Miami Condo Short Sale Contract Tip #9

Short sales of Miami condos and homes are often a great way for a buyer to get an excellent deal on a property and a seller to get out from under an upside down mortgage with hopefully less damage to credit and his or her pocketbook.  This is the ninth and last of as many blog entries, in no particular order, each with a tip for the buyer or seller or both, to help make sure the deal goes smoothly while giving protection to one or both parties.

Miami Condo Short Sale Tip #9:

Short Sale Approved–Now What?  FOLLOW THE LENDER’S INSTRUCTIONS!  Immediately inform the buyer so they can prepare to close, or finalize the financing on the property.  If the approval came in with a net payoff amount to the lender which is different than that on the proposed settlement statement, the difference will have to be accounted for.  Typically, the lender will have cut the broker fees to a total of 5%, and trimmed off some of the listed closing fees.  This is normal as in the short sale contract offer the price is low and the listed costs high, and everybody should already be prepared for this, including the buyer who should be ready to pay some additional funds to finalize the transaction.  The title and closing agent must anticipate the closing time lines, and prorate the closing items accordingly, because once the approval is in hand, it is impractical to update it to add, for instance, an additional 25 days of property taxes and condo maintenance.  In the cases where an update is sought, two weeks or more may be lost, or some party to the transaction, such as a Realtor or closing agent, may be expected to cover the costs to make the deal close.  Sellers, Buyers, Realtors, and closing agents: anticipate all delays and costs or be prepared to pay them!

Also, once everybody is in agreement, there are often very strict time periods and rules to obtain the FINAL approval and go-ahead to close and forward the funds to the lender.  If the closing agent and parties do not abide by these rules, a lender may cancel the transaction or otherwise hold it up for several days or more, which can cause problems for the short sale buyer’s loan and other time sensitive plans.  The parties, Realtors, and closing agent MUST follow the requirements or be prepared to be responsible for the results, which in some cases may be a foreclosure and a lawsuit against somebody.

http://www.southptc.com/short-sale-miami-florida-attorney.html

http://www.southptc.com/florida-title-company.html

Miami Condo Short Sale Contract Tip #8

Short sales of Miami condos and homes are often a great way for a buyer to get an excellent deal on a property and a seller to get out from under an upside down mortgage with hopefully less damage to credit and his or her pocketbook.  This is the eighth of several blog entries, in no particular order, each with a tip for the buyer or seller or both, to help make sure the deal goes smoothly while giving protection to one or both parties.

Miami Condo Short Sale Tip #8:

Short Sale Lender Approval–You are not special.  Sellers MUST work their approval or it may never happen. The short sale department of any given lender has  been hired to process and approve short sales.  They will tell you what they will approve and what they feel the value is of the short sale property.  That being said, a short sale seller and his or her agent must submit all the proper paperwork and MUST follow the short sale lender’s directions!  The short sale lender will have an abundance of applications, and will not treat your application as a priority or otherwise special.  One negotiator stated that he had 300 files other than one one in question, thus, none of those files will get special attention.  Nor will the processor go out of their way to make sure they receive the required documents.  In fact, the seller’s only notice of a missing document or document in need of an update, may be a letter mailed via USPS.  To get a short sale approved in a timely manner, it is important that the seller or agent calls on a regular basis to make sure the person currently in charge of the file has everything they need.  A good suggestion is to call at least twice a week and always helpfully ask “do you have all the documents needed?”  and “are there any documents which need to be updated?”  Often the answer to the first will be “yes” but to the second, “well actually we did send out a request to update the ‘whichever’ form.”  At that point you can say “what is your fax–I will send it now!”

The “it is in the lender’s hands now” approach will often result in a painfully long short sale process, and often a sale that fails to close, as the buyer decides to cancel and buy a REO property.   If your Realtor is acting as your short sale agent, make sure you get a guarantee that they will call on the file twice a week and keep you updated.  As a seller be sure to promptly provide any needed documentation.  If your agent cannot commit that time, find a new agent to process your approval.

http://www.southptc.com/short-sale-miami-florida-attorney.html

http://www.southptc.com/florida-title-company.html

Miami Condo Short Sale Contract Tip #6

Short sales of Miami condos and homes are often a great way for a buyer to get an excellent deal on a property and a seller to get out from under an upside down mortgage with hopefully less damage to credit and his or her pocketbook.  This is the sixth of several blog entries, in no particular order, each with a tip for the buyer or seller or both, to help make sure the deal goes smoothly while giving protection to one or both parties.

Miami Condo Short Sale Tip #6:

Contract deposit amounts and placement.  Like any real estate contract, a short sale contract will at some point require deposits.  Buyers should always place their deposit funds with their real estate attorney or title company, not with the Realty agents or with the seller.  It is standard to place a $1,000.00 deposit down at the time of submitting the contract offer, with the balance of typcially 5% coinciding with the last day of the inspection period, usually 10 days after receipt of the seller’s lender’s approval of the short sale.  It is suggested that a contract with higher deposits placed in the beginning may be more likely to be accepted by the seller, but unless the seller has stated such, it is likely not necessary, and may possibly place the deposit funds in jeopardy if a problem of some sort arrises with the transaction.

http://www.southptc.com/short-sale-miami-florida-attorney.html

http://www.southptc.com/florida-title-company.html

Miami Condo Short Sale Contract Tip #4

Short sales of Miami condos and homes are often a great way for a buyer to get an excellent deal on a property and a seller to get out from under an upside down mortgage with hopefully less damage to credit and his or her pocketbook.  This is the fourth of several blog entries, in no particular order, each with a tip for the buyer or seller or both, to help make sure the deal goes smoothly while giving protection to one or both parties.

Miami Condo Short Sale Tip #4:

Closing Agent and Fees.  Miami condo real estate transaction local practices demonstrate that the buyer chooses the closing and title agent and also pays for the title insurance policy, while the seller pays for the title search and the tax stamps on the sale, and each pays a reasonable closing fee.  In a short sale, sellers and listing agents often work with a title company of their choosing early on in the process to get the initial closing paperwork ready to submit to the lender, or maybe a previous buyer backed out and some of this work was done.  In these cases where the seller is demanding to choose the title agent because some of this title work has already been done, the buyer should be open to accept this, but at the same time should require that the seller pay for the buyer’s owner title policy and basic closing costs, while the other standard closing fees remain the same–Sellers’ lenders do not have any problem with this, but they will not pay for unreasonable “negotiation” or other third party fees.  Often times there may be a third party short sale negotiator company wanting to get paid, and as a result the seller, to avoid paying the fees, will attempt to dictate that not only does the buyer have to pay for the title insurance, but also exorbitant closing fees and costs, while not being able to choose their own closing and title agent.  This can get quite expensive for the buyer, especially when they also hire a real estate attorney to advise them on the transaction.  Like any contract, the terms should be a trade off between the parties, not one party dictating the terms.  There is always another deal for the buyer if the seller is unreasonable.

http://www.southptc.com/short-sale-miami-florida-attorney.html

http://www.southptc.com/florida-title-company.html

Miami Condo Short Sale Contract Tip #3

Short sales of Miami condos and homes are often a great way for a buyer to get an excellent deal on a property and a seller to get out from under an upside down mortgage with hopefully less damage to credit and his or her pocketbook.  This is the third of several blog entries, in no particular order, each with a tip for the buyer or seller or both, to help make sure the deal goes smoothly while giving protection to one or both parties.

Miami Condo Short Sale Tip #3:

No extra cash from seller or buyer.  Miami condo short sale contracts should have in the additional terms section a simple clause that states that neither the buyer nor the seller will be obligated to bring any additional cash to closing or otherwise increase the purchase price.  If based on the title search, lien search, or seller’s lender requirements that additional cash or a higher purchase price is needed, this should be a term to negotiate after the lender has given approval.  Also, sellers should include a provision that they are not obligated or responsible to clear liens or other issues, or they may find that not only are they getting zero dollars at closing, but they have to bring money to the deal or otherwise pay to clear title issues.

http://www.southptc.com/short-sale-miami-florida-attorney.html

http://www.southptc.com/florida-title-company.html

Miami Condo Short Sale Contract Tip #2

Short sales of Miami condos and homes are often a great way for a buyer to get an excellent deal on a property and a seller to get out from under an upside down mortgage with hopefully less damage to credit and his or her pocketbook.  This is the second of several blog entries, in no particular order, each with a tip for the buyer or seller or both, to help make sure the deal goes smoothly while giving protection to one or both parties.

Miami Condo Short Sale Tip #2:

One buyer contract.  As previously mentioned, make sure that there is a bona fide Short Sale Addendum to the contract, the most common being the FAR form.  In this Addendum, make sure you cross out or otherwise invalidate the provision allowing the listing agent to submit more than one contract to the seller’s lender.  This is important because the administrative process for the sellers’ lenders is already very slow, and to submit several offers to the lender and have them choose what supposedly is the best offer is likely a waste of time for everybody.  The seller and listing agent should keep it simple, pick a serious contract, and push the lender to accept it and approve it.   Taking back-up contracts is also reasonable, but they should not be sent to the lender as it will confuse things.  The lender should be called a minimum of once per week after submission, if not twice to keep things moving.

http://www.southptc.com/short-sale-miami-florida-attorney.html

http://www.southptc.com/florida-title-company.html

Miami Condo Short Sale Contract is Binding

A real estate contract signed and accepted by the Seller and the Buyer, whether for a Miami condo or home, is a binding and fully enforceable contract, regardless if the contract is “subject to short sale lender approval” or not.  If such real estate contract is subject to Seller’s lender approval it does not necessarily mean that if the lender requires any alteration the Seller or Buyer can immediately cancel the contract.  It is important to clearly include contract terms, usually in the “Additional Terms” section of the contract, stating, either on behalf of the Buyer, Seller, or both, that if particular terms are not approved by the Seller’s lender, that the party in question may cancel the contract, usually with full release of all deposits.  Also, an executed contract should be marked as “Pending” in the MLS, per your local MLS rules. 

http://www.southptc.com/florida-real-estate-contract.html

http://www.southptc.com/short-sale-miami-florida-attorney.html