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 have a CASH buyer for your short sale listing! He can close immediately.”

OK, then what are you expecting from me?  And the short sale lender?  Do you realize that a CASH offer makes NO DIFFERENCE to the short sale lender?  Do you know where your offer goes? To the bottom on the pile.  (With the 20,000 other offers in queue.)  Bank of America does not put your offer in a special pile, marked “CASH- look at these first”.  Wells Fargo does not set aside all the other offers to look at the financing terms of yours.  Citi does not expedite your cash offer for approval.

What DO the short sale lenders care about?  They care about Line 504 of the HUD, “Payoff of First Mortgage”.  That tells them what they are going to NET after their expenses.  It does not matter if the buyer wires the funds out of his own account (cash) or the buyer’s mortgage lender wires the funds to closing.  It all becomes CASH.

Sure, if you were selling a traditional listing, that is not a short sale, “cash” might make a difference. A traditional seller might discount for the lower-risk buyer and quicker closing.  But a short sale listing is a loss to the lender.  They don’t care how you get your money.  What they will want to see, in any case, is proof of funds or a mortgage pre-approval.

It may not be fair to the cash buyer to have to wait like the rest of the short sale offers, but it is reality.  So next time you tell me your offer is “CASH”, and I don’t get too excited, don’t take it personally.

It’s Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Wendy’s Destin Real Estate Blog

The post So, You Have A “Cash” Offer for My Short Sale Listing? first appeared on Rulnick Realty.

After this last week of trying to help short sale sellers unload their upside-down properties, I’ve experienced a whole range of assistance.  Or not.

1. Seller will not return four phone calls and two emails asking if they can do a $1000 cash contribution to dispose of a $150,000 mortgage.  Not even an acknowledgment.

2.  Seller will not upload info into Equator, after being under contract for four weeks

3.  Seller finally faxes listing agreement and short sale documents to us sent to him six weeks ago.

4.  Seller has not sent us the last two paystubs, after being under contract a month

5.  Seller contacts us with a foreclosure sale date in five weeks, has never even listed the house

6.  Seller, who is an attorney, finally faxes us listing paperwork one week before foreclosure.  Too late.

And it goes on.  In return, these sellers expect from their short sale listing agent:

1.       Sell their house—quick!

2.       Take care of all their lender requests

3.       Call their lender and stay on hold for hours a day, every day

4.       Repeatedly fax hundreds of documents on their behalf

5.       Keep the buyers waiting for six months

6.       Negotiate the best terms for a short sale approval

7.       Call and email them to continually ask for cooperation

Sellers – if you are serious about doing a short sale instead of a foreclosure, be prepared to do some work on your own behalf.  Your work will include gathering all requested financial documents in a timely manner.  (Timely manner means with a few days, not weeks. ) This will include gathering bank statements, pay stubs, profit and loss statements, tax returns and more.  This may also include filling out your specific bank’s forms.  You may have to do this multiple times. 

Consider paying $1000 or more on your own behalf to dispose of $100,000 or more debt.  Consider paying a promissory note of $5000 over several years at no interest, to do the same. Be honest.  Roll up your sleeves.  Return your real estate agent’s phone calls.  Participate.  Avoid foreclosure.  Get your short sale approved. 

It may not be convenient, but it’s your credit, and your financial future.  Take responsibility for it.

It’s Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

www.ShortSaleSuperstars.com  for agents.

The post Short Sale Sellers – If You Want to Avoid Foreclosure – “You” Must Participate first appeared on Rulnick Realty.

There are “magical” numbers floating around the internet that short sales sell for 82% of list price, or 80% of market value, or 85%.  You get the picture.  I can tell you right now- except for certain HUD and other short sales, there is no standard “percent off” that will guarantee you can buy that property for x amount off.  I can tell you this- what mostly works is…. drum roll…  market value (or pretty darn close!)

Remember, each short sale, whether it is serviced by Bank of America or Wells Fargo or Chase, likely has a different secondary market investor.  The secondary market investor, for example, Merrill Lynch, Bank of New York, etc., for the particular mortgage loan,  will have different criteria for what it desires to agree to a short sale.  There is no “one size fits all”.

Don’t forget to take into account that the investor does not just look at the contract price.  They look at what they will net at closing.  So after paying some closing costs, such as real estate commission, state conveyance tax, doc stamps on deed, tax prorations and past due homeowners association dues, the investor might only net $300,000 on that $350,000 offer.  Are you getting the picture?  In addition, if they do use a standard “percent off” calculation for certain short sales, they are not going to use the list price.  They are going to use their independent appraised value- which might be higher than the list price.

So if you are going to offer an amount substantially lower than market value for a short sale, be prepared.  You’re either going to end up paying closer to market value or you’re not going to get the home.

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

www.ShortSaleSuperstars.com for real estate agents

Read Wendy’s Destin Real Estate Blog

The post I’ll Take That Destin Short Sale for 20% Off! first appeared on Rulnick Realty.

A homeowner recently emailed me quite concerned about a letter she received from Aurora Loan Services.  She had a second mortgage with them for $29,700 at 12% interest.  She had never been late with her payments and was not selling as a short sale.  The Aurora letter stated she could pay her loan off now at about one-third what was owed, and would have no further obligation on the note! 

Dear Customer:

Aurora Loan Services, as a servicer of your loan, has been authorized by the owner of your second mortgage to offer an opportunity to pay off your loan at a reduced amount.

Upon receipt of the reduced payoff funds in the amount of $10,400, your loan will be considered paid in full. Aurora Loan Services will report your account paid in full to the applicable credit reporting agencies and send the necessary documentation to release the second lien from the public records.

If you elect tp participate in this special payoff offer, Aurora Loan Services will file an IRS 1099-C Form for the amount of debt forgiveness.

Please be advised that certified funds (in the form of a cashier’s check or money order) must be received by Aurora Loan Services no later than the close of business on January 29, 2010. If the funds are not received by this date, the offer made in this letter will be rescinded and considered null and void.

Certified payoff proceeds must be made payable to and remitted directly to Aurora Loan Services. If you have any questions, please contact one of our representatives by calling 866-459-3059

Is this offer for real?  Apparently so, as the borrower called Aurora Loan Services and confirmed it. They said they were doing it “to help people” and their phones were “ringing off the hook”.   And what a deal –  even with tax consequences, it seems to make sense to pay $10,400 and save almost $20,000 in cancelled debt and interest payments! I advised the borrower to consult with an attorney, as she questioned sending in a cashiers check with only the letter to prove her mortgage would be paid in full. 

Why is Aurora really doing this? Perhaps the investor on this loan is looking for some quick capital to cover losses? If you have any similar experiences with Auorora Loan Services, report it here.

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Wendy’s Destin Real Estate Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

The post Aurora Loan Services Offer- Too Good To Be True? first appeared on Rulnick Realty.

Ring ring ring ring.  Thank you for calling Short Sale.  For priority service, please enter your 10-digit account number followed by the pound sign.

Please enter the last four digits of your social security number followed by the pound sign.

4306#

That number is not found.  One moment please.

“Hello.  This is Loss Mitigation, what is your account number?”

88302720572

“Thank you, and your name?”

Wendy Rulnick, listing broker – authorized.

“Let me find your authorization…  OK, I have it.  The borrower’s name?”

Joe Miles III

“Mailing address?”

12 Kemp Court, Onedon, IL 34003

“Thank you.  We have on file a home telephone of 307-368-7110.”

I don’t have that number.

“We also have 307-993-0204.  Do you have that?”

No, the only number I have that I know you have is 833-293-6624.

“The homeowner needs to call in and update his records.”

He has already done that, yet every time I call I am given the wrong phone numbers.

“Thank you.  The property address?”

20 Holmes St., Destin Florida 32541

“What are the last four of the social?”

4306

“The buyer’s name?”

Cecil Bedwell

“Thank you.  How may I help you?”

I am calling for the status of the short sale.

“We have no further information on the file.  Is there anything else I may help you with?”

No, thank you, have a great day!

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Wendy’s Destin Real Estate Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

The post This Is The Short Sale Department, How May I Help You? first appeared on Rulnick Realty.

Karla Leahy started an interesting discussion on www.ShortSaleSuperstars.com.  She asked “Do you inform the short sale lender when you no longer have an offer?”

From what I’ve seen the thought process behind not divulging the buyer walked is:

1. The lender will complete an appraisal or BPO that will speed up the next approval

2. The seller’s pre-qualification may be completed and ready for the next attempt

3.  With some lenders, you can sneak in a substitute buyer

Bottom line, it “saves time” for the next buyer, the one you hope closes.

BUT–  IS IT RIGHT TO NOT DISCLOSE THE BUYER WALKED?  Why should the short sale system be clogged because you are trying to speed up your next offer?  Is it right to allow the lender to continue to work on an approval when there is no longer a contract? Sometimes there is another twist on trying to speed up an approval.  “Fake” or “starter” offers are sent in to the lenders to get an appraisal ordered, when the “buyer” has no intention of closing.  The “buyer” might even be the real estate agent.

Some of the lenders have a few hundred thousand offers in process. HOW MANY ARE LEGITIMATE OFFERS?  The “real” buyers (and the sellers) suffer through longer wait times because others have tried to game the system, “dead” deals are being processed or offers with no hope for approval have been submitted.  If lenders were only processing contracts that could actually close, all short sales would be speeded up, right?

So, I ask “Would YOU call the short sale lender and tell them to stop working on the sale if your buyer walked?” 

 It’s Wendy!

Available Short Sale Agent Training:

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Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

Destin Short Sales

The post Do You Tell The Short Sale Lender “Buyer Walked”? first appeared on Rulnick Realty.

The June 2009 issue of Florida Realtor Magazine references Wendy Rulnick, Destin FL Broker/Realtor of Rulnick Realty. Rulnick’s article “22 Questions to Ask the Short Sale Lender” is called “impressive” and will help “ensure your transaction goes smoothly”.

The post Destin Broker, Wendy Rulnick, in Florida Realtor Magazine re: Short Sales first appeared on Rulnick Realty.

I have a home listed for short sale in Fort Walton Beach, Florida.  The property was a primary residence, and the seller lost his job and relocated to another state to find work.  He is also in the midst of divorce proceedings.  During the listing period the seller was advised by his attorney to file for bankruptcy.  Subsequently, we received an offer for the property.  During the time period, the seller was unclear about the status of his property.

I called Citi, the short sale lender, to find out if they would entertain a contract even though the seller was going to file for bankruptcy.  Citi said, “Yes”, we could proceed, and he could still sell his property. Citi assigned the file to a negotiator, ordered the BPO, and requested further documents from my seller.

A few weeks later, Citi abruptly emailed me and said they could not take further action, as the house was now part of the bankruptcy proceeding.  I found it odd that initially Citi said to “go forward” with the short sale, then several weeks later mysteriously said they could not help.  I made numerous phone calls through the Citi phone loop, and finally got a department who told me that they needed an “order by the bankruptcy court” stating they could proceed.  So, I called my seller who called his attorney.  The attorney provided the contact information for the court-appointed Bankruptcy Trustee. 

I called the trustee, who was a magnificent help.  He said that since the property had no equity, the court did not want it- there was nothing to divvy up amongst the creditors.  He said that after the bankruptcy the property would go back to my seller, anyway, and he would be happy to help me and release it now.  So he is sending me paperwork to proceed with “Abandonment”of the property from the bankruptcy court.  If there is no objection to the abandonment within 15 days, the property will be free to short sell. Otherwise when case closes it will be deemed abandoned by law, anyway, and go back to my seller.  The trustee also mentioned that Citi could have asked for “abandonment” to continue foreclosure, and had started to do so, but had “dropped the ball”.  Perhaps that is why Citi initially started the short sale, then stopped in the middle. 

The happy ending is that the young lady who has been waiting to purchase her new home will likely be rewarded for her patience, and my seller will have prevented a foreclosure.

It’s Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Fort Walton Beach FL Real Estate

Fort Walton Beach Short Sales & Pre Foreclosure Help.

Read Fort Walton Beach Real Estate Blog

The post Bankruptcy and Short Sales: Case Study first appeared on Rulnick Realty.