We are Miami's Short Sale Experts

STOP Miami Foreclosures HOTLINE (786) 406-1757

"The seller must stop making payments on their loan." Not necessarily. We have negotiated dozens of short sales where the seller has not missed any payments, and was not in default. This is very important if you want to retain a better credit standing and avoid negative bankruptcy charges on your consumer credit report.
"The seller is in foreclosure." Not necessarily. It is possible to have missed payments and not be in full-blown foreclosure. The sooner a homeowner seeks the advice of a professional Realtor the better it is to avoid foreclosure proceedings and negotiate a possible shot sale.
"Buyers will not want to make offers on short sale property." Not true. Occasionally buyer's agents are reluctant to represent offers on short sale property. Often times, listing agents will take on short sale listings when in reality they have no knowledge base or skill set to successfully negotiate the lower payoff. A shrewd agent will call the listing agent and make sure they are competent to complete the process, and then submit an offer.
"Financial hardship is the only reason a lender will accept a lower payoff." Not true. There are many potential reasons a lender will allow a lower payoff. One such example is that the seller must relocate for some reason, such as to care for a sick relative, or due to employment requirements. Especially now some banks are cash-strapped and they are willing to accept a loss to get money back into the treasury (this goes predominantly for smaller banks and loan servicing facilities. Big-name-banks are different and most have already recovered and are strengthening their positions in the market)
"A short sale where there is a first mortgage and a second mortgage will not be approved." Not true. While this scenario requires diligent negotiation, many 2nd mortgage holders will accept as little as $1,000.00 in lieu of a full payoff.
"A short sale means that the escrow period will be short." Generally no! Depending on how much negotiation can be completed in advance, a typical timeline for lender approval can be as little as 2 weeks or as long as 2, even 3 months. Once the lender approves the lower payoff, escrow is opened and the transaction timelines proceed from that date.
"Short sales are a bargain!" Banks do not give property away. They base approval on recent sales comparables, and actually retain the services of a local agent to perform a BPO (aka, Broker Price Opinion: The BPO includes estimate of repairs to obtain fair market value, neighborhood information, and value estimate (90, 120, 180 day marketing time for "as is" and "as repaired" values) and all comparable sales). We are such a local brokerage that is hired by bank to provide BPOs. While we do believe in general it is possible to get a lender approval for a property several percentage points under its market value, it really depends on the property and or condominium community. We have closed in the month of October a Pre-Approved Short Sale in North Miami Beach, where the mortgage was over $333,000.00 and the final sales was approved by the bank for $171,000.00.
"The $700 bailout plan will help me to keep my house and banks are not going to foreclose on my property as they will receive funds from the Treasury." Not true. This is dangerous thinking. The contrary is true. Most homeowners who cannot afford to make mortgage payments may lose their homes as banks become stronger and less willing to negotiate.
"The seller of the property can make money from the short sale." Not true. The lender will REQUIRE that the seller nets $0 from the sale.

If you are in need to arrange for a Short Sale, our understanding agents will be knowledgeable, professional, helpful and courteous to lead you through the process and negotiate the best possible solution for you.

If you are an investor, we have approved Short Sale Opportunities. Please do not fall for those offering so called "Foreclosure Lists". Keep in mind anything that makes a foreclosure list is perhaps not considered "investment worthy" by the pros and will eventually go to a hyped-up auction. Realtors and Real Estate Investors have access to data that is being provided to us on a daily basis, where we can see who did not make a mortgage payment and or who was late. We have engaged a professional marketing company that immediately offers our services to such homeowners and over 70% take advantage of our expertise and engage us to negotiate a short sale agreement with their lender.

In Miami, please call Brosda & Bentley Realtors HOTLINE:
(786) 406-1757 for a free consultation.

Distressed Properties: The Industry Responds

By Maria Patterson

RISMEDIA, August 12, 2009-The statistics are sobering. According to RealtyTrac's Midyear 2009 U.S. Foreclosure Market Report, more than 1.9 million foreclosure filings were reported on more than 1.5 million U.S. properties in the first half of 2009-a 9% increase from the previous six months. Lurking in the shadows? A large wave of bank-owned properties yet to hit the market. For real estate professionals, the distressed property environment has given new meaning to being at the "center of the transaction." Never before has there been a more critical time for agents and brokers to step forward.

"In these trying times, the future of our industry may be measured by the way we perform in this crisis," says John Featherston, CEO & publisher of RISMedia and chairman & co-founder of RISMedia's Top 5 in Real Estate Network. "In this new age of residential real estate, the hundreds of thousands of homeowners facing foreclosure have become the focal point of our industry. Consumers are turning toward real estate professionals for answers and solutions. A property that goes into default or a distressed situation affects all the properties in the community and affects the consumer's overall acceptance of the product we represent, which is a homeowner. The individuals we have interviewed for this story represent how several key leaders have responded to the crisis."

Early Adopters

For some, dealing in distressed properties is not new territory. These are the real estate professionals who are now leading the charge in short sale education.

"Our real estate business focused on short sales and foreclosures, so we saw what was coming," says Alex Charfen, co-founder, along with his wife Cadey, and CEO of the Distressed Property Institute in Austin, Texas, and the CDPE (Certified Distressed Property Expert) designation for Realtors.

"We had the privilege of sitting with hundreds of distressed homeowners and helped take them from complete panic to walking away from the closing table with their problems resolved," recalls Charfen. In its first year, the Institute grew to 1,500 members, and just one year later, is now at more than 9,000 members.

"If structured correctly, a short sale can provide families with a life-altering option to foreclosure," says Dave Liniger, chairman and co-founder of RE/MAX Intl. "The administration now recognizes this and has specific plans to streamline the process. As a result, the number of short sale transactions should increase substantially. I've been encouraging RE/MAX sales associates to obtain the CDPE designation to learn how to expedite short sales. Since March, we have registered over 5,000 Associates and the results they are seeing are nothing short of astonishing."

Stacy Spickes, co-founder, along with her husband Michael, of Austin, Texas-based America's Home Rescue, also had first-hand experience with short sales as Realtors working the Austin market. Living through the dot-com bust of the early 2000s, the Spickes quickly became front runners in working with distressed homeowners. Early in 2006, America's Home Rescue rolled out a comprehensive, nuts-and-bolts, advanced short sale training program, and then in 2008, officially launched the Certified Default Resolution Specialist (CDRS) designation program.

According to Spickes, "Realtors play a huge part in getting the market back on track and reducing the number of homeowners going into foreclosure."

"Our driving force is to put the homeowner first," says Charfen, "so that when an agent walks into someone's home they can help the homeowner figure out what solution they can most benefit from-whether that's a forbearance, a deed in lieu, a loan modification, etc. Agents can help a lot of people stay in their homes."

In the Trenches

For agents, however, working in short sales and distressed properties is not only a chance to help homeowners, it is often a must for survival in today's market.

"I feel I need to follow the money and go where the action is," says Top 5 in Real Estate Charter Member Rosemary West, team leader at RE/MAX Realty of Joliet in the Chicago area. After earning her CDPE designation, West began actively marketing her expertise on Realtor.com. "I implemented two banner ads running in two counties that said, 'Call me about foreclosures, short sales and bank-owned properties.' We get tons of leads every day on those two ads," she reports.

For Top 5 Member Greg Mancini of Prudential Florida Realty in Port St. Lucie, Florida, working in distressed properties started out as a way to differentiate himself when he first started in real estate in 2004. "What started as a specialty to attract people is now my entire business," says Mancini.

"You have to develop a pool of buyers and send regular e-mails a couple of weeks before the property is getting ready to go on the market," advises Mancini. "In this market, it's important to let people know ahead of time."

For Jim Bass, a Top 5 Member from the Jim Bass Group of Real Estate Teams in Frederick, Maryland, who holds the CDPE designation, short sales is also familiar territory. "Our market was upside down in the early-to-mid '90s as part of the aftermath of over appreciation in the '80s. I've been dealing with short sales for over a decade."

Being properly prepared to handle distressed property sales is essential for agents, as the challenges involved are many. "When I go on a listing, I do a detailed seller assessment (provided in Charfen's course)," says West. "I don't proceed with any short sale listing until I go over this assessment. I have to know what the seller's expectations are and what their motivation is."

Agents handling distressed properties will also need to monitor changes in state and local regulations that impact the process. As Bass says, "When it comes to short sales, there is no constant-it is a moving target."

The Reality of Short Sales

In tackling short sales, there's a lot of perception versus reality to be dealt with, particularly regarding a bank's ability to quickly and efficiently process short sale requests.

"Leadership has stepped up to the plate and federal guidelines are being put in place, which is bringing organization to the conventional short sale process," says Spickes. "We're seeing more of a cohesive, holistic type of effort."

According to Charfen, the delay in closing short sales is often more about the agent than the bank.

"When an agent puts the right information in front of the bank, short sales are getting approved incredibly fast," he explains. "Most agents are listing short sales, not qualifying the homeowner, don't know how to complete the package and are learning on the job when they take on the listing. This process is way too detailed to handle it that way."

Bass agrees: "Everyone looks at lenders as the bad guys when they're really just the go-between. When the agent provides the right information, it streamlines the process for the lender to be able to give the investor all that information."

"Properly trained agents are, without a doubt, helping to quicken the transaction time," concurs Spickes. "Agents need to know what kind of loan they're shorting; what lenders need to net from the short sale; what lenders will and will not approve in terms of closing costs, repairs, etc. This is the information agents need to know so they can go about this intelligently instead of submitting offers and hoping they will stick."

"The notion that short sales are impossible and never get approved couldn't be further from the truth," says West. "It's all about information. If you bring in a file and have every single document ready to go, the bank will put aside all the files that are missing pieces to work on yours."

According to Charfen, while the process might differ slightly from bank to bank, the basic information needed remains the same. "It's the same as being a mortgage broker," he says. "You present your client's information the same way to 15 different lenders, even though every lender might have a different way of getting that loan approved."

The perception that lenders "don't like short sales" is unfounded, says Spickes. "Lenders save thousands of dollars by accepting a short sale versus foreclosing," she explains. "It's all about proper training and all parties working together to streamline the process and the communication."

According to Darryl Davis, president of Darryl Davis seminars in Wading River, New York, and creator of the Certified Short Sale Professional (CSSP) course and designation, "The short sale and modification processes are slower than the foreclosure processand that's a dangerous thing. Agents need to add a good litigation attorney to their arsenal so that when a foreclosure notice comes in while they're handling a short sale, they can hand it immediately to the attorney. If they do that, there's a tremendous amount of defense that will then slow down the foreclosure."

"The best possible service a real estate agent can offer a distressed property homeowner is to encourage them to consult their attorney before proceeding with any particular resolution," says Allan Dalton, co-founder & president of RISMedia's Top 5 in Real Estate Network, publisher of The Four R's of Short Sales. There are currently 40,000 copies of the Top 5 short sale brochure in circulation through Top 5 Members. "Before moving forward with a short sale, homeowners must be sure they've exhausted all other options available to them."

Short Sales for All?

Does the pervasiveness of short sales and foreclosures across the country make working with distressed properties a must for every agent? Not necessarily, say the experts, although education is essential.

"You cannot be a real estate agent in today's market and avoid encountering a distressed homeowner," says Charfen. "Even if you never intend to handle a short sale, you need to have the training and knowledge."

According to Spickes, "In today's market, every real estate professional must have at least a base level of education. This doesn't mean every agent needs to be an expert in short sales, but all of us do need to have a base level of good, solid, nuts-and-bolts training to navigate the current market challenges."

According to Bass, only those agents with the proper training should pursue distressed property business. "There are so many potential liabilities for the seller client, the bank, the real estate professional, the buyerand the rules continue to change. No one can say for certain what the impact on the homeowner's credit report will be, no one can be sure how each individual will be impacted tax-wise. There are a lot of variables."

What Consumers Need Most

Dealing with homeowners in distress puts the relationship skills of agents to the test.

"The first thing you have to do," says Davis, "is manage the emotional state that the homeowner is in. You have to explain to the homeowner that instead of going down the path of foreclosure, they can save their credit with a short sale."

"The biggest challenge is figuring out what the best solution is for the homeowner and helping them move toward that solution," says Charfen. "You must put the homeowner first and then everything else will follow."

"The homeowner is so upset and going through so much," says Davis. "They want somebody to help them take care of things. If an agent comes in and asks the right questions and shows that they know their stuff, the homeowner will immediately trust the agent. This is not about being a better salesperson; this is about being really educated."

"We feel this is such a privilege for the agent to be invited into this very personal space with the homeowner," says Spickes. Helping homeowners stay in their homes is a cause that Spickes and the agents she trains are honored to be a part of.

Distressed homeowners also need someone to put things in perspective. "Many people feel that listing their home as a short sale is an embarrassment," says West. "I congratulate them for admitting they need help-I tell them this is just a house. Don't worry about it-just move forward."

"The fear of being homeless is normally on the tail of some other hardship, like unemployment, a medical threat or divorce," says Bass. "They're terrified and don't reach out to anyone. They are scared and embarrassed. We need to continue to show people that there are options."

The Industry's Responsibility

While brokers and agents are not responsible for the cause, most agree they are definitely part of the solution.

"This market has given agents the opportunity to show up and help people by guiding them through what might be the darkest financial period of their lives," says Charfen. "This is a rare opportunity to become a trusted advisor to homeowners."

"Each and every one of us has the responsibility to get educated and trained to better serve the market and help homeowners avoid going to foreclosure," agrees Spickes.

Agents also have a responsibility to price homes correctly, says Davis. "Agents need to educate home-owners on how to price their property. If they don't listen, go to the next appointment. If every agent took just one listing off the market, that would be a million less properties for sale."

According to Bass, 70% of homes go to foreclosure without any visible request for help. "I believe real estate professionals are keenly positioned to help move this economy forward," he explains. "Each of us owes it to our profession and our community. We must work together to educate people and minimize loss." RE

Questions and Answers

I am looking for a foreclosed property in Aventura, FL. Where can I get a list of bank owned properties?

Asked Sun Sep 28 2008, 02:55 by Saul

Katerina Brosda answered:

Hi Saul,

Great that you are looking into investment properties in Miami (Aventura); there are certainly a lot of opportunities offered out there and the experts agree that it might be a great time to invest now. Sometimes it can be an ideal way to capture a home at a great value, even below appraised market value. For many real estate investors, though, there is a common misconception, primarily the result of misunderstood and falsified media or miscommunicated Internet anecdotes. It is very important to understand when is the best time to purchase a distressed property - in most cases, the real opportunity may exist before the home even reaches foreclosure status also known as Short Sales Opportunity.

For the majority of professional real estate investors, the common consensus is that pre-foreclosure (short sale) is the ideal time to buy an investment property and not when the property is bank-repossessed. Because mortgage companies and lenders are not in the home ownership business, the lender will often work with the anticipated investor in an effort to keep the home away from foreclosure. Once the bank has repossessed a property the game changes. Trust me, banks know exactly what a property is worth and they will not give it to you for pennies on the dollar. Why do you presume so many households are currently struggling with banks to cut a better deal for themselves, to lower monthly mortgage payments and they were and are not successful? Banks carry the property as an asset and not as so often falsely presumed a liability (unless you are dealing with a mortgage servicer, they indeed want to get rid of any property they repossess as quickly as possible, but such properties are very often in a very desolate condition). Especially now, when banks know that they can hold on to these assets for a little longer and probably get fair-market value from the Treasury or affiliated (assigned) investment companies in the next few months spending half of our $700 billion tax dollars to recapitalize.

Consider this: With a pre-foreclosure home purchase (short sale), you will have the opportunity to inspect the property prior to purchase, unlike purchasing the home in a foreclosure proceeding or auction in which no inspection is permitted or at least is very, very limited. In most cases foreclosure sales are as is sales and the bank is not liable to repair or release you from any contract you may have signed with it. I have seen numerous speculators buy these foreclosed properties for pennies on the dollar and then found out that it was virtually impossible to obtain homeowners insurance for the investment they just made.

When you buy pre-foreclosure properties (short sales) the regularly scheduled professional home inspection will ensure that youll know and understand what repairs must be made prior to and after purchase and that your investment will be insurable.

The way we work with our client-investors is that we inquire about exactly what they are looking for, how much cash they are capable and willing to put down and then we start scouting the exact location(s) (neighborhoods) clients prescribe. Keep in mind that you are not the only one out there looking to get a great deal; there are professional Realtors who made this their main business and there are certainly professional investors (individuals and investment funds), subscribing to the same services and techniques as Realtors do and have access to data identifying months in advance who had difficulties in making monthly payments (or is making late payments).

Giving you a list of foreclosed properties many times means this is what others considered not investment worthy thats why it is still out there and it will eventually go to a hyped-up auction. There are once in a while great, overlooked foreclosed opportunities, but they are fairly rare.

For more information, please feel free to call us and our highly specialized team will assist you to find the right property for you.

Brosda & Bentley Realtors
Aventura (Miami)
(786) 406-1757
http://www.BrosdaandBentley.com/

Thu Oct 16 2008, 17:04

Before you start trying to work out which direction the property market is headed, you should be aware that there are markets within markets.

-Paul Clitheroe, famous Australian financial author, television host of the "Money Show", and business man.