Florida Real Estate Blog

As a Realtor we have the opportunity each month to work with numerous Lenders and the group we fear working with the most are the monster mega banks as Clark Howard (Radio Talk Show host) calls them. They are the one group of lenders that consistently promise to deliver and 90% of the time they do not.

We are left with a family hoping to move in over the weekend only to find out they have to unpack the rental truck and return it or pay for 3 to 4 more days of rent. The Realtors are running around on the last day of the contract trying to get an extension from the Seller and Buyer so we can stay under contract.

This is very frustrating for the poor Seller who may be planning on buying their next home that same day. Now we have 3 families impacted all because the bank is allowed to misrepresent their ability to provide a mortgage package in a time frame less than 35 days. That is just my rant if you really want to get upset with the banking system go to ClarkHoward.com he has some major blogs about what they are doing with ATM cards and their credit card companies. Please, what ever you do, stay away from those banks. They will only hurt you over time.

They are both part of the Foreclosure process when a family can no longer afford their home. Yet there is a marked difference in the time it may take to successfully purchase the home. So let’s understand the differences.

Short Sale – this is a home that the family still owns and has stopped making payments on. They may still be living in it or they may have moved out and taken appliances and in some cases all the plumbing and electrical fixtures. This home is being sold by the Realtor for the family and the families Lender(mortgage) has to approve this sale as they will be receiving less money than they are owed (that is the reason it is called short sale).

These can take 3 to 4 months to complete and even then you may get to the closing only to find out that some of the documents the family’s lender is requiring them to sign is not agreeable to the family and they walk out of the closing. We have successfully sold and purchased these type homes for our sellers and buyers but do not recommend this opportunity to anyone that has a specific time frame that they need to be in a home.

Bank Owned – is exactly that, it probably was a Short Sale and it did not sell and the bank foreclosed on the property. In this case they can make a decision usually within two weeks and expect to close within 30 days once they accept your offer.

Both of these will expect a “proof of funds letter” from any cash buyer or a Pre Approval for anyone that is going to purchase with a mortgage. They will be selling AS-IS with a right to inspect (to be done within 10 days after acceptance of offer). As neither the seller or the Bank will put any money into repairs that may be needed.

So why go after these properties? They usually are the best priced properties in the neighborhood and they may actually pay up to 3% of your closing costs. They do not however sell at .70 on the dollar (i.e. 30% discount). In Seminole count lately they have been selling within 90% of asking. So a $200,000 home would sell some where between $180,000 and $200,000 and can have a multitude of buyers bidding on it.

This is a light read on this subject, much more can be found by going to Google and type in “Short Sale or Foreclosure”.

This is an IRS credit to a homebuyer it will reduce your tax liability or if you have already filed your tax return you can file an amendment form and they will send you a check for the amount you qualify for. There is a cap on the size of home and your income. Home size is nothing over $800,000 (poor baby). Income is $125,000 single and $225,000 family filing jointly. The credit is actually 10% of your sale price. So a home purchased for $50,000 would only qualify for $5,000 not the $8,000.

First time home buyers credit is a max of $8,000. First time buyer is defined as anyone who has not owned a home in the past 3 years. The $6,500 credit is for a family that has owned their home at least 5 of the last 8 years.

The form you need to file is a 5405 we can supply that to you or you can go to IRS.gov and download your own and preview their FAQ’s that covers this in a lot more detail than a blog allows.

P.S. That long form you had to sign 8 different copies at the time of closing. Yep they want to see one of those( you will find it in the folder the Title Company gave you that day).  Hope you already corrected your drivers license with your new address cause they would like a copy of that.