WHAT IS A SHORT SALE?

Why would someone have to “Short Sale”? It stems from inability to keep and pay the mortgage for a house, condo, townhome or lot for the following reasons: loss of income due to job loss, relocation,  divorce, medical issues, separation from military, military PCS and more.  These homeowners need to sell, yet have a mortgage that is too high, as their properties were purchased when the market was at its highest. Expensive homeowner insurance costs and association fees for condos in Florida add to the difficulty for borrowers to keep up with their payments. These homeowners also have negative equity, i.e. they owe the lender more on the mortgage than the property is worth. When this is the case, and the borrower needs to sell, one solution is a “Short Sale”.

Definition: A “Short Sale” is when the lender agrees to a accept a payoff for less than the remaining mortgage balance to allow the sale of the property. The lender may forgive the entire shortfall as well as pay the seller’s closing costs including the Realtor fee. The loss is either completely written off by the lender, a payment arrangement is made with the borrower (promissory note), or a lump-sum for a potentially lesser amount is agreed to (cash contribution). The short sale lender may also seek the deficiency from the borrower after the sale. Their will be a written short sale approval that specifies terms at the conclusion of the process.

Why Would A Lender Agree to a Short Sale? Banks don’t want to own your Santa Rosa Beach, Fort Walton Beach, Niceville, or Destin real estate. A foreclosure can cost a lender $30,000 to $60,000. If they take the property back in foreclosure (or deed in lieu of foreclosure), they then have to maintain the property, pay for repairs, market the property, pay utilities, then spend money on closing costs. They would rather do a Short Sale- which saves them carrying and legal costs and generally is less expensive for them. Bottom line – with a short sale, you’ve done the work for them!

Need more information? Contact Wendy Rulnick, Broker, Rulnick Realty, Inc.

850-259-0422 itswendy@rulnickrealty.com

The post short Sale Help on the Emerald coast of florida first appeared on Rulnick Realty.

“Dear Wendy,
I want to buy a neighbor’s house in pre-foreclosure. Can I to take just take over his mortgage payments?”

This investor emailed me to ask me how he could go about becoming the owner of the house.  The Destin, Florida area property was not listed for sale, and the buyer had just found the info through public records.

Here’s what I wrote:

If it is pre-foreclosure, the owner is behind in their mortgage payments. Their lender may have offered them a temporary reduced payment plan, or a period to catch up (*called forbearance).  Normally, to assume someone’s loan, that must already be stipulated as a possibility in the person’s mortgage.

It’s not common to have an assumable conventional loan, but it is a possibility for VA or other government loans.  In that case, the new (replacement) borrower would still have to go through the loan qualification process.  I don’t see that as a likely scenario for these owners to get bailed out.

The other option is for you to offer to just buy the property from them. Go directly to the owners and make an offer.  If your offer is enough to cover their mortgage and closing costs, then maybe they would consider it. 

If it’s less than their payoff amount and they want to accept your offer, it would be a “short sale”. Normally a lender won’t take a “short sale” without the real estate being placed for sale in the open market with a licensed real estate broker and exposed so that the lender knows top dollar is being pursued.  The lender may also have an appraisal done.  I am sure there may be some exceptions, but I have never seen that.

Do you have more real estate questions? Do you need to sell because you cannot make your mortgage payments?

Reach out and follow me!

The post Can I take Over Payments to Buy Pre-Foreclosure? first appeared on Rulnick Realty.

I’ve received a sprinkling of new buyer calls looking for Emerald Coast short sales. You know, the typical, “Find me a deal“, “I want a distressed property”, “Do you have any short sales?” etc., without any other criteria. These Emerald Coast short sale buyers ask the same thing they did ten years ago, when the market here was full of short sales. They thought then that they’d get a bargain, and they think that now. You couldn’t really get a bargain then, and now, short sales are practically non-existent.

Let’s start with some background. What is a short sale?  A “Short Sale” is when the lienholder/mortgage holder agrees to accept a payoff for less than the mortgage balance to allow the sale of the property. Otherwise, the property could not sell with an existing lien to a new owner. The lender could forgive the entire shortfall, as well as pay the seller’s closing costs, including the Realtor fee. The loss is either completely written off by the lender, a payment arrangement, which could be in the form of a promissory note, is made with the borrower (their borrower is the seller), or a lump-sum for a potentially lesser amount is agreed to (cash contribution). The short sale lender may also seek the deficiency from the borrower after the sale.

Why weren’t Emerald Coast short sales really “bargains” a few years ago? Lienholders did appraisals on the mortgaged properties to ensure they were not being undersold. They would only accept pay-off proceeds calculated typically as a percentage of appraised value. And believe me, it wasn’t 50% off of appraised value! It could have been 85 – 95% of appraised value. Calculate the wait time and uncertainty of even getting a short sale approved, would-be investors didn’t really make out like they thought they would. (The same is basically true for a foreclosure, give or take).

Nowadays, there aren’t really any Emerald Coast short sales. Why? Equity. If a homeowner is in financial trouble, and needs to sell his property, he could do so without a needing to do a short sale because of equity built up in the real estate. Prices have risen in the Destin, Niceville, Fort Walton Beach and Santa Rosa Beach, Florida areas as much as 40 – 100% in the past three years! The median sale price on the Emerald Coast was $295,000 in April 2020, the median sale price grew to $445,000 in March of 2023.

Now, home price growth is down a bit, to about 1%-4% up from last year (depending again on the micromarket – some areas are higher). So, hypothetically, if the market flattens or even decreases a few more percentage points, only owners who bought at the very height of the market (say a couple of months ago), who have a financial hardship (medical bills, job loss, death of breadwinner, divorce, relocation), could possibly be in a short sale situation because of an equity crunch.

Trends in favor of possibly, (maybe, could be), declining prices on the Emerald Coast are:

• Increased number of properties for sale (up 135% from a year ago)
• Fewer pending sales (down 30%)
• Longer days on market (33 vs. 6 days a year ago)
• Higher interest rates (6.4% vs. 2.75%)
• Month’s inventory has tripled, from 1 month to 3 months (that’s the amount of time it would take to sell all the inventory at the current rate of sales)

There was only one instance in the last year where I spoke with an owner from another part of Florida who was facing negative equity. His property had decreased in value because of a foundation issue. He did not have equity to sell without, in his case, doing a type of short sale called a “VA Compromise Sale“. But that is rare in this market. For now.

Looking forward, I won’t rule out Emerald Coast short sales returning. No one can predict future prices. It doesn’t seem likely, but if so, there probably wouldn’t be many. And if there were, rest assured, dozens of buyers would be scrambling to get a “deal”.

(Do you think you need short sale help?)

The post Where are emerald coast short sales? first appeared on Rulnick Realty.

I am not discussing “strategic short sales”, meaning those who can afford to pay their mortgages but choose to dispose of their property due to negative equity.  I am talking about homeowners or investors who have spent most of their savings or drained their retirement accounts to keep their payments current.  Homeowners in Florida are some of the most affected in the United States. According to the Mortage Bankers Association:   “Twenty-four percent of all mortgages in the country that are in foreclosure are in Florida and 23 percent of the loans in Florida are anywhere from one payment past due to in foreclosure.”

I’ve spoken to Destin Florida investment property owners who are devastated that they might have to stop paying their mortgage, or have already, to save their family’s ability to keep their primary shelter, health and sustenance.  Especially for an older borrower, with even more remote job prospects, the emotional turmoil is great.

I can understand why the majority of homeowners are emotionally affected by deciding to do a short sale.  Many have stellar credit, and have been stable workers their entire lives. They question their self-image when challenging a core tenet of their being.  They feel there is a social stigma to short sale.  It is hard.  The only words of comfort I can give are for them to understand:

1.       You are not alone.

2.       You must decide whether you can continue paying your mortgage and still be able to protect your family’s primary needs.

3.       You must try to think of a short sale as a business decision, not a personal decision.

The most difficult, but helpful hurdle to overcome is removing “personal” from short sale.  Did you know that businesses short sale real estate all the time to keep afloat? Consider this, even the Mortgage Bankers Association, which touts home ownership, sold its own commercial property as a short sale.  And recovery from a short sale can be quick if there is a settlement and credit is good in other respects.

If you are about to fall behind on your mortgage, or already have, take action now and stop the pain.  Call your lender and try to work it out.  Consult with a Florida attorney.  Consider your options.  If you decide to pursue short sale, it may be the solution that allows you to move forward with dignity.

It’s Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

The post The Moral Short Sale Dilemma first appeared on Rulnick Realty.

Amalfi Coast Condo unit B114 in Miramar Beach Florida is now under contract.  The Bank of America short sale unit received an offer within 60 days of listing.  The 1360 square foot, two bedroom unit has bright colors, an open floor plan, and is furnished. Right across the street from the beach, the Amalfi Coast condo grounds have two pools, tennis courts, barbecue grills and covered parking, which make this Miramar Beach property appealing.  There are currently seven Amalfi Coast condos for sale and two have sold since November 2012.  Unit B114 was priced at $210,000 as part of the Bank of America cooperative short sale program (also called the “coop” program).

This Miramar Beach Amalfi Coast short sale condo should be approved for closing within a few weeks.  Read future posts to find out the eventual sale price and short sale story.

Should you sell your Amalfi Coast condo in Miramar Beach Florida?  Try the free short sale calculator for a quick price analysis.

It’s Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com

Miramar Beach Short Sale Help

Wendy Rulnick, Broker, is a short sale and pre-foreclosure specialist and has been featured in “Kiplinger Personal Finance Magazine” and “Florida Realtor Magazine”. She has successfully helped hundreds of families avoid foreclosure through short sale along the Emerald Coast of Florida. Wendy Rulnick is knowledgeable in all aspects of short sale, including VA Compromise Sale, FHA HUD pre-foreclosure sale, HAP military PCS, HAFA, Bank of America Coop program and more.  She is also co-founder of www.ShortSaleSuperstars.com and short sale instructor to agents across the United States. Wendy Rulnick sells real estate in Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Panama City Beach, Eglin AFB, Hurlburt Field.

The post Amalfi Coast Condo, Miramar Beach FL – Short Sale On Way to Sold first appeared on Rulnick Realty.

Grande Pointe Lot 83, short sale, in Inlet Beach, off 30-A in Santa Rosa Beach, Florida, just sold for $90,000. This was a Regions Bank short sale.  WHAT? A short sale in today’s market? It doesn’t happen often, but there are still some cases along the Emerald Coast of Florida where prices have not caught up (yet) to the market as it was in 2005.  There are probably only pockets of instances where this could occur. In the Grande Pointe subdivision, lots were selling for around $350,000 in 2005.  Now they are “skyrocketing” from a low in the $30,000 range in 2012, to over $100,000 today.  The funny thing is, I worked on a short sale for this property back in 2012. At the time, the short sale lender, Regions, would not accept a fair market value offer.  This year, they did.

I’ll copy what I wrote in my original blog post from 2012 here:

Gorgeous building lot in elegant Grande Pointe subdivision in Inlet Beach. You will be enchanted by this neighborhood in Santa Rosa Beach Florida. Impressive entrance, community pool, amenities pavilion with kitchen and community dock. Located on Lake Powell, east of Rosemary Beach, you will be near public beach access and miles of biking trails. Well-located for the South Walton 30-A lifestyle, the Panama City International Airport makes owning here convenient, too. Minimum home size 1450 square feet.  This is a Regions Bank short sale listing.

Grande Point at Inlet Beach, Lot 83, Santa Rosa Beach FL – Offered for $33,900

WHAT!!????????????? Not today. Lots have even doubled from this short sale price of $90,000 -to almost $200,000 each.

If you find yourself in a pre-foreclosure situation in Santa Rosa Beach, Destin, Niceville, Crestview, Fort Walton Beach, Navarre or vicinity, help may be available. Seek legal advice, and contact me to find out if selling your property may be an option.

It’s Wendy… It’s Sold!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call 850-259-0422
Email Wendy: itswendy@rulnickrealty.com

www.shortsales-emeraldcoast.com

Wendy Rulnick, Broker, lists and sells real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Okaloosa Island, Fort Walton Beach, Niceville, Freeport, Bluewater Bay, Navarre, Florida.

The post 30A -Grande Pointe, Santa Rosa Beach Short Sale Approved – Inlet Beach, Florida first appeared on Rulnick Realty.

Some mortgage forbearance stories have a good ending. Wells Fargo, for example, is quick to respond and help borrowers who have trouble paying their mortgage due to Covid-19. In fact, they have one of the most comprehensive websites explaining the types of mortgage assistance they offer. Upon request, they will suspend your mortgage payments for three months, and potentially extend the suspension for three more months. During this time, they will not report the missed payments to credit bureaus, unless you were previously in default.

The terms of repayment of your Wells Fargo mortgage can range from the several options, aligning with the CARES Act, depending your loan type and investor.   Some examples of loan backers, or investors, are government sponsored enterprises (GSE’s) like Fannie Mae, Freddie Mac, VA -Veterans Administration, USDA and HUD.  Here are the options Wells Fargo lists as possible solutions after the forbearance period ends:

1. Lump Sum Payment (if you can) to repay the missed payments at once.
2. Repayment Plan spreading out the missed payments over a few months, as agreed. For example, if you were $4000 behind, instead of paying $1500 per month for your regular mortgage payment, you could pay $400 more, or $1900 per month, for ten months, until the suspended amount of $4000 is re-paid.
3. Loan Modification refinancing the whole mortgage balance to add in the missed payments. For example, if you owe $100,000 and skip $6000 in payments, your new loan would be for $106,000 and perhaps your interest rate would be changed.
4. Mortgage Deferral There are two possibilities with deferral (or deferment). The first option, for example, would be if you skipped three months of payments, your loan term would be extended for three months. So, instead of having 30 months left on your mortgage, you would have 33 months. The second option would be to have the full amount of your skipped payments payble as a lump sum at the end of your loan or when you sell the house.   So, if you skipped $5000 in payments, when you finally pay off your house or sell it, your last payment or payoff amount, would be $5000 higher. Here is a Wells Fargo deferral letter that illustrates the latter:

   Wells Fargo Forebearance Le… by Wendy Rulnick on Scribd

   If you find that you need to sell your Emerald Coast real estate, contact me to discuss your options, whether traditional sale or short sale.

   It’s Wendy… It’s Sold!

   Wendy Rulnick, Broker, Rulnick Realty, Inc.
   Call 850-259-0422
   Email Wendy: itswendy@rulnickrealty.com

   Wendy Rulnick, Broker, sells short sale, pre-foreclosure, REO and traditional real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Florida.

   This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.

The post Wells Fargo Mortgage Help – Forbearance With End of Loan Payment Deferral first appeared on Rulnick Realty.

You lost your job.  You are a Veteran. You cannot make your mortgage payments. You called your lender and their steely “debt collector” tone and threatening letter would scare anyone.

If you experienced loss of income on the Emerald Coast of Florida due to the COVID-19 crisis, the Veteran’s Administration has issued clarifications about how your VA mortgage lender must treat you.  Initially, VA borrowers may have received intimidating letters, such as this:

In fact, this forbearance letter refers to foreclosure twice, as well as short sale, and credit implications. It implies that to catch up, the loan must be brought “current” through a reinstatement (e.g. lump sum payment), or another workout option. This is pretty scary stuff.  The VA, however, has issued Frequently Asked Questions  that should put you at ease regarding your VA mortgage and keeping your home, as specified in the Coronavirus Aid, Relief, and Economic Security – CARES Act:

1. You may skip payments for 180 days and extend to 360 total days should you be economically impacted by Covid-19.
2. Your credit score will not be changed to “delinquent” during this time (unless you were previously in default).
3. You will not have to pay a late penalty, however, interest will accrue.
4. You do not have to make a lump sum payment at the end of your forbearance payment (however, you can if you want to).
5. Your VA mortgage lender may offer to modify your loan to extend the term, adding the missed payment months to the end or your loan (a type of deferment).
6. Your VA mortgage lender may offer to make the missed payments payable in one amount at the end of your mortgage term.  For example, if you missed $10,000 of payments, when you sell your house, the $10,000 amount would be added to your mortgage payoff.
7. You could spread out the missed payments over time with an agreement from your lender.
8. If you don’t recover financially at the end of the help period, you may do a VA Compromise short sale, a regular sale, or a deed-in-lieu of foreclosure.

Bottom line, if you contact your VA mortgage lender for help now during the Covid-19 crisis, they should respect you and your  military service, and work with you, not force you to make a lump sum repayment.

If you decide to sell your Emerald Coast of Florida home, contact me to explore your options, whether by traditional sale or VA Compromise short sale.

Wendy Rulnick,
Broker, Rulnick Realty, Inc.
Call 850-259-0422
Email Wendy: itswendy@rulnickrealty.com

Wendy Rulnick, Broker, sells short sale, pre-foreclosure, REO and traditional real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Florida.

This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.

The post Don’t Let Your VA Mortgage Lender Scare You About Lump Sum Payment first appeared on Rulnick Realty.

What are the predictions for the Destin, Emerald Coast of Florida real estate market? How is the COVID-19 crisis going to affect home sales in the coming months? This I was asked by one of my good clients. Here is what I told him.

February and March home sales were strong, and better than a year ago. However, a major change took place in the Destin-Niceville market after April 1.  That’s when the Florida stay-at-home order was implemented in response to the novel Coronavirus.  All, but essential services, were allowed to stay open in Florida. Home showings decreased on many listings.

Comments from Realtors who lost sales, cited these reasons:

1. Cash buyers lost money in the stock market.
2. Commercial buyers were afraid to invest in a new business.
3. Equity line buyers had their equity lines frozen.
4. Eglin AFB and Hurlburt PCS orders were put on hold.
5. Sellers withdrew listings.

Other observations that may affect the housing market are:

There will be a slowdown in mortgage lending, because big banks are increasing credit score requirements and down payment percentages (700 minimum credit score and 20% down). They have lost liquidity from the many forbearance requests from their current borrowers, but they still have to pay their investors. That will make properties harder to sell, as the buyer pool will be reduced.

Builder confidence is at the lowest level in nine years, per the National Association of Home Builders.

Institutional iBuyer companies who buy homes from individual owners are scaling back or stopping completely to preserve capital.

Fannie Mae predicts U.S. home sales will fall by 15% this year.  They also predict that median house prices will go up slightly.  This could be because inventory levels will decrease.

The SBA Economic Injury Disaster Loan program was changed to reduce grant monies to companies, now capping at $1,000 per employee, up to $10,000, not a full $10,000, as previously stated. This is a blow to companies and their employees.

2.9 million mortgages are in forbearance.

24% of small businesses may close permanently.

Then, there’s unemployment. It’s at the highest level since the Great Depression.

The Emerald Coast is diverse enough to attract multi-million dollar purchasers to Destin and 30-A, and a steady flow of military servicemen and women to Navarre, Fort Walton Beach and Niceville.  The luxury buyer and seller, and Eglin Air Force Base and Hurlburt Field buyers and sellers should be able to prop up their market segments.  And despite national statistics, some local builders are doing well and custom building should continue.

However, small business owners and others whose income has been reduced or eliminated, would cause a slowdown of sales and downward pressure on pricing. Real estate sales on the Florida Panhandle are down by 45%. The next few months will shed more light on how the Emerald Coast will recover.

Wendy Rulnick, Broker
Rulnick Realty, Inc.

direct: 850-259-0422 email: itswendy@rulnickrealty.com

If you are considering selling now or after the COVID-19 crisis, contact me to explore how, whether by traditional or short sale.

The post Predictions for the Destin – Emerald Coast of Florida Housing Market – April 2020 first appeared on Rulnick Realty.

If Bank of America is your mortgage servicer and your ability to make your Destin, Florida mortgage payments has been affected by the COVID-19 crisis, be careful asking them for assistance.  Bank of America, one of the biggest U.S. mortgage servicers, recently changed their home borrower website to reflect choices of either mortgage forbearance or mortgage deferral for those who are struggling and want to avoid foreclosure.  A week ago, Bank of America only offered forbearance on their website. Most people don’t know the difference. Mortgage forbearance is a delaying of payments due. This may be for a period of three months, six months, or even longer.  At the end of the forbearance period, you may have to pay back all your missed payments at once in a lump sum.  (Yikes!)

Mortgage deferment, or deferral, on the other hand, would allow you to add the skipped payments to the end of the loan by extending the loan term, or obtaining a second mortgage that would not be payable until the first mortgage is paid off e.g. when you sell the house. (As of April 1, FHA or HUD backed mortgages will allow mortgage deferment during the Coronavirus crisis). Mortgage deferment is more palatable to many people, because who would suddenly have enough money for three to six months of payments, if they had asked to skip them in the first place?

Take note, however, you won’t automatically get a deferment even if you check the right box on the Bank of America website. They will tell you that if you have a Fannie Mae or certain other government-backed loan, they cannot offer you a deferment. If you choose forbearance, in that case, you may have an option of spreading out the missed payments to re-pay them after the forbearance period ends, modifying your entire mortgage to include those payments, or paying the full amount in a lump sum, as specified in the CARES Act.

After you request mortgage assistance online, Bank of America will send you a follow-up email and mail you one or two letters.  The first, a forbearance letter, and the second, a letter offering you a dedicated mortgage specialist to discuss your situation.  (Obviously, they have not refined their system yet.) If you are not sure how to proceed, keep following up with them, as the mortgage assistance programs are changing regularly.

Here is a copy of a Bank of America forbearance letter.

If you find that during or after the COVID-19 crisis, you must sell your Emerald Coast real estate, consider your options. Contact me to explore whether it’s realistic and how you may accomplish it, whether by short sale or traditional sale.

It’s Wendy… It’s Sold!

Wendy Rulnick, Broker, Rulnick Realty, Inc.
Call 850-259-0422
Email Wendy: itswendy@rulnickrealty.com

Wendy Rulnick, Broker, sells traditional and short sale real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Florida.

The post Bank of America Offers Mortgage Forbearance – Not Deferral first appeared on Rulnick Realty.