Tag: Jenny Zamora

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.

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
TOC*

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.

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
TOC*

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.

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
TOC*

What Should You Look For In A Real Estate Agent?

Posted on by Jenny Zamora


Selling or buying a home can be challenging and will also be one of the biggest financial decisions of your lifetime. Finding the right real estate agent that has the experience for what you need is crucial.

Having a good real estate agent in your corner will is important whether you’re buying or selling. In the state of Florida alone there are almost 300,000 active real estate agents.

Everywhere you look there are advertisements for real estate agents; billboards, bus stop benches, radio ads, etc… So how do you choose the best one for you? Follow these steps on hiring the perfect real estate agent for your needs.

Tips On Finding A Real Estate Agent

Speak To A Lender Before Hiring An Agent

One of the biggest mistakes a potential home buyer makes is to start looking for homes without knowing how much they can afford to pay for a home. There’s nothing more disheartening to fall in love with a home only to find out that you can’t afford it.

By getting pre-approved for a mortgage, you’ll know exactly how much home you can afford as well as address any issues with your credit if needed well ahead of time. Having your pre-approval letter ready will also show potential buyers’ agents and sellers that you are serious about buying. When you’re in a competitive market, sellers may not even consider an offer without a pre-approval letter from a lender.

Get Recommendations

A good way to start on your agent search is by asking friends and family members if they can recommend a real estate agent they’ve had a good experience with. You should hire an agent that specializes in whatever your real estate goals are. For example; If you’re a first-time homebuyer, you should hire an agent that specializes in first-time homebuyers as opposed to an agent that works with investment properties or short sales.

It’s also a good idea to hire an agent who is a Realtor. This means they are a member of the National Association of Realtors aka [NAR] and are held to a higher standard as specified in the organization’s code of ethics. Many Realtors hold special certifications to demonstrate they’ve completed training in specific areas of real estate. These are some of the designations:

CDPE [Certified Distressed Property Expert]: Completed specialized training in short sales and foreclosure prevention. CRS [Certified Residential Specialist]: Completed special training in working with buyers of residential real estate. ABR [Accredited Buyer’s Representative]: Trained in representing buyers in transactions.
SRES [Seniors Real Estate Specialist]: trained in helping buyers and sellers aged 50 and over.

Research Potential Agents

Always begin with online research. Start by checking their website and any social media accounts they may have. You should be able to find reviews, current listing information and get an overall feel for the person through their online presence. If they have no online presence then move on to the next candidate.

Interview 3 Real Estate Agents… at Least

Remember, you’re going to be communicating with this person for the next several weeks or even months until you’ve accomplished your real estate goals. An “in-person” interview will be a chance for you to get a feel for the agent’s experience and style. You want to work with an agent who understands what you’re looking to accomplish and be very familiar with the area you’re buying or selling in.

This is also a chance for you to see firsthand how professional they are. The more effort they put into a presentation for you is a good indication of the effort they’ll put in when they’re working for you. Interviews are also a great way for you to establish a preferred way of communication moving forward whether it be texting email or phone calls.

Ask For References

When you’re interviewing potential real estate agents, request to see their references. Ask the agent to

provide the information on any homes they’ve recently sold [in the past year]. You should also ask them to provide the contact information from any of their recent clients. Be sure to call those clients and find out what their overall experience was with the agent…Ask them if they would work with the agent again.

Trust Your Gut

Once you’ve followed the tips on finding the best agent, you still might have to choose between 2 or 3 of them. At this point, you should go with your gut. Remember, you’ll be in constant communication with this person so you should feel comfortable around them and be able to tell them everything.

It’s kind of like dating… sometimes it comes down to the chemistry… or lack of chemistry. If you have an agent and everything checks out, but you’re still not feeling the vibe, don’t hire them. Keep looking until you find the right fit for you, it will be worth the extra effort.

Read The Contract Carefully

Your contract should spell out all the terms to which you have agreed… including the commission. Typically, the seller pays all of the commission which is usually about 5-6% to be split between the listing agent and buyer’s agent. You should also pay close attention to the length of the contract. If your home hasn’t sold in 6 months or you haven’t found a house to buy in that time, then you’ll probably want to find a new real estate agent.

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
TOC*

The Difference between a Short Sale and a Foreclosure

Posted on by Jenny Zamora


Short Sales and Foreclosures are Very Different Situations

Most people who have never been through a short sale or a foreclosure, think it’s the same thing. Although short sales and foreclosures have a few things in common, they are both very different scenarios… especially when you’re the homeowner going through it. Doing a short sale will always be better than letting your house go to foreclosure just to avoid the damage to your credit among other benefits.

What’s a Short Sale?

A short sale occurs when a homeowner can no longer afford to make the mortgage payments to their Bank, and they have to sell the home for less than what’s owed. Many times, homeowners are already in active foreclosure when they decide to try and short sale the property. The homeowner must also prove to the lender they’re going through some kind of hardship affecting their ability to pay.

Even if the homeowner meets all the criteria of a typical short sale, it must still have the final approval of the lender. The majority of lenders will opt for a short sale instead of taking a homeowner through a costly foreclosure process.

Benefits of a Short Sale

Avoid Foreclosure- A foreclosure can damage your credit for up to 7 years whereas a short sale will have much less of an impact.

Eliminate your Debt- Eliminate your debt with the bank for good. Be sure that your short sale realtor tells the bank that you’re not able or willing to repay the entire amount of the deficiency.

Cash Back to Sellers Many banks offer cash-back programs so they have money to relocate to another home.

Why would my Bank agree to a Short Sale?

Banks don’t make their money by foreclosing on homes. They lose money… taking a mortgage holder through a foreclosure takes is expensive and can take a long time. Lenders also realize that if they do foreclose on the house, they’re just going to have to list it and end up taking a loss anyway.

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
TOC*