Here in the Fort Myers/Cape Coral area, the number of foreclosures continues to climb. In one zip code alone over 7500 mortages were in default just a couple of weeks ago! Most of the problem stems from"adjustable mortgages" that have adjusted beyond the mortgagor's ability to pay.
Whatever the reason a homeowner is in default, in a very short time, the bank that holds that mortgage will begin the foreclosure process, a most unpleasant and stresssful event for all concerned. It usually takes about six months for the whole processs to be completed, i.e. for the bank to take possession of the house.
If you find yourself in this position you are certanly not alone!! Her are some things you can do to work things out. Call yur bank as soon as you know you are gong to default, explain your circumstances and try to restructure the loan. Perhaps you have relatives that can help you over a rough spot. If you can't find help these ways, the last line of defense is a short sale.
A Short Sale works like this. You sign a listing agreement with a reputable real estate agent and market your house as if you are selling it. It will be listed in the MLS, will have a lockbox on the door so agents from all agenies can show it. It will have a sign out front. The difference is that your agent is going to ask for a price just below the lowest comparable in your neighborhood. Usually, this means the asking price is less than what you actually owe...thus the "short sale."
Now comes the tricky part and the reason you need an agent wth plenty of experience with short sales...you get an offer!
Now your agent has to negotiate with the bank...and banks are notoriously dificcult to deal with. Getting a bank to accept an offer on a short sale is a tedious and frustrating process that may take months to complete and it is impotant that you understand that there is no guarantee that any offer will ever be acccepted. Fortunately, all that work with the bank is done by us, the realtor, not you. And, as the number of defaults grow, banks are more and more willing to accept short sale offers.
Once an offer is acceptd you are off the hook You no longer owe any money on the property. It used to be common for banks to send out 1099's whowing that you are liable for the tax on the balance between the short sale price and what you actually owe. With new legislation in congress this cannot happen if your home is homesteaded. It istill a very good idea to consult with a tax accountant in regards to tax implicaations or lack threfof.
HERE'S WHY A SHORT SALE IS BETTER FOR YOU!! Foreclosure stays on your credit record for a full ten years, making it virtually impossible for you to buy any kind of real estate for that full period. Banks often deal with bankrupts after a few years if their credit improves and may deal with owners who have "short sales" in the same way. How soon you will be able to buy again depends on many factors includng income and assests and your credit in other matters.
At FLORIDA FUTURE REALTY,we have extensive experience dealing with all aspects of the short sale. You can count on us to treat you with the compassion you deserve and to handle all aspects of the Short Sale with efficiency and integrity.
Leslie Barad, Realtor
239-877-1139
FLORIDA FUTURE REALTY, INC.
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