Destin Florida Short Sales & Real Estate by Wendy Rulnick

It's that time again!  Bryant Tutas and I are going to be teaching a multi-part short sale class in February.  Stay tuned, and bring on your questions!

Your short sale was approved?  Wonderful.  The buyer’s lender under-appraises the property?  Not so good.  What do you do? 

Do you call the short sale lender and tell them their comps were wrong?  Do you scream "the market is still going down, take the new price or the seller will file bankruptcy"?  Do you say "You’ll never get another buyer for this home”? 

The short sale lender has heard all that before.  Normally, they don’t care.  You’re just another whining real estate agent.  But there is a way to get a value changed if the circumstances are right.  How?  Factual errors.  Here is an example.

I recently had a Fort Walton Beach short sale approved for $117,000.  The house was a bit unusual.  It had a 350 square foot detached apartment.  The main home was 1350 square feet.  The property appraiser’s office considered the home 1700 square feet - the total living area.  Guess what?  That is not what the buyer’s FHA appraiser thought.  He only gave marginal value to the guest quarters, and primarily considered the home 1350 square feet.  Thus, his value was only $99,000. That is 15% less than the contract price and approved short sale amount.  That is all the buyer could get a loan for. The appraisal looked flawless to me.  I knew the BPO agent likely relied on the property appraiser’s total square footage, though, and that is how I planned my challenge.  Here is an excerpt:

Dear Sir or Madame:

1.     FHA/HUD appraisal for this property has found a sizable square footage error that was not reflected in your BPO Value.

2.     Public records states property is 1700 square feet, however, FHA/HUD appraisal measures home at 1350 square feet.

3.    This difference is 350 square footage less than your BPO value and public records.

4.    The actual and correct square footage brings the property value to $99,900 per current FHA/HUD appraisal.

5.    Please consider the revision of your value to $99,900 to coincide with FHA/HUD correct measurements

The short sale lender, Green Tree, submitted my challenge to Fannie Mae.  Two weeks letter they issued a revised approval for $99,000.  The seller was thrilled.  The buyer was ecstatic.

So next time you have a value-related issue on a short sale, and you are confident you are right, do your research.  If you can find a factual error in how you think the BPO was done, you may very well save your sale, and your seller from foreclosure.

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

Fort Walton Beach FL Real Estate

Fort Walton Beach Short Sales & Pre Foreclosure Help.

Read Wendy's Fort Walton Beach Florida Real Estate Blog

Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

If you and your short sale sellers are having problems with Bank of America and Equator (formerly Reotrans), you are not alone.  My team and I have been "experimenting" with the new short sale upload system since we've been forced to start using it two weeks ago. Not only does the short sale agent have to use Equator, so does the short sale seller. The idiosyncrasies of the software can be intimidating-- even to a savvy internet user.  

Passwords don't work, information is wiped out, and files are rejected for reason code: OTHER.

 Today a Destin short sale seller came into my office for help entering his financial information.  We had already uploaded his last two years tax returns, last two months bank statements and last two paystubs by separate pdf.  After entering his information and filling out thirty plus data fields, his information was WIPED out three times by Equator.  WHY?  He hit the back-button!  But did we give up?  No way! After a while, through trial and error, we found some tips to help you along your Bank of America-Equator journey.

Remember to have your seller log onto bankofamerica.com/shortsale (no www).  He should already have his password, after registering at 1-866-677-2516 and having one emailed to him.

There are NO DETAILED INSTRUCTIONS, but these hints will help you to success:

• The system does not accept commas in all numeric fields.  It will kick out entries with commas in the lower section of the seller financial fields, those underneath the income section.  (Some may find it difficult, for example, typing 100000.00 and keeping track of the correct number, but that is what it wants.)
• The seller can only "Save for Later" if they fill out a complete section on the screen, from the BLUE to BLUE (HELP to HELP) area of the form.  Otherwise, the info will be WIPED OUT!
• When totalling numeric fields (like expenses, for example), click OUTSIDE the data entry field to the right of the "total" at the bottom of the column.  Don't try to add up the fields.  This will add them up for you. ( I know it makes no sense).

Finally, if you want CHAT HELP, there is no button. or link on the screen..  I knew there was a CHAT, so I called the Equator Tech Line 310-469-9167. (Expect to be on hold for thirty minutes to three hours).  After finally getting through, and being put on hold for twenty minutes, they came up with this to find CHAT:

Click on the HELP button at the top of the screen.  In the "Search" field, type in the word "CHAT", then an icon will appear.  I am sure you would have figured that out on your own, right?

That's all for today.  For more Equator hints, check back here and on the Short Sale Superstars Equator group.  Until then, happy typing!

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

For Agents: www.ShortSaleSuperstars.com

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

Email Wendy: itswendy@rulnickrealty.com

Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

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Bank of America Approves Destin Short Sale Condo:  Pays Past Dues

Sometimes you get lucky! 

Subject Property:  Destin short sale condo on the harbor

Short Sale Lender:  Bank of America

Mortgage Balance:  $1,200,000.00

Sale Price:  $490,000.00 appr

Seller Cash Contribution: -0-

Seller Promissory Note: -0-

Past Due Association Fees Paid by Bank of America:  $25,235.67

Notes:  I wrote a previous post about short sale condos and association dues becoming the “Next Generation of Junior Liens” because so many homeowners cannot afford to pay them. As this down real estate economy progresses, more and more owners will become delinquent on their condo or association dues. The past-due balances will build to incredible amounts, just like the one I have outlined. The short sales submitted for approval will have greatly reduced payoffs to the mortgage holders when adding in the obligation to pay these dues.

In Florida, if the short sale lender does not agree to pay these costs, there is an argument for the condo association to accept less.  Florida statutes only require a payment to the condo association of the past six months in arrears if the unit is foreclosed, twelve months if it is a homeowners association.  (This is a tip for negotiating Florida short sales.)

In my lucky Destin short sale, we boldly asked for all the past condo dues to be paid- a whopping $25,000!  Bank of America did not blink.  (Rather, the secondary market investor on the loan did not blink.)  Deal approved.  Give it a try.

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

www.ShortSaleSuperstars.com for agents who want to Learn, Know and Grow.

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

Email Wendy: itswendy@rulnickrealty.com

Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

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This townhouse on Durango Road, Holiday Isle in Destin Florida has been approved as a short sale.  It is on a canal on Destin Harbor with a dock.  It needed significant work due to an active water leak.

Lender:  Washington Mutual, now Chase

Mortgage Balance:  $359,000 appr

Sale Price:  $195,000 appr

Approval Time:  5.5 Months

If you need to sell your home as a short sale in Destin or Sandestin, Florida, it is best to hire an experienced short sale agent.

It's Wendy!

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

Destin Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Destin Short Sale Blog

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

Email Wendy: itswendy@rulnickrealty.com

Wendy is a short sale and pre-foreclosure specialist and can help you sell or buy a short sale property in and around Destin Florida and the Emerald Coast.  Wendy has been interviewed by Kiplinger Personal Finance Magazine and Business Week magazine, and has had her short sale articles appear in Florida Realtor Magazine.Call Wendy Rulnick, to list and sell your property on the Emerald Coast of Florida in Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.   

This beautiful home at 610 Adams Drive, Crestview Florida was just approved for short sale by GMAC. 


Mortgage Type:  FHA /HUD

Approved Price:  $115,000

Approval Time:  108 Days

Sales notes:  Since this was an FHA/HUD short sale, special procedures had to be followed.  The seller was required to write a letter explaining why the home was vacant.  FHA short sales typically require the owners to occupy the property.  In addition, because of the HUD short sale guidelines, the approval stated the sellers would receive $1000 upon closing.

Do you need to sell your FHA-insured home as a short sale?  Here is the updated summary of requirements for HUD Short Sales, also called "Pre-Foreclosure" Sales:

1. You must be delinquent 31 days or more at the time of sale.
2. You must list the property with an un-related Licensed Real Estate Broker

3. You must actively market the property for four months (up to six).

   For the first 30 days of marketing, the short sale lender (mortgagee) may only approve offers that will result in a minimum net sale proceeds of 88% of the "as-is" appraised Fair Market Value (FMV). During the next 30 days of marketing, the lender may only approve offers that will result in minimum net sale proceeds of 86% of the "as-is" appraised FMV. For the rest of the marketing time (60 days), the lender may only approve offers that will result in minimum net sale proceeds of 84% of the "as-is" appraised FMV.

4. The property must be an owner-occupied, except for cases of job transfer, death, divorce, job loss
5. There should be written proof of your decrease in income showing inability to pay the mortgage, job loss, etc.
6. HUD will pay up to 1% of buyer's mortgage as part of closing costs if the new mortgage is also FHA, plus reasonable "seller" costs
7. HUD allows 6% Realtor commission
8. HUD will not pay for Home Warranties, points or lender's title insurance
9. You must get approval to participate in the HUD Pre-Foreclosure Sale Program in advance
10. Upon acceptance into the program, you will be given Approval To Participate Form which will outline program restrictions

Here are details of the HUD Short Sale (Pre-Foreclosure) Sale Program.  Remember, these guidelines apply to FHA-insured loans only, and there may be some latitude in those requirements.  These guidelines are subject to change.

HUD Frequently Asked Short Sale Questions

For more information contact the HUD National Servicing Center. Contact me to help you with your short sale.

It's Wendy!

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

Crestview Florida Real Estate

Crestview Short Sales

Read Wendy's Short Sale Blog

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

Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com

Call Wendy Rulnick, to list and sell your home or condo on the Emerald Coast of Florida in Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.   Wendy is a short sale and pre-foreclosure specialist and can help you sell or buy a short sale property in and around Destin Florida and the Emerald Coast.  Wendy has been interviewed by Kiplinger Personal Finance Magazine and Business Week magazine, and has had her short sale articles appear in Florida Realtor Magazine.

This is a first for me. As a short sale listing agent in Destin Florida, I have a parcel of land for sale in a ritzy golf course community.  It is in a newer gated neighborhood where building lots used to fetch over $200,000.  When I took the short sale listing at $90,000, it seemed realistic.  But the lot market near Destin has steadily declined, fluctuating between a 3 and 15 year inventory in the past two years.  That means it would take at least three years to sell out all the lots for sale at the current rate of sales.  A normal market is six to seven months inventory.

After a year and a continued down market, we eventually lowered the price to $23,000.  When I got a contract this week the offer was for $19,000.  The most recent comparable sale, a foreclosure, had commanded a whopping $18,000.  So the offer was fair.

The problem came after I ordered the HUD settlement statement to provide the short sale lender, Federal Trust Bank.  Of course, I had done preliminary title work a year ago, but things had changed, including the price by 75%.  Not only were there past due taxes of $12,000, there were thousands of dollars in unpaid homeowner association fees.  In fact, the closing costs on the HUD would pay zero to the short sale lender, and would require cash to close of several thousand dollars!  You see the closing costs were well over the sale price!

The seller has no money to bring to closing and the buyer will not.  The short sale lender probably won’t pay for the privilege of allowing the short sale to get not a single dollar.

My question is, "What would YOU Do?"

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

Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

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:

• The Negotiator Interview $27.00
  Short Sale Agent Training Webinars 8 Hours of training and materials for $97.00
• Short Sale Listing/Submission Package $27.00 Click for details
• www.ShortSaleSuperstars.com FREE

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

Destin FL Real Estate

Email Wendy: itswendy@rulnickrealty.com

Are you a short sale specialist? Are your hands cramped from using the phone?  Is your neck permanently twisted from being on hold all day? Are you tired of your faxes getting lost, buyers walking and your files being closed?  What is going on?  How can you improve your short sale processing and get an "edge" on success?  Well, we've got a solution for you.

On Saturday, August 29, at 11:00 Eastern, Bryant Tutas and I will be interviewing a working short sale negotiator from a "Top 5" Servicer.  Believe me, this is a big bank that you have likely dealt with, but he has to remain anonymous or he could lose his job .  Friends, we've lassoed a big one for you to answer any short sale questions you've ever had.  Get out your calendars, pen and paper and get ready!

Do you want to know:

What is the best question to ask when you follow up on your short sale?

What are the short sale phone reps looking at on their computer screens?

How are all those faxes separated and imaged in?

What qualifications do short sale negotiators have?

Why do they tell you "No" when it makes sense to you?

Why do they deny your BPO and comps?

Do they care if the buyer is going to "walk"?

What is going on with your package after two months of waiting?

What happens with Fannie Mae files?

What agents get the best treatment and why?

What would the negotiator tell you if they were allowed?

What can you do to mess up your chance of approval?

Why do they cut your commission when they are the junior lien?

How can you get them to reduce the promissory note or cash contribution?

If you want answers to these questions and more, join me and Bryant Tutas when we interview The Negotiator of a "Top 5" Servicer this Saturday, August 29 at 11:00 Eastern. 

It is not necessary to be there live - we will send the recorded MP3 for everyone who signs up.  The cost is a modest $27 to pay him for his time. 

So, get in YOUR questions.  This is real, this is "insider", and this information is going to help YOU! .....  Sign up below!

 

Wendy Rulnick, Broker, Rulnick Realty, Inc. 

www.shortsalesuperstars.com

How many times have I asked agents writing offers on my short sale listings to allow 120 days for lender approval?  I have it in my MLS notes, I tell them by email and by telephone.  And yet, I repeatedly get offers with 45-day approval time lines.  Yesterday I received an offer on a Fort Walton Beach Florida short sale listing with a closing date of November 25 and 45 days for short sale approval…. 

Hmmmm….  I wonder why….?  OH Yeah!  The First Time Home Buyer Tax Credit!  Bingo!  The final day by which a property must close would be November 30, 2009 in order to qualify for up to $8000 in federal tax credits. 

I am very sorry to say, but writing an offer on a short sale now, with about 90 calendar days to go before the tax credit ends is not in the best interest of your buyer, OR your short sale seller.  Bank of America short sales tend to take three-five months for approval….  "Ouch!", you say!  But it is true.  Sure there are exceptions.  Sure, I just had one approved in 28 days.  But--  would I bet someone’s $8000 tax credit on it? 

Would I take my seller’s property off the market for 90 days just to have the buyer “walk” when the deadline is not met, and hurtle my seller three months closer to foreclosure?  Would I take my buyer to the brink of not finding a replacement home in time to qualify for the credit if the short sale does not get approved? Have I considered the new Respa rules that might further delay a closing? No.

If you are working with a buyer now to find a home to close by November 30, please don’t roll  the dice and look at short sales.  Or go in with your eyes wide open,  don’t expect the tax credit, and allow for a reasonable amount of time for short sale lender approval.

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

Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.   Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine".  She and co-founder Bryant Tutas have developed short sale agent training.

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