, and also had the obligation to maintain a unit in their complex that was still facing foreclosure from the first mortgage. In conclusion, the unit was going to be taken away from them through foreclosure of the first mortgage.
Upon hearing this, I explained a potential solution which works for homeowners facing foreclosure, that could have the following benefits to their association:
1. Reduction in their legal expense in collections (as foreclosure is not always the best answer, if there is nothing to collect).
2. The ability to recapture delinquent fees owed to their association in a faster time frame (selling Short Sale would recapture their fees quicker).
3. A way to handle collections in a proactive-approach and in a harmonious way (these are your neighbors; is a lawsuit the best answer?).
4. A plan to limit the future number of foreclosures in their community, which would have a better impact on property values in their neighborhood (Short Sale can accomplish this).
How could this be done? Establish a relationship with a Short Sale Real Estate Agent who could act as a reconciler for residents in the community who are falling behind on their payments, by encouraging them with information on the benefits of a Short Sale.
Here is an initial letter, that I proposed to send, which could go out to homeowners in an association:
Dear (Condominium Name) Homeowner,
Given the current economic environment, we have many homeowners who have fallen behind on their association dues. If you are in this unfortunate situation, our goal is to work with you in a pro-active, Win-Win approach.
As property values have declined over 50% in the past few years, it is not uncommon for many property owners in (Condominium Name) to believe that walking away from their property is the right answer. However, walking away has unfortunate consequences, not only to our community but to you as well, with the possibility of a Deficiency Judgment imposed by your mortgage lender upon you.
There is a solution that can prevent your property from going into foreclosure, limit the damage to your credit, potentially eliminate a deficiency judgment, and may put you in a situation where you could secure new financing on another property within 2 years. This solution is known as Short Sale. A Short Sale is a process where your lender reduces the amount owed on your property in order to facilitate the sale of your property. In many cases your lender will pay all of the closing costs, including your association dues, real estate commission, and all related costs of the sale. For more information on a Short Sale, visit: www.TroyFunk.com
Troy Funk is a Short Sale Real Estate Agent with Keller Williams Realty and has closed over 100 bank-negotiated sales in the Manatee and Sarasota areas in less than a year. He recently spoke with Judge Lee Haworth at a public service event and is available for a FREE consultation. Troy Funk can be reached at 941-445-9999. Of course it may be prudent to interview several real estate agents if you are considering selling your property, speaking with a qualified CPA on accounting issues, and an attorney on legal matters.
Our intention for this notification is to extend an offer to help you.
Sincerely,
In closing, working with a Short Sale Real Estate agent to help a homeowner in distress could be a better solution for a Homeowners' Association than foreclosing. For more information on Short Sales, contact Troy Funk at Keller Williams Realty at 941-365-8769 or visit his website at: www.TroyFunk.com
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