Nobody knows Miami Beach Real Estate better than the Condo Queen!

There are so many questions out there when it comes to short sales.  What percentage off the sale price can you expect to get?  As a seller, do you owe taxes on short sales and how do short sales affect credit?  In my Info Guide to short sales I will continually be updating the info as it changes all the time.  The main thing to remember about short sales, is the they are all decided on a case by case basis by the bank.  There are no guidelines to follow, no industry rules of thumb.

This is how short sales work.  Let’s say a person bought a condo in 2003 for $185K.  In a year or two, as the market was appreciating upward at never before known speeds, the owner decided to refinance.  He took another $50K out of the property at that time.  Now the owner owes $235K.  The owner spent that money improving the property.  Now, in 2008, the owner loses her job.  She tried everything to keep up with the payments, but she just can’t do it. She falls behind on her payments.

This is the time that the owner should contact the bank about a short sale, with the help of her real estate broker.  The reason why it makes god sense to work with a real estate professional on a short sale is this.  First, as a broker I am licensed by the sate and I have to adhere to a code of ethics.  I carry Errors and Omissions insurance and I have way too much at stake to not document everything properly.  I would never consider anything that would be constituted as fraud which would jeopardize my livelihood or my license and put my entire career at risk.

So, now the owner is working with the bank to do everything they can to handle the situation responsibly.  What the owner and the broker together have to do is work with the bank to come to a price (that will fall "short" of the amount owed to the bank) and keep the unit from being foreclosed upon.  The division of the bank or lender that one must negotiate with is called the loss mitigation department.  Together, the owner and the broker will build the case to show the entire situation, including length of time the property has been listed, showing comps in the area with quick sale appraisals, and Broker Priced Opinions (BPO's).  The owner will provide a financial statement, bank statements and tax returns.  Everything is taken into consideration when you are building you case and it requires a lot of time and energy to do it right.