Real Green Trends

Everything You’ve Ever Wanted To Know About Short Sales and Foreclosures…Its all Happening Here in Miami

                                               

 Today’s South Florida  real estate market presents opportunities for both the investor and homebuyer. 

 

As many of  us are aware, it is difficult to avoid the subject of short sales and foreclosures when discussing real estate in South Florida these days.  While those methods can present incredible opportunity for the purchase/investor, it is necessary to understand the legal aspects of such purchases.

           Short sales  are a pre-foreclosure arrangement with a lender, whereby they will allow an owner to sell a property for less than the amount of the current mortgage balance.  Up until recently, the short sale process has been a frustrating one.  Understaffed banks moved very slowly to approve these type of sales.  A new trend appears to be emerging however.  As the courts of Miami have been flooded with foreclosure actions, the time in which to adjudicate foreclosure matters has lengthened.  As such, the holding costs incurred by the banks with respect to the delinquent properties has increased.  In light of the increasing expenses incurred by lenders in the foreclosure process, banks have been building up their staff for the particular purpose of expediting the short-sale approval process.  The U.S. Treasury has also jumped on board to encourage the short sale by offering incentive payments of $1500 to the home-owner and $1000 to both loan servers and second-lien holders.  As with any investment, the investor must take special care to research his potential short sale purchase.  While a property may be approved as a short sale, do not jump to the conclusion that you are getting the deal of the century.  You must still do your homework to see what is happening with real estate values in that particular area.

               Foreclosures  occur when the mortgagee is unable to make its mortgage payments, and the mortgagor, through its security interest in the subject property, goes through a legal process which will give the mortgagee title to the property.  Once the mortgagee has title, the property will be auctioned and the mortgagee keeps the proceeds in order to recover its investment.  At a foreclosure auction, investors must arrive with certified funds(the equivalent of cash) for the total purchase price amount.  Investors have limited amounts of time to evaluate the property,  and usually can only see its exterior prior to the auction.  In addition, other liens and taxes may be attached to the property.  When considering this type of investment, the investor must understand these risks and consider an adjustment to the purchase price to account for these potential increases in the cost of the investment property.

                    The investment possibilities are endless right now in Miami.  With the right research regarding a property, you can buy for use or investment a property greatly under previous market values.  When making these kind of investments, take great care in choosing your realtor.  Make sure that the realtor understands the market, the rental values and the potential sales value of your property.  Also, as much as time allows, have research conducted to ascertain what potential liens may have attached to the subject property.  The more knowledge you have regarding a property, the more risk you take out of your investment.

Any questions???   email me at   Debbie@the-beach.net or leave a comment and I will contact you back.

 

              

 

 

 

 

This entry was posted on Tuesday, November 10th, 2009 at 9:00 am and is filed under Bank Owned Properties - Foreclosures, Legal Trends. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. Matthew Griffin said at November 12th, 2009 at 10:46 am

   Really we should be aware the legal aspects of such purchases, to avoid problems the lender.

2. Adriana Faerman said at November 12th, 2009 at 1:33 pm

   Hi Matthew:
   You are right…there could be all sorts of recorded and or unrecorded liens on a property that the new owner will be held responsible for..additionally unbeknown to the new owner there could actually be somebody actually living in the property and a legal proceeding called writ of possession would need to be instituted. Lots of money to be made in the foreclosure world but there are sometimes hidden costs that the buyer needs to be aware of and prepared for. Please let me know if you have any further questions.
   Debbie

Leave a Reply

Name (required)

Email (will not be published) (required)

Website