Tag: Jenny Zamora

A wave of Short Sales could be headed for Orlando due to COVID-19

Posted on by Jenny Zamora

While stay-at-home orders are keeping people at home, many Floridians could be falling behind on mortgage and rent payments due to loss of employment and an economy on a downward spiral.

The real estate data-service provider, Attom Data Solutions, reported that 10 of Florida’s 67 counties are in the top 50 most vulnerable counties in the U.S. to the economic impact of the COVID-19 pandemic. Most of these counties are in either North or Central Florida, including Osceola, Hernando, Flagler, Clay, Lake. Surprisingly, Broward county was the most vulnerable of the South Florida counties.

The only state that ranked higher than Florida in this study was New Jersey with 14 counties in the top 50 most at risk in the nation. Also ranked near the top were New York, Connecticut, and California. Real estate markets in the Midwest and West are considered to be less likely to see big numbers of people losing their homes because of the virus outbreak.

483 counties throughout the US were studied to determine what percentage of homes we can expect that will be receiving foreclosure notices by the end of 2020 and what percentage of the local wages are needed to pay for homeownership. The study used data from the last quarter of 2019 to calculate the averages.

Central Florida has one of the lowest median incomes in the U.S. The local economy is largely dependent on tourism and convention revenue which could mean big trouble for homeowners. Many landlords are suffering right now… especially if they depend on rental incomes to pay the mortgages.


Central Floridian homeowners could be facing rough waters ahead

Realtors in Orlando are also starting to feel the pain. Activity has slowed for both buyers and sellers with only people who have no choice but to buy or sell eager to close. Home sales in Orlando are reaching the levels that we saw back in 2008 after the market crash. Orlando Realtors are losing almost $700,000 in daily commissions from the pandemic.

Right now it’s too early to say how this will all play out because we don’t know how effective the Federal stimulus will be in helping people through this financial rough patch. Banks are granting temporary mortgage forbearance to many homeowners and businesses will hopefully get enough help to pay employees through the crisis.

I believe lenders will have to step up and provide some major help to prevent foreclosures in Orlando and other Florida cities. In my opinion, it’s the only way to avoid large numbers of foreclosures and short sales in Orlando.

Potential for Mass Short Sales in Orlando

Like I said before, it’s too early to tell what will happen to Orlando real estate market as a result of coronavirus. However, I do think that if people don’t get back to work in the next couple of months, short sale Realtors in Orlando will be extremely busy by the end of 2020 and well into 2021.

Even lenders aren’t sure how everything will end up playing out because they don’t know how much time it will take for Floridians to get back to work. Short sales and loan modifications are used as an alternative to avoid foreclosure. The problem with loan modifications is that the homeowner will still be on the hook for the entire amount of the loan but with lower payments.

I’ve been a short sale Realtor in Orlando since 2004 and 9 out of 10 times when I present my clients with the terms of both a short sale and a loan modification, they choose short sale.

Doing a short sale, however, will allow the homeowner to sell the home for less than what’s owed on the mortgage. By doing this, the lender gets at least most of their money back and avoids a lengthy and expensive foreclosure process. The homeowner also benefits from a short because they can avoid having a foreclosure on their record and won’t be responsible for the difference between what they owed and what the home sold for.

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How To Submit A Short Sale Package

Posted on by Jenny Zamora


Submitting The Short Sale Package

Back in the early 2000s when short sales were scarce and uncommon, short sale agents were forced to deliver completed short sale packages via FedEx, UPS, or sometimes even in person, depending on where the short sale lender was located concerning the home. As a short sale agent in Orlando, I did this to ensure the lenders would receive the package because banks would routinely lose or would claim they “never received it”, probably because they were outsourcing their short sales to 3rd party short sale processors. It was very frustrating, to say the least…

Although Bank of America was the first one to have the ability to receive shorts ales via upload, many of their competitors still required us to fax them over, and over… and over. As the years went on, through the implementation of online software and loss mitigation departments becoming more familiar with short sales, the short sale process became more streamlined and where being processed a lot faster.

These days some lenders will only accept documents if you upload them to their online processing platform. You must speak to someone before submitting the package so you know exactly what they need and how they need it. If there’s only one document missing, it will hold up the entire process.

Documents Needed for A Short Sale Package

Nowadays most lenders will have their short sale package with their company logo. It’s best to just follow along and submit the docs exactly how they ask for them.

This is a list of documents required by all lenders to be considered for a short sale:

Listing Agreement: The short sale lender will need proof the property is listed by a licensed real estate agent at the current market value. The listing agreement must be signed and list the terms of the listing, the name of the brokerage and the amount of commission to be paid. It’s never a good idea to lowball the bank so make sure the offer price is close to the listing price, they aren’t stupid and it could cause them to reject the file altogether.

Purchase Contract: Note: Not every lender will accept a contract that’s been signed electronically. They may require you to have “wet signatures” on the contract so find out the requirements beforehand. Make sure the property address is written correctly and every line has initials and signatures where needed so there aren’t any delays.

Hardship Letter: Writing an effective hardship letter is probably the most important part of the short sale package. It should tell a detailed story about how the homeowners got into their current situation and why they can no longer afford to pay the mortgage. Whether it’s because of loss of employment health problems or divorce, leave nothing out. The hardship letter must have the loan number on it, signed and dated by the homeowner.

Letter of Authorization: This is the letter in which the seller authorizes the agent to speak with the lender on the seller’s behalf.  As a short sale realtor in Orlando since 2004, I prefer to send in the authorization letter as soon as I get the listing agreement so I can establish communicate easily with the short sale lender before sending in the package. However, for some unknown reason, many short-sale agents will wait to send it together with the complete package.

Bank Statements: Every short sale lender will want to see your last 2 bank statements for every account you have and don’t leave out any pages as this will delay your file. If there is any unusual activity on the account like large deposits or withdrawals, I suggest you make a note to the short sale processor explaining why. Put out the fire before it starts…

Last 2 Years Tax returns: The short sale lender will also want to see your past 2 years of federal tax returns, dated and signed, on every single page. If for some reason you haven’t failed, you should write a letter explaining why.

Last 2 W-2s or Profit and Loss Statement: The lender will require you to send in the past two years of w-2s disclosing your salary. However, if you’re self-employed, you’ll need to send in a profit and loss statement. If you’re not self-employed, you should also send in your payroll stubs supporting the w-2s. Explain any bonuses or other pay increases if applicable.

Preliminary HUD Statement: The preliminary HUD statement should be prepared by the title company that will do the closing. It contains all the details of the property such as a legal address, seller’s names, buyer’s names, and the estimated closing costs. It will break down all the costs of the transaction including the sale price, mortgage payoffs, real estate commissions, taxes, insurance, etc.

The CMA [comparative market analysis]: Your short sale agent should also prepare a comparative market analysis to be included with the short sale package. It’s a report of comparable homes sold in the same area. A CMA report should justify the offer price and should be included if the offer price is less than the listing price.

Contractors Estimate: If the home requires some repairs to make it livable or even minor repairs, it’s always a good idea to include a contractor’s estimate of how much it will cost to make the repairs. If you want to be thorough, you should get 3 estimates from different contractors.

Short Sales Aren’t Guaranteed

Keep in mind that there is never a guarantee when it comes to short sales. Just because you followed all the steps and did everything the lender asked of you, there’s still a chance that your short sale will be denied by the lender. If this happens, don’t give up!

If you have an experienced short sale agent in your corner, they won’t give up either. Sometimes it takes some negotiating and jumping through a few more hoops to get it done.

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What Do Real Estate Agents Charge?

Posted on by Jenny Zamora

If you need to hire a real estate agent to help you buy or sell a house, keep in mind these real estate professionals get paid through a real estate commission. So how much does it cost and why? Can this be negotiated?

As a real estate agent in Orlando, FL since 2004, please let me explain everything you’ll need to know about real estate commissions.

How much are real estate commissions?

Instead of getting paid by the hour or weekly salary, real estate agents only get paid if the real estate transaction goes through.

Some brokerages will charge a flat rate for their services, most agents work off a percentage of the sale once the sale has gone through. The exact percentage can vary however, most real estate commissions are usually between 5 and 6% of the sale price. So on a $100,000 home, a 5% commission would be $5,000.

This might seem like a lot of money, but keep in mind that the real estate commission gets split between the listing agent and buyer’s agent. Also, real estate agents don’t receive a penny until the deal has gone through… a process that can take weeks and even months of work depending on the deal.

Who pays the real estate commission?

Usually, the seller of the home pays the entire amount of the commission for the service of both the listing agent as well as the buyer’s agent… unless the agent is representing both buyer and seller.

The two agents typically split the real estate commission 50/50. If a home sells for $100,000 at a 5% commission, each real estate agent will walk away with $2,500. However, this can also vary in certain situations such as if the listing agent was only offering 1% to the buyer’s agent. Everything in real estate is usually negotiable.

Dual Agency Explained

If the same real estate agent is representing both the buyer and the seller, the agent then becomes a “dual agent” and receives the entire amount of the real estate commission. That’s why listing agents love it when they also find the buyer in addition to representing the seller. [Talk about a huge payday!]

As an Orlando real estate agent, this has happened to me countless times. However, many real estate agents don’t like representing both parties because it puts them in the awkward situation of having to work for both the buyer which could at times become a conflict of interest.

What Exactly does real estate agent commission cover?

Homeowners certainly have the option of selling or buying their home “For Sale By Owner”, but when they find out the tremendous amount of time and work that it requires, they usually end up hiring a real estate agent. Real estate agents provide a whole wide range of services like; pricing the home correctly, marketing the home [on the Multiple Listing Service, social media, etc.] negotiations, and even guiding homeowners through the closing.

An experienced real estate agent can help you get top dollar for your home while handling all the stress that comes with selling a home. I can tell you from experience… good real estate agents earn their money!

Need proof? Check out these numbers… A recent National survey done in 2019 found that a typical FSBO home sold for $195,000 compared to $245,000 with the assistance of a real estate agent, according to the National Association of Realtors®.

That means that homes listed for sale with a realtor sold for $50,000 more than without an agent. Maybe that’s why a whopping 92% of homeowners used a real estate agent to sell their home.

Are real estate agent commissions negotiable?

As my first ever real estate teacher used to say all of the time “everything in real estate is negotiable”. Although a 5% to 6% commission is the norm here in Florida, there aren’t any state or even federal laws that set commission rates.

This means that if you want to sell your home, you can certainly ask your real estate agent to reduce their commission however, they aren’t obligated to do so.

One thing to consider is this: Your listing agent must pay for marketing your home from the commission they receive after the closing, less commission could mean a lower marketing budget for your home which could mean more time on the market.

With that being said, it won’t hurt to ask your agent to lower their commission. Most real estate agents won’t be offended [who cares if they are?] and the worst they can tell you is no. If you are tight on the numbers, you may ask them to charge you a flat fee for helping you list the home, communicate with buyers, and write the contract, but you won’t get a full service from the agent or brokerage with a flat fee. Most agents don’t offer a flat fee listing agreement, so you’ll have to shop around a bit, and be prepared to do some of the heavy lifting yourself.

Buying or selling a home will probably be one of the largest financial transactions of your lifetime, so make sure to find an experienced real estate agent that you can trust to do a great job. This isn’t the time to hire your nephew who just got his license 3 weeks ago…

Other Things You Should Know About Real Estate Commissions

Every detail about an agent’s real estate commission must be outlined in the listing agreement [contract] that you signed when you hired the agent. A typical listing agreement should also state how long the agent will represent you. Usually, a listing agreement in Florida lasts between 90 to 120 days.

As the home seller, you want a real estate agent who will fetch you the highest and best sales price and the terms you want, but the best real estate agents aren’t cheap. Like the old saying goes with most things in life… you get what you pay for.

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The Complete Short Sale Process From A to Z

Posted on by Jenny Zamora

Even after all these years, the short sale process remains a mystery to many people. Distressed sellers are puzzled and desperate for some guidance from a short-sale agent. Even more confusing… most real estate agents in Orlando don’t know how to do a short sale.

What’s a Short Sale?

A short sale is a situation that occurs when a mortgage lender agrees to accept a lesser amount than what’s owed on the outstanding mortgage balance. This situation benefits both the lender as well as the seller [homeowner] when foreclosure seems unavoidable.

By agreeing to a short sale, the lender can avoid a long drawn out and costly foreclosure process. Because even if the bank forecloses, there’s no guarantee that it will sell at the auction in which case the lender would end up back with the property as an REO [real estate owned] property. If the lender keeps the property, they will ultimately have to put it up for sale again, and there’s no telling how much they will get or how long it will take.

The dollar amount offered on a short sale is often more than a lender would receive at the auction or as an REO listing. However, you should know that banks are never thrilled about releasing mortgage obligations at huge discounts either.

The Seller

There are 2 main reasons why lenders grant short sales. First, the homeowner is going through a financial hardship and cannot continue paying the mortgage. Secondly, there isn’t enough equity in the property to pay off the mortgage and closing costs, taxes, etc. Both of these conditions must exist for a bank to approve a short sale.

A few examples of financial hardship may include loss of employment, reduction in income, divorce, medical condition, job transfer, bankruptcy, or even death.

Sellers must prepare a financial package so they can submit it to their lender. Every bank has a different short sale package but the basics are the same among all lenders.

The Short Sale Package

Following are the main components of a typical short sale package:

  • Authorization Letter: This is a document which allows your short sale agent to speak with your lender on your behalf.
  • Hardship Letter: A detailed letter describing the hardship the seller is going through explaining why they can no longer afford the mortgage.
  • Preliminary Closing Statement: Discloses the contract amount, realtor commissions, closing costs, taxes and any other fees involved with the transaction.
  • Financial Statement: A statement which discloses your income versus your expenses.
  • Two years of your tax returns
  • Two years W-2s
  • Last two bank statements
  • Two months of pay stubs
  • CMA: This is a report prepared by your short sale agent which lists recent sales of comparable homes in your area.

Submitting an offer to the Bank

Before submitting a short sale offer to the lender, buyers should ask their real estate agent for a list of comparable properties. The lender will look to get an offer that’s close to market value.

It’s important to keep in mind that the listing price on a short sale may not reflect the market value. The property will most likely be lower than market value to entice more buyers to make an offer. Most short sales begin when there’s a signed and accepted purchase offer by the seller and buyer.

Keep in mind that the short sale listing price might not reflect market value. The property might be priced below comparable sales to encourage multiple offers. Some short sales can begin before an offer but banks will most often start the procedure upon receipt of an accepted purchase offer.

Once the seller accepts the offer, the listing agent will then send the listing agreement, signed purchase offer, and proof of funds to the bank together with the completed short sale package.

If the package is incomplete, the lender won’t even process it. This is why it’s so important to have an experienced short-sale agent representing the seller.

The Short Sale Lender

Short sales are anything but short… buyers can end up waiting several months to get a response from a lender. The short sale listing agent must follow up with the bank regularly and keep detailed notes of each contact. Being a short sale agent in Orlando since 2004, I can tell you that following up regularly with the lender is crucial to the success of a short sale transaction.

I can’t tell you the number of times a buyer has decided to cancel their offer because of the bank taking too long to respond. This is especially true when the buyer needs to buy a house ASAP. For buyers wanting to close quickly, a short sale may not be the best option for them.

The Usual Process

Once the lender receives the completed Short Sale package, this is usually what takes place on the bank’s end:

  • The loss mitigation dept acknowledges receiving the completed package. This alone can take between 1 – 3 weeks.
  • A short sale processor is assigned to the file, this can also take up to a week or two.
  • A BPO aka [Broker’s Price Opinion] is ordered. The lender will contract a local realtor to give their opinion on what the property is worth. They do this by looking at the comparable properties in the area and are supposed consider any repairs the home may need.
  • Another short sale processor maybe assigned to the file. This can add another week or 2.
  • A second short sale processor might be assigned. This can take another 30 days.
  • The offer is either denied or accepted. If the offer is denied, the bank will counter with the amount they are willing to accept. At this point the buyer may wish to counter the bank’s offer together with a contractor’s estimate and a CMA.
  • Once the bank has accepted the offer, the lender will require all parties in the transaction to sign an arm’s length affidavit. This document states that parties are unrelated and acting their own best interest.
  • The lender will send out a short sale approval letter approving the contract amount.

While all this is going on, sometimes buyers will give up hope and cancel. They become tired of waiting because the short sale process is taking much longer than they expected. I’ve had situations with clients where buyers just walk on the deal without even telling their real estate agent.

I’ve had some Orlando short sales get approved in two weeks and others take more up to 6 months on average. A top short-sale realtor can help speed up this process, but at the end of the day, it’s all up to the lender. Some lenders are easier to work with than others.

It’s crucial that the short sale agent check-in with the short sale bank at least once or twice a week. Unfortunately, there are many incompetent short sale processors and the short sale agent may have to go over the processor’s head or request an “escalation”.

Final Thoughts

A good short sale listing agent will often have a good idea about when approval will come after the file has been sent for the bank’s final review. If so, the buyer would be wise to start the loan process if they haven’t already. Occasionally, banks will only give buyers 2 weeks to close so it’s important to be ready.

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How To Choose A Short Sale Agent in Florida

Posted on by Jenny Zamora


Your Success Depends on the Short Sale Agent You Choose

A quick word to the wise… pick your short sale agent very carefully. A short sale is way too complex of a transaction to trust a new agent with. And don’t make the mistake of just hiring the agent with the flashiest website either. When dealing with a short sale, you need a short sale specialist… an agent who specializes in short sales.

Back in 2006 when the market crashed and short sales were everywhere, a lot of agents decided to specialize in short sales. Real estate training companies made big profits by offering short-sale training to thousands of agents. However, there’s no way you can learn how to be a short sale agent in just 3 hours. Unfortunately, many homeowners fell victim to these newbie agents claiming to be short sale specialists resulting in a failed short sale transaction.

Now in 2020, short sales in Orlando are not as abundant and there are a lot fewer short sale agents. Many times I get referrals from other real estate agents in Orlando because they don’t want to deal with the extra work involved with processing a short sale.

Ask a Real Estate Agent to Refer You To a Short Sale Agent

If you have a friend or relative that’s a real estate agent, chances are they’ll be able to refer you to a good short-sale agent. Short sales require a lot more work than a traditional transaction which is why most agents avoid them and are happy to refer them to another agent.

How Experienced Should my Short Sale Agent Be?

There are realtors out there that have been in the industry for several decades and have a ton of experience. However, some real estate agents stay in the business for longer than they should. What I mean by that is… the real estate business changes constantly and if you have an agent that’s set in their ways of doing things and not willing to keep up with the changes, then you’re in trouble and you should probably find another agent.

When it comes to finding an experienced short sale agent, you need to verify how active they’ve been recent. Ask them to show you proof of recently closed short sale transactions and find out how many clients they’re currently working with. Sure, they must have been doing short sales for a long time but even more important is what have they done lately.

I’ve been a short sale agent in Orlando, FL since 2004 with thousands of closed short sale transactions and I can tell you that there have been a lot of changes in the way short sales were handled back then and now in 2020. From different incentive programs being offered by lenders to the Federal rules and regulations, everything will continue to change.

When choosing a short sale agent, here are a few questions you should ask:

  • How many years have you been a short sale agent? Your short sale agent should have a minimum of 3 years experience in selling short sales. There’s no better teacher than experience. Making mistakes and finding out things the hard way is a great way to learn and avoid making those mistakes on future short sale deals. If you’re able to find an agent with experience in real estate investing, even better.
  • How many short sale transactions have you closed? Just imagine the knowledge of a short sale agent that has closed over 1,000 short sale transactions. These are the elite short sale agents and they will know what each of the top lenders will require, how they operate and what to expect. They will also have short sale packages from every single bank on hand. These agents will more than likely have systems in place to help streamline the process while providing you with individual attention.
  • Do you foresee any problems with my short sale? An experienced short sale agent will know if there are any red flags to warn the seller about just by asking a few questions. Remember, a real estate agent is not allowed to give tax or legal advice. However, the agent should be familiar enough to point out some potential tax consequences, legal issues, etc. Your short sale agent should be able to refer you to a real estate attorney in needed.
  • Do you have any experience with my lender? A past deal doesn’t guarantee you’ll get the same response from a bank, but it can be a good indicator. Different banks have different processes and some are much tougher to negotiate with than others. Chances are that your short sale agent will have some experience with your lender, unless your lender is a private entity or investor. If you have a loan with a private investor, you may not get the answer you want but at least you’ll get a quick response.
  • Will you be processing my short sale? Make sure the agent you’re talking to is also the person processing your short sale. If an agent is too busy, they may pass your short sale off to a third party processors who may not even be licensed. Some people believe real estate attorneys are the best negotiators for handling short sales. This isn’t the case, I actually have several real estate attorneys referring there Orlando short sales to me. The difference is that an attorney will charge you whether the deal closes or not and a real estate agent only gets paid if the deal goes through.
  • How long do you expect it will take for my short sale to close? If you haven’t yet heard, short sales are anything but short. However, if your short sale agent has recently done some deals with your lender, they should have a pretty good idea how long everything will take.

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