Top Orlando Realtors podcast Introductory episode
In this episode, you will learn
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There are tens of thousands of distressed homeowners wondering the same things right now. Will Congress continue to help out consumers who are behind on their mortgages by extending the Mortgage Forgiveness Debt Relief Act of 2007 for one more year?
The act was put in place in order to help homeowners with underwater mortgages by forgiving the taxes owed on the difference between the short sale payoff and the full amount of the loan. Under the current federal tax law, the amount forgiven by the lender gets reported as ordinary income for the homeowner.
The Mortgage Forgiveness Debt Relief Act of 2007 expired last Dec. 31 and has yet to be renewed for principal reductions during 2014. These principal reductions can apply to loan modifications that were done by lenders, foreclosures, and short sales. Many believe that Congress will extend the law however if they don’t, hundreds of thousands of distressed homeowners will be hit with tax burdens that they may not be able to handle.
I’ve had several dozen Orlando homeowners that would’ve opted to do a short sale on their home but have filed for bankruptcy instead rather than hoping for Congress to renew the law. I believe that it’s for reason that we’ve seen a significant drop in Orlando’s short sales so far in 2014. The fact is that I can’t recommend for homeowners take a chance on a tax law that may or may not get renewed.
Let’s get back to the main question: Will the mortgage forgiveness act be extended?
The truth is that we just won’t know until it happens… or doesn’t happen. And for underwater homeowners that have received or plan on receiving a reduction on their principal balance, it’s going to be a stressful time until it all plays out.
Regardless of whether Congress decides to extend the law or not, a short sale may still be the way to go for some distressed homeowners. If you compare a short sale to a foreclosure, you’re still better off doing a short sale, and here’s the reason why. If a house goes to foreclosure, it will still sell for way below the full payoff amount and you would still be facing possible tax burdens. The difference is that by doing a short sale you would avoid having a foreclosure on your record and you will also have a chance at getting relocation assistance from the lender.
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When searching for the right Orlando real estate agent to meet your needs, keep these important things in mind.
Real estate agents in the state of Florida go through endless hours of special training to ensure they know all the real estate laws in their state. Going it alone without the representation of an experienced realtor is dangerous and can cause you to slip up and lose a deal or even worse, end up in legal hot water.
Traditional real estate marketing through the MLS and other network channels is effective so make sure that your Orlando Realtor is active every day maximizing exposure to their properties.
The Realtor that you choose should also have a strong online presence through their own websites and social media profiles.
The following are three vital tips to help you find the right real estate agent for you.
1- The right Realtor may have information on financing that may allow you to progress through the process more effectively and avoid the challenges you may normally encounter.
2- See if they have online capabilities like virtual tours and walk-throughs which will do wonders when showcasing the property and making it available to the largest amount of potential buyers possible.
3- Always ask if they have online testimonials are positive reviews they could direct you. Having the right real estate agent in your corner can save you time and money so make your choice wisely.
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Buying a short sale home can potentially land you a deal of a lifetime. It can be a long drawn out process but if you can mange to hang in there until the end, chances are that you’ll be glad you did.
Our brokerage specializes in doing short sales for distressed homeowners and I can’t tell you how many times we’ve lost buyers potential buyers because they get tired of waiting on the lenders.
The flip side to that is we’ve also had many clients that were willing to hang in there and see it through to the end. By doing so they ended up with a heck of a deal.
If you’re one of those people willing to stay the course throughout a short sale process, then here are some tips that might help see you through.
An experienced short sale realtor can quickly provide you a list of all the properties that are listed as short sales in the area that you’re interested in. They can also advise you on negotiating an offer. “Short sale specialists” can easily be found on Google.
Interview at least three realtors and ask them to provide you with references from past clients.
2-Do A Title Search
It would be wise to do a title search to find out how many liens are on the property. In a short sale, each lien holder must be dealt with and satisfied before you can close on a property.
Your realtor should be able to help you with this because if they close a lot of deals with the same title company then they should be willing to provide a quick title search either free of charge or at least at a discounted rate. Title searches usually cost between $200-$300.
3-Be Patient
There are many moving parts in a short sale but there are two main things that need to happen. The sellers must first agree to your offer, then the lender must also agree to the offer.
There’s a whole lot of paperwork going back-and-forth between the sellers and the lender which can sometimes take several months to process depending on who the lender is. If there are second and third lien holders, it can take even more time.
4-Have Your Financing Ready To Go
It’s always best to offer cash in these transactions. This will capture the lenders attention and your offer may get accepted even over a higher offer that depends on financing. However for most people, paying cash for a property is not an option. The next best thing is to be pre-approved by a lender to make sure you can close quickly.
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If your lender doesn’t agree to a short sale on your house, there are several other options available to you.
One option would be a “deed in lieu “, which is basically a voluntary foreclosure and all that happens is that you sign the property back over to the bank without going through the whole legal process involved with a foreclosure. You should be aware however that a deed in lieu will show up on your credit as a foreclosure.
Another option available to you, if you’re interested in trying to keep your house is a loan modification. A loan modification is when we try and get the terms of your loan adjusted so that you can afford to keep your home. We do this by either getting your payment reduced or reducing the principal balance or both.
Bankruptcy is also an option to avoid foreclosure. There are 2 different types of bankruptcies, a chapter 7 and chapter 13. In this case you would need to talk to a Bankruptcy attorney, and most of them will give you a free consultation on the initial visit.
I would highly recommend that you don’t take this approach because you are just giving up, and when you give up then you’re giving up all control of your situation to the bank and then they can do what they want at that point.
Also, don’t think that just because you let it go to foreclosure, that you will be free of that debt. Actually the opposite will probably happen and the bank will hit you with a deficiency judgment for the difference between what you owe and what the property sold for at the auction.
So please if you find yourself in this situation, consult with a licensed real estate professional figure out what your best option is and take action.
Feel free to call us at 407-902-7750 or visit us at https://orlandorealtyconsultants.com/short-sales/
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