Collier Blog

 Short Sale and is it for you?

Questions many are asking these days and rightfully so. Many homeowners are upside down; many have lost jobs or are making less income than before. Lost of vacant and foreclosure properties littering neighborhoods bringing prices down even more. The media reports almost daily how horrible our housing situation is right? Yes they do from the local papers to The New York Times recent article Foreclosure Filings Jump, and Fall Is Forecast as Peak or the wall street journal’s Home-Price Gains Erased they just about all say the sky is falling or at least home prices.

So you own a home or in some cases we see several and you cannot afford to continue paying the mortgage or mortgages. Should I short sale or just let it foreclose?

Let’s look at options and what the legal experts say shall we?

Option 1 = Foreclosure

Florida Foreclosure can be read at Chapter 702
FORECLOSURE OF MORTGAGES, AGREEMENTS FOR DEEDS, AND STATUTORY LIENS

Now we have been told by attorneys and so have many of our clients, if the bank forecloses the bank can obtain what is called a deficiency judgment. A deficiency judgment states you still owe the deficiency amount on the sale of the property. Let’s say you owed $300,000. on the loan and your property was sold at a court sale for $150,000. guess what?  You still owe the bank the difference or “deficiency” amount plus any reasonable attorney’s fees/court cost to recover such amount from you. This will also appear on your credit report along with the foreclosure. The lender may be allowed to take further legal action such as garnishing wages to pursue payment based on the laws of your state.

It is up to the bank whether they go after you or not!

In my humble opinion if you are a candidate you should speak with an attorney about filing bankruptcy if you really want to consider foreclosure. IF NOT? The Next Option may be best for you!

Option 2 = Short Sale

What is a Short Sale?

Very Simple, A short sale is the sale of a property for less than what is owed on it. The lenders voluntarily accept less than full payment and forgive the unpaid balance. This happens when a property is worth less than what is owed, the owner is insolvent, and can’t make up the difference. In the sale of the property, a lender is paid off with a dollar value short of what it is owed, thus the term short sale.

Now saying the lender forgives the unpaid balance, the lender agrees NOT to pursue the deficient amount. However some lenders may if the home is NOT your primary residence issue a 1099 in the deficient amount or they may not. Recent changes in law, such as the Mortgage Debt Relief Act of 2007, have reduced homeowners’ tax liability.

In a short sale of your primary residence, the Mortgage Debt Relief Act did away with much of the tax consequences. For residences other than your primary, in both a short sale and a foreclosure you could be taxed for the difference in what you owe and what the bank receives as payment. This means the IRS could consider the difference as income, and you could be taxed on that income. You must decide if it is an acceptable risk and that is best decided by speaking with your tax professional, we suggest a tax attorney.

In addition you most often pay nothing out of pocket with a short sale, all real estate commission, taxes, liens; etc came off the banks net!

I hope you can see why I say if you are considering foreclosure in my opinion it is best to speak to an attorney about possible bankruptcy, be advised it is not as easy to file bankruptcy as it was years ago and you may not qualify. If you do not qualify then the short sale may be the best option for you as it is for most.

Short sales can help save your credit as we ask for the bank to report the lien as “settled” as with anything you can ask a credit reporting agency what that will do to your credit. It may drop the score some but it can be easier than a foreclosure to repair and much faster. A bankruptcy can be on your credit for 10 years!

If you are interested in help with a Short Sale contact us or is you want  attorney referrals just complete the form below or e-mail us at info@Collier-Associates.com

** Please Remember I am NOT and Attorney and this is Not legal advice, simply looking at research and what I have been told. Anyone facing foreclosure should get advice from an Attorney to be sure about the law and process. We will be happy to give you some names of Attorneys we have worked with at anytime FREE of charge.

Cary Collier is a Active Florida Real Estate Broker www.Collier-Associates.com

Tuesday, June 24, 2008 12:27:38 PM

A very good question and something many buyers are asking right now. Let me give you a Brokers opinion that has been in the industry for many years.

First you must ask yourself what are your goals and how long do you intend on owning the property?

1. Are you looking to invest and sit/speculate on an area going commercial, redeveloping or developing?
2. Do you want to buy a rental property and have someone else pay down your mortgage and use the depreciation and a tax shelter?
3. Are you looking to live there as your primary residence?

Let’s look at #1, buying as speculative and to sitting on it. Most often this would be land or a home in an area that looks like it may go commercial or what we call redeveloped, redevelopment happens when an area of town that is usually older and has lower priced homes begins to renew and attract people who want higher end or more expensive homes. If you do your homework or hire a great agent who will do your homework for you and really knows how to do so, great idea. You can buy and lease it out so someone is paying down a mortgage or at least the taxes and insurance while you wait. You can also use it as a tax shelter.

Looking at #2, buy rental property and have someone else pay your mortgage down. One of the ultimate ways to create wealth. The trick here is to find a home you can take a mortgage out on and the total payment with taxes and insurance is at or under the monthly rental payment the market will allow in the area. You generally want to look at lower priced homes unless you are looking at vacation areas and then you may be able to get more monthly payments with a seasonal furnished rental. Also look at the areas you are buying in, look at things like SAT scores and is the neighborhood well kept and clean. Also look for counties adding jobs as these are a few factors that may enhance the value of your property down the road.

#3 always a winner. If you are buying for you and know you will live there at least the next 7 to 10 years as the average homeowner lives in a home for 7 years, then with the tax shelter who can go wrong. Rental can be great but unless you sign a long lease, you may be forced to move every year and that can add to the cost of your monthly lease as moving is not cheap, unless you have minimal furniture and boxes you can load yourself in a small truck. Owning your own home, you can change the paint color if you want and much more because it is your home not someone else’s. Not to mention a nasty landlord. They are out there; believe me those who do not care what condition the home is you live in or if it is safe.

Let's look at the market in Florida and many other areas of the country now. Will home prices continue to fall? No one can tell you for sure what will happen as I have seen too many say it will pick up or is picking up only to see a few months later a decline in prices and sales. I will not insult your intelligence or mine, I am not an economist nor do I have a back ground in economics as many real estate brokers do not. I do however know what I hear and see in the market place, due to our lower commission and fees, we list many other real estate agents and brokers’ homes here in Florida and I have the opportunity to hear from them what their market is like.

One thing Florida has going for it is the fact it is a place people want to live and vacation. Florida metropolitan areas dominated the Milken Institute/Greenstreet Partners 2007 Best Performing Cities Index in the article Florida Metros Again Score Well in Best Performing Cities Index; Places Creating Jobs in U.S. Change Due to Tech Rebound, Energy Activity, Trade, Ocala, Orlando-Kissimmee and Naples-Marco Island, ranked at #1, #5 and #6, respectively, were three of the top six cities where America’s jobs are being created and sustained. Ten other Florida metro areas rounded up the top 50. What did we say about looking for areas of job growth? No hurricane has kept people away from a beautiful paradise with white sandy beaches and blue water, just look at the many movie and television stars who own homes here not to mention the fact many Florida cities have more millionaires and billionaires per capita than many other states see this New York Times Article. The fact the dollar has dropped is making property in the US a bargain to those in Europe, the United Kingdom and elsewhere. There has been a slight upward swing in vacation homes sales in the last month or two and quiet a few sales have been all cash. This tells me the Florida market will continue to grow this evidenced by the continued growth between Tampa and Naples. Also with the new international airport being built in Bay county see this article Bay County Airport. Many see the airport bringing new jobs and people to North West Florida due to the lower airfares a larger airport generally can offer as well as lower transportation costs for goods bringing new job growth. The North West Florida area still has some of the most beautiful beaches in the world and that always keeps people coming for more. The west coast of Florida also offers world class fishing and is far less populated and crowed than the east coat of Florida making it the ideal place for growth. Florida has 14 seaports and many think Florida economy may be even more so powered by its ports.

To summarize, now is a great time to buy depending on your circumstance if you are looking to create wealth, a tax shelter or plan on staying put for 7-10 years or more with the interest rates low and a buyers market giving you much more to choose from you may just get that perfect home you have dreamed of. If you are looking to flip those days are gone, unless you can get a home for pennies on the dollar with minimal work needed, forget it. If you are planning to live there only a year or two I would rent as no ne can tell you exactly what is going to happen. My personal opinion is nothing will really change unless the people or Florida get out and vote to amend the save our homes bill see this Florida Tax Watch article on January 29, 2008 and the bill passes thus rolling back property taxes as long as the counties do not raise them so the decrease is negligible or until after the 2008 election for president and that will depend on who wins and what they plan and begin to change. Florida has proven to continue its job growth and e-commerce fro the state which tells me it will continue to prosper and grow.

Hope this helps and remember we have many great buyer agent here to help anyone who wants more information about the perfect dream home or good investment.

By Cary Collier and Florida Real Estate Broker with Collier & Associates Real Estate, LLC. www.Collier-Associates.com/CollierBlog

This is a question many are asking these days. Let's look at some statistics we know I love statistics. I find they really help me make an informed decision. Again the 2006 NAR survey on Buyers and Sellers;

According to the 2006 National Association of REALTORS® Profile of Home Buyers and Sellers, 80% of all homebuyers used the Internet as an information source.

The typical first-home buyer is 32, and has a median income of $57,300. (Source: 2006 National Association of REALTORS® Profile of Home Buyers and Sellers.)

The most popular reason for buying a home is the desire to own a home of their own, desire for a larger home, new job/relocation for a job, change in family situation, desire for a home in a better area, desire to be closer to a job, school, relatives or transit, need for less space, retirement, desire for a vacation home/investment property and purchased home for family member or relative. (Source: 2006 National Association of REALTORS® Profile of Home Buyers and Sellers.)

In 2006, when home buyers were asked about the information sources used in their home search, 85% said real estate agents; 80% responded the Internet, 63% indicated yard signs; 47% said open house, 55% said newspaper advertisement, 8% said friend/neighbor/relatives, 26% said the builder, 34% said home book/magazine, 11% said television, 5% said relocation company. (Source: 2006 National Association of REALTORS® Profile of Home Buyers and Sellers.)

The Active home search time for buyers was 8 weeks of searching and only 9 homes were seen before purchasing their new home.

The top reasons for selecting a real estate agent are agent help find the right home to purchase, help negotiating the terms of sale, help determining what comparable homes were selling for, help with price negotiations, help determining how much buyer can afford to spend on a home, help finding and arranging financing and help finding renters for the buyer's property. (Source: 2006 National Association of REALTORS® Profile of Home Buyers and Sellers.)

Now if we look above we see that the highest percentages in helping a buyer find a home were 85% learned about the home from a real estate agent and 80% responded to the internet lower were the newspaper only 55% and book/magazine only 34%. Other statistics verify this as more and more companies are turning to the internet as their primary means for advertising especially real estate agents.

This tells you one thing for sure- you MUST be on teh internet and really need to be on the MLS if you want to get your home sold! Don't forget it needs to be priced right too.

Another question is why are the numbers so high when it comes to real estate agents and the internet? Simple, people are busy, who has time to drive up and down streets in a neighborhood to find a home? Not many today, people want instant gratification and things made easy also many buyers in today's market may not know the area or values of the homes. The buyers want to make sure they are paying a fair price for the home especially when home prices have fallen some.

Now let's look at another factor, when you are selling your home do you have any sales experience? How many other homes have you sold? Are you comfortable with the disclosures and contracts? Do you understand and know what to include in a contract so you do not end up in a lawsuit? Do you really have the time to answer questions and return phone calls promptly? Remember in most areas of the country today there are between 16-30 months worth of homes available for sale on the market, this means if the number of homes selling today continues and no additional homes were listed for sale it would take 16-30 months for all the homes on the market now to sell, a considerable amount of competition. Another issue is if you are desperate to sell, most often it will show when you are dealing with people, therefore you are actually giving off two messages and yes, I have actually heard this from a buyer recently, first you are saying through your actions and/or the way you speak "I really need to sell this home please make me an offer" and they will either make you a very low offer or will make no offer at all thinking there may be something wrong with your home. The buyer is thinking "wow, why are they so desperate, is there something wrong with the home, if they are this desperate and I see it why has no one else bought the home, maybe we should leave this one alone or make sure we really get a good deal. A real estate agent can be an intermediary, the buyer will never have to deal with the seller therefore will not know if they are desperate or not and most importantly the real estate agent has years of experience in selling homes therefore knows how to answer questions and over come objections as they have the sales experience needed to get the job done.

My answer would be if the reason you are considering selling by owner is to save money, why not use a reduced fee or discount broker to sell your home? In many instances you get the same help like contract & inspection negotiation, buyer qualification and the reduced fee broker will follow everything through until closing plus help you set the right price to get your home or property sold just as any other agent would. They may ask you to keep a flyer box full or if you are out of town will use a 24 hour hotline number to make sure the buyers get the information they want quickly. Plus how many times have you gone by a home listed for sale by a 5, 6 or 7% real estate agent and the flyer box been empty? This is because they can not know when more flyers are needed and few have a set schedule to check their listings. We just saved a couple over $26,000.00 selling a property and we negotiated the contract, pre-pared all the paperwork and are following everything through to closing. Before you list with an agent look into the local reduced fee or discount realtors. You can see our services at www.Collier-Associates.com or the www.HomesByOwner.com sites in the following areas we service note the cities listed are only a few we service the entire county; Pensacola-Milton-Navarre, Destin-Fort Walton Beach-DeFuniak Springs-Seaside-Freeport, Panama City Beach-Lynn Haven-Mexico Beach, Hernando-Pasco-Pinellas-Hillsborough Counties, Sarasota-Bradenton-Parrish, Port Charlotte-Punta Gorda-Englewood-Venice, Fort Myers-Cape Coral-Lehigh Acres-Alva-Estero-Fort Myers Beach-Sanibel-Captiva-Pine Islands, Naples-Marco Island-Everglades City.

If you would like us to recommend a reduced fee /discount broker in another area of the country please send us an e-mail info@Collier-Associates.com

As my mom always said “Don’t step over dollars to pick up pennies!”

60 minutes aired a segment by Lesley Stahl about real estate discounters that really made the traditional agents angry, here are a few thoughts and the story.

Chipping Away At Realtors' Six Percent

Lesley Stahl Reports How Realtors' Commission Fees Are Under Assault

To respond to several comments made by the "Traditional Agent" Deborah Arends, a top RE/MAX agent in Seattle on the 60 minutes segment, from a local Real Estate "Discounter".

Let me preface by saying I have been in Real Estate for over 16 years and over 10 of those in “Traditional” real estate. Don’t get me wrong, there are sellers out there who want the constant contact, who want post cards mailed to the neighborhood. Some sellers want everything down to the plants being watered and need that, this is a seller who needs a “traditional” agent as the "discounters" can get the job done, they will not call constantly and will do many little things including a mailing to the neighborhood for a small fee. Discounters may even have someone go water the plants teh seller will simply have to pay an extra small fee. Most discounters will ask the seller to assist by only keeping flyers in the box, possibly holding an open house and showing the home to buyers not assisted by a realtor. Many discounters even inlcude showing the property in their services to an unrepresented buyer.

As for postcards, we all know the first batches of flyers are pulled by neighbors anyway so I have never seen the point except to advertise the agent more than the property when it comes to sending out postcards to the neighbors. An apartment complex if the home were in a lower price point would be a better idea to me as you could possibly get a renter to buy. If a seller does not need or require those little extras as many times it is really only advertising the agent they should not be foreced to pay for them. If theseller just wants the home sold by the most economical means and if they choose to use a discount/ reduced fee broker they should have the right to do just that, certainly if the buyers have a buyers agent the agent should be compensated with a comparable commission to any other listing based on the services they perform.

One comment in particular being "Sellers need the staging services of traditional realtors” and To move a property, Arends comes up with a strategy, then creates buzz by blanketing neighborhoods with fliers and sending postcards to notify other agents. She also spiffs up a house for viewing. As an accredited "staging" professional, she polishes, re-decorates and de-clutters. "It is the single biggest moneymaking thing a seller can do, because getting their own belongings out will allow buyers to imagine themselves in the home," she explains. Many discounters offer staging advice, it is included in our Premium MLS with Realtor Assistance program, plus we offer to help set a listing price, prepare contracts, assist in negotiations and inspection, make sure buyers are qualified, assist them with a loan and no we are not mortgage brokers we do not do the loan only make sure they have what they need to get the loan done- and follow everything through to closing just as any Traditional Realtor would, discounters simply do it for far less. As for the “buzz” created in the neighborhood, anytime a for sale sign goes up it creates “buzz” in the neighborhood as all the neighbors want to see what it has to offer and how much are they selling for, as stated previously the reason so many flyers go so quickly in the first few weeks- the neighbors get them.

Another quote from Ms. Arends, ""But perhaps they've left quite a bit of money on the table if it had been put in the hands of somebody that really knew the business,", no doubt this comes from the NAR's statistics showing most FSBO's sell for a lower price than had they listed and sold with a Realtor 2006 National Association of REALTORS® Profile of Home Buyers and Sellers . The main reason for this however is FSBO's simply do not advertise their home to a large number of people. See Free Help for FSBO's which includes statistics from the 2006 National Association of Realtors Profile of Home Buyers and Sellers above. Most FSBO's only use a sign and friends and neighbors to get their home sold while 80% of buyers use the internet and 85% use a Realtor. The same reason the internet allows us to buy products for less, more competition and access to more people looking.

There are companies out there who offer a hybrid business plan between a Redfin and the Traditional broker and many times the fees are less than $3000.00 per sale. Companies like www.Collier-Associates.com the local www.HomesByOwner.com affiliate for Pensacola, Destin, Panama City, Tampa Bay, Sarasota, Port Charlotte/ Punta Gorda, Fort Myers/Cape Coral and Naples actually offer FREE staging advice with their discounted programs and more advertising, customer service and follow up in many cases than some traditional agents. We charge only $629.00 plus ½% of the sales price if a buyer purchases the property with no agent- That’s just over  ½% and we write the Contract, Negotiate it and the Inspection, make sure they Buyer is Qualified, Assist with finding a loan and Follow through to closing. As the property is listed in the MLS and MLS rules state the seller must offer a commission to a selling/buyer’s agent the seller offers in addition to our fees just as they do with any discounter or traditional agent a commission of somewhere around 3% to a selling agent. The difference is we discounters do not keep that commission as the traditional agent does if a buyer calls on the home and buys it without an agent. Let’s see that would be a savings of $12,371.00 on a home that sold for $200,000.00*. 

Because of our lower fees we have actually helped sellers "investors" sell and avoid foreclosure because they simply did not have the equity in the homes they just purchased a year or so ago, where had they used a traditional agent they may have paid money at closing due to paying a higher commission.

 In addition, we do show buyers homes and drive them around in our cars- They get to touch, feel and see and yes we have rebate programs available, up to half of our commission in many cases as it simply depends on how much time we spend. Just as any person working, we all want and must be compensated adequately for our time and liability.

Today’s world loves a savings even if they have to do a little extra themselves, this is the reason Lowe’s, Costco, Sam’s Club, BJ’s and many more are in business today and thriving.

Cary Collier / Broker

www.Collier-Associates.com

Collier & Associates Real Estate, LLC

877-406-6333

* Savings based on sales price of $200,000. a traditional commission of 7% and our lower commission of .50% plus $629.00 assuming no co-operating agent involved.

Todays world is changing and the real estate industry is no different. You have many ways to save money and get help selling you home, even FREE help is available to get your home sold. Just like anything else, in order to be successful you must educate yourself. We will give you tips and ways to be successful in selling your home yourself faster and for more money. Let's look at ways to sell and save, Flat Fee MLS Realtors and Reduced Fee Realtors or Discount Realtors or Real Estate Brokers. How are they different and how do you choose which one to use, who has the best service, who offers the most for your money? These are just some of the questions you are probably asking yourself.