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Real Estate Investment OptionsAs a Real Estate Attorney in Miami Florida, and especially in the last few years I’ve seen some people struggle with the concept of a “short sale”.

They are unhappy with their financial situation sure, but in addition to that many question whether a short sale is the right thing to do from a moral stand point.

After all they bought a home which they are now barely able to keep payments and are upside down on the debt.

Not in my clients’ experience, but in some cases Banks have gone as far as to threaten people by taking a moral stance on the issue. Guilt is a powerful incentive when you have a conscience, and they know many people feel bad about that aspect of the situation.

It’s easy to feel trapped when you think there are no options. The good news is that every problem has a solution!

It’s all Business my Friend!

For most hard working people this wasn’t part of their plan. They are in a low point in their personal and even professional aspects of their lives and need a fresh start and a clean slate.

The last thing they need is to feel guilty about a business decision they need to make.

And that’s exactly what it is:

A business decision!

As an Attorney I provide legal advice and find the best possible legal solution to my client’s predicament. My role is both supportive and educational, then I aid in the transactional aspect which is problem solving in its very nature.

In order to ease these feelings of remorse when they are obvious, my approach is as I mentioned, educational.

It’s a Contract

I focus their attention on the fact that a Home/House/Property is an investment held together by a contract between them and the bank.

This contract explains the terms and options for both Bank and home owner. You as the home owner have the right to stop making payments at any time if you choose to, and the bank has the right to take the property back.

It’s a business decision no different than any other where the circumstances were unexpected, have changed, or where it no longer makes sense to hold to a bad investment.

Sometimes defaults and short sales are done in a strategic manner, to protect the client from further economic loss and stop the bleeding. If the circumstances are unfavorable to you, something has to be done about it. If they are unfavorable to the bank, they will do something about it.

Insurance companies change their rates on us yearly, especially if the wind blows too hard down here in South Florida. When they change their rates, they change their contract and they did so because their circumstances apparently changed… like weather patterns!

Win-Win Outcomes For All Parties!

So there are options for everyone. You can stop making payments at which point the bank will take the property back. Yet there is one more option for both which is to renegotiate the contract,

…which is precisely what a short sale is!

You as the seller go to the bank and say I’d like to renegotiate the terms of our contract based on your current situation.

The Bank will weigh your offer against the other alternative which is to foreclose on the property, and then make a decision one way or another.

I then negotiate on your behalf with the bank to find the best possible solution for both parties.

But as “your attorney” remember I always represent your interests first.

In many cases, we are able to negotiate the lender providing the seller with additional incentives:

  • Ultimately, the losses are not only stopped, but the client can be paid up to $35,000 from the lender at closing, with
  • all closing costs paid by their lender as well the balance of the mortgage (referred to as the deficiency balance) waived and forever forgiven.   

As such, the short sale results in a well thought out exit strategy with the client winning at the end. This may ease the immorality of it all.

So you see there is no morality clause in any contract. If there was it wouldn’t be a contract, it would be a promise… and it would carry a lot less weight and certainly no exchange of money!

A short sale is a business decision based on the need to renegotiate a real estate contract, and we should be glad that it exists as an option to find an alternative to what comes as close to a win-win scenario for everyone.

 

Short Selling Your House Successfully 

Contrary to what you may have been led to believe, short selling your house successfully in Miami is not difficult, nor complicated.

The thing is Short Selling Your Housethat we’ve been busier than usual, and in the spotlight more often in comparison to other States.

As a Real Estate Attorney and also a real estate consumer I have a somewhat unique perspective on the short sale process, its pros and cons, impact on families and our local economy as well.

So I decided to put together a few bullet points that focus on short selling your house successfully from a homeowner standpoint!

Realtors! Pay attention as well 🙂

Educate Yourself Via Your Peers – This is not hard to grasp. Everyone pretty much knows someone who’s lost their home to foreclosure.

So if you do know someone that’s gone through the process, or is going through it, talk to them, ask them questions regarding the process, cost, options. All the things you know you might have to spend time researching or paying someone to tell you, you can get from your peers.

Many times we trust strangers that have experienced a situation more so than expert testimony, believe it or not!

Read Everything on the Topic – Sometimes the best way to learn is via a self-taught method. Not because there is no value in formal education, but because when you learn on your own, you tend to experiment without constraint.

On the web not everything is filtered and there’s more peer-peer content than ever before. Consumer driven blogs and sites are a dime a dozen and many are good at providing basic information on just about any topic you can think of.

Three out of five patients consult WebMD.com prior to seeing their Doctor. Peer reviews are a powerful thing!

Consult an Attorney Before Making a DecisionOk, so this is where I tell you that even if you have talked to your friends that have gone through the process and learned everything there is to learn about successfully short selling your house, it might help just a… tiny bit… to consult with a lawyer regarding your personal situation.

This should be at no cost to you. I’ve never charged anyone to help figure out their options, and that’s usually the first step. Where are you at right now?

Know Your BankThe bank’s short sale decision making process is driven by a single factor, money. Ideally they would prefer that you continue making payments so they make interest on the loan as long as possible.

So negotiating with the bank is key in the short sale process. You have to motivate them to accept an offer that’s not their best scenario but when compared to the alternative is actually better.

If foreclosure is imminent and you can prove it, the bank usually takes the path of least loss to them.

Understand your Situation – The homeowner’s situation is a bit different from the bank’s. The short sale transaction is not like a typical home sale transaction. The price is inconsequential to you because what’s really important is to get out of a hole.

The only time that price comes into question is when the bank is pursuing a deficiency judgement for the homeowner to assume.

This is where your attorney goes to bat for you if needed, by negotiating away any deficiency in addition to managing the process quickly.

By the way HAFA properties carry no deficiency.

The Psychological Ramifications – Losing your home can be mentally taxing. This is not what you had in mind. All that money you invested is now gone and you basically have to start from scratch. It’s a tough time for any family.

On the bright side, this is a chance to start fresh. Lots of great deals to consider these days!

Also, you probably had a chance to save a little money throughout the process which can help with the logistics of moving and settling in a new place.

My point is, don’t dwell on it. It’s over… focus on what you can control and think ahead!

Finish strong and get ready for a new beginning for you and your family!

Working with Realtors

A good realtor can be of immense value to the short sale process. They can:

  • Facilitate the initial process.
  • As good connectors, they usually have a good network to pull talent from.
  • They can liaise with attorneys and manage flow and expectations for you.
  • They can find good properties at great value.

When it comes to the short sale process realtors are motivated by time and money. But time is especially important since the value of what they earn in commissions is directly proportional to the time they spent involved in the process.

They are also motivated by Volume or Quantity of transactions. The cash 22 here is obviously the time that it takes to manage each file. If they are too involved in the process they don’t have the time to do what they do best, which is to find people that are going through a rough patch and help them through the process… in essence to bring in the business.

Because of this, it’s essential for realtors in the short sale niche to be well connected, possibly embedded with an attorney that is also a specialist in short sales, loan modifications and foreclosure defense.

A good attorney can shorten the short sales process by:

  • Having built-in efficiencies and work flows in to the process.
  • Having the right team at the firm, the technology, software, and specialists on board.
  • Having the ability to negotiate win-win scenarios that improve both the rate of successful closes while reducing the effort per transaction.

One of the reasons why the Law Offices of  Jacqueline A. Salcines P.A  has such a good relationship with a handful of Realtors is because of the above mentioned points.

We understand the process of short selling your house successfully in our sleep, and the role and needs of key members that make things happen . This allows us to close deals much faster than the National and State average.

So you see! Short Selling your house successfully doesn’t have suck the life out of you. It’s all about having the right team working for you!

Short selling your house successfully is about understanding that the sooner a win-win scenario for all involved is created, the faster and smoother the outcome will always be.

See you out there!