I am prompted to write, because I just received a cancellation demand from a buyer for a waterfront condo in Destin Florida.  The buyer’s agent emailed me the request for the $3000 deposit to be returned to the buyer.  The contract had allowed 30 more days for bank approval, in this case Countrywide.  Through frequent communication, the buyer’s agent knew written approval was imminent.   When I asked why her buyer was trying to cancel, the agent said, “He is tired of waiting and doesn’t trust the short sale process.”  I told the agent that the short sale approval had just been delivered to my email. and we actually had another 30 days to obtain approval per the contract.  I told her he would probably “own the gulf-front condo within two to three weeks”.  She said “he did not care, he had changed his mind, and it didn’t matter if the seller or I thought he was ‘loony’ or a ‘nut’“.  And…  he still wants his deposit back.

In this case, adequate dates were built into the contract.  There was a $3000 deposit and the buyer had already completed his home inspection.   But he simply “defaulted”.  He accepts no contractual obligation because of his default- he feels he is entitled to his full deposit back.  The buyers stance will not change even after wasting everyone’s time, and putting the sellers on the edge of foreclosure by tying up their condo.

What is the seller’s recourse?  In Florida, title agents often hold earnest monies.  They can only release the deposit when both buyer and seller agree.  In this Destin Florida case, the buyer is requesting the release of escrow funds, but the seller will never agree.  Thus, the money could forever be tied up without further proceedings. It is unfortunate that many buyers can “walk” without fear of recourse, as most Florida short sale sellers have no means to pursue them.

The post Destin Real Estate Buyer Defaults – What is Recourse? first appeared on Rulnick Realty.

The Treasury Department has just announced the incentives for lenders to accept short sales.  Here is the excerpt from the updated Making Home Affordable plan that may help the Destin real estate market and Emerald Coast short sale properties sell better and perhaps faster:

Limiting the Impact of Foreclosure When Modification Doesn’t Work:

Servicers will receive incentives to take alternatives to foreclosures, like short sales or taking of deeds in lieu of foreclosure. For those borrowers unable to maintain homeownership, even under the affordable terms offered, the plan will provide incentives to encourage families and servicers to avoid the costly foreclosure process and minimize the damage that foreclosure imposes on financial institutions, borrowers and communities alike. Servicers will be eligible for a payment of $500 and can make reimbursable payments up to $1000 to extinguish other liens, and borrowers are eligible for a payment of $1500 in relocation expenses in order to effectuate short sales and deeds-in-lieu of foreclosure. Such methods reduce vacancy, neighborhood decline, and overall costs for financial institutions, borrowers, and affected communities alike.

Summary and Analysis:

1. The plan may aid in disposing junior liens by a $1000 reimbursement to first mortgage holders.  This may make it easier to sell short sale properties with more than one mortgage.  There should be a dollar amount that is set to pay second mortage, such as $3000, with adjusted criteria for seller’s financial situation.  If a seller meets certain criteria, they might pay a promissory note or do a cash contribution.  This would help stem rejections by junior lienholders asking for outrageous amounts to release their liens.

2. It adds a very minimal incentive of $500 to offset some of the lenders expenses for approving a short sale.  Add up the 150,000 short sales currently in process at Countrywide, though, that would total $75,000,000. Not bad.

3. The borrower will receive a $1500 in relocation expenses.  $1500 is an overpayment in my estimation and/or unnecessary. Many short sale sellers are already out of their properties, and relocated for new employment purposes.  Or the properties might be investment properties. In  addition, short sale sellers usually have six months to two years “notice” they are moving, and have been “saving” by not making mortgage payments for that time period. The money could be used instead as a “bonus” for short sale lender approval in a timely manner, such as 30 days.  Or added to pay the second.  Or paid to the Realtor.  (Fannie Mae just changed guidelines to allow real estate agents to receive their pre-negotiated commission of 6% or less, instead of cutting it, which is long overdue).

The short sale process is lengthy, and depresses prices beyond the normal economic cycle.  Recognizing and correcting deficiencies in the process will help stabilize the Destin real estate market and decrease the foreclosure rate.

The post Destin Short Sales – Treasury Plan May Help Real Estate Market first appeared on Rulnick Realty.

Dear Senator Martinez,

I am a real estate broker in Destin Florida.  I primarily represent sellers who are in the process of short sales.  As you know, a significant amount of our population has lost jobs and income and are unable to keep up with their mortgage payments or keep their properties. Their best solution is to sell their property as a short sale.  Unfortunately, the sellers’ lenders processing these requests take three to six months and sometimes longer.  During that time, buyers lose interest or must go on to buy other properties.  These long delays are contributing to declines in market value over and above the economic cycle we are in. My suggestion is to REQUIRE those banks getting bailout funds, and all of them, to staff up their short sale departments, so that this inventory can be reduced and home purchase time can be normalized to a standard 30 day period.  By speeding up short sale approvals to normal time frames, there will be one less contributing factor to price declines.  Further, speeding up short sales will reduce the amount of foreclosures in our market.  Foreclosed properties cause surrounding market declines.  In many cases, these short sale lenders reject offers or lose buyers, end up foreclosing, and sell the properties for even LESS than they would have received in a short sale.  If the banks are being granted funds from the citizens, then they have to STOP causing further losses and START helping the taxpayers and property owners. I would be happy to speak with you in more detail, as every day I get calls from homeowners trying to do the right thing, who are prevented from doing so by the very banks we are giving funds to.

Wendy Rulnick

Broker, Rulnick Realty, Inc.

Destin FL 32541

The post Letter to Senator Martinez From Destin Real Estate Broker first appeared on Rulnick Realty.

Since I wrote my last blog post about BANKS CHANGING LOCKS on short sales I have had three more cases of lock changes.  Today it was on an $850,000 home in a secure gated subdivision on 30-A in Santa Rosa Beach, FL.  In fact, just yesterday we received an offer on the property.  The home is currently on a rental program and is regularly and well-maintained.  We found out about the lock change when the seller’s rental company went to change the air conditioner filters today.  There was a note on the door warning that the property had been secured, and NOT to enter.  The deadbolt was changed.  This time the bank was Countrywide who did the dirty work.  Their “property preservation” company would have had to climb over a locked gate to get into the subdivision!  My sign was RIGHT THERE! These cowboys didn’t bother to call.  Nor did they happen to notice the pool fountain as running and the house looked immaculate.  They just CHANGED THE LOCKS.

The number to call they left on the door is just Countrywide’s customer service.  The non-communicative representative had me on hold for 20 minutes, then told me to call another number.  THAT number was just a recording!  This has got to STOP!  How are we going to help the banks by doing THEIR jobs, selling these properties pre-foreclosure, if they put up road blocks?  How many hours do my staff and I have to spend tracking down keys, replacing signs and driving to properties we cannot get in? Not only does it waste our time and money, it COSTS THE BANKS MONEY by paying the property preservation companies for work they SHOULD NOT BE DOING!

Last week I called ASC four days in a row asking for keys to the new lock they changed by GOING PAST MY SIGN!  The house, in Navarre Florida, was maintained, power on, lawn mowed.  ASC’s property preservation department never called me back.  SO my seller changed the locks back himself so we can SELL HIS HOUSE.

THANK YOU BANKS!

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