Short Sales

Short Sales

There’s a lot of talk today about “Short Sales”. Are they good or bad and for whom? Having sold and closed hundreds of foreclosed properties, I have had the opportunity to become involved with pre-foreclosure sales, also known as “Short Sales”.
Let’s define a “Short Sale”. When a homeowner can no longer afford the mortgage payments and the mortgage balance is greater than the market value of the property, the homeowner’s mortgage lender is asked to forgive part of the mortgage balance.
Say the homeowner purchased their house in 2005 for $350,000 and obtained a first mortgage of $315,000. The current 2008 mortgage balance is $300,000 and the real market value today is $200,000. After commissions and closing costs the lender will net $180,000 from the sale and accept a loss of $120,000.
Sound crazy? Not at all. Most mortgage lenders are willing to agree to this scenario, because if they have to foreclose, they will incur even more expense and still have to sell the property at the current value ($200,000 today, but maybe less by the time the foreclosure is finalized). The seller must be willing to submit financial documents substantiating their inability to pay the current mortgage and should consult an attorney and their financial advisor before entering into a “Short Sale”.

“Short Sale” buyers can obtain a home at a bargain price if they are patient and prepared to close quickly once the seller’s lender agrees to the sale. I have seen the current lender take two months or more to respond to the sales contract offer once it is submitted. The lender is not lazy or ignoring the offer. They will have the property evaluated by at least one, and maybe more, realtors and/or appraisers before they submit the offer to management for a response. These losses are substantial and they are justified in verifying all information submitted to them. Once the offer is accepted by the lender, they will ask to close the sale quickly (less than 30 days) and the buyer should be prepared to accommodate this request. All inspections, new lender appraisals and buyer loan processing should be lined up ahead of time and ready to go at a moments notice.

The real estate agent involved with the sale should be aware of the time lines, be prepared to provide both the current lender and the buyer’s new lender with all requested information and understand pricing and justifying current market values to the principals and lenders.

“Short Sales’ can be a savior for some sellers, a vehicle to obtain a true home bargain for buyers and an outlet for lenders to dispose of non-performing loans.

Vero Beach: 'Florida like it used to be'

Vero Beach: 'Florida like it used to be'
New and remodeled hotels stand to put 'Florida like it used to be' on the trendy destinations map.
Posted on Sun, Apr. 20, 2008
BY PHIL LONG
plong@MiamiHerald.com
COSTA D'ESTE

The Estefans' chic new hotel, set to open early this summer, calls itself a ''personal luxury resort'' that is part of the Benchmark hotels group. Amenities include fitness center, spa and the Oriente restaurant featuring Cuban cuisine with Spanish and Creole touches. Room rates will start at $199 in low season and $249 in high season, though introductory rates may be offered.

• Info: 772-562-9919, www.costadeste.com.

When music icon Gloria Estefan purchased and remodeled her first hotel outside Miami-Dade County, she bypassed trendy haunts and the forever-regal Palm Beach in favor of quieter, less well-known Vero Beach. Her 94-room Costa D' Este Beach Resort is slated to open by early summer.

Estefan isn't alone. The stylish Caribbean Court Boutique Hotel opened last summer, complete with luxury amenities, an award-winning chef and the popular Havana Nights piano bar.

And the stately, West Indian-flavored Vero Beach Hotel and Club opened earlier this year late last year; the 83-room oceanfront resort recently was awarded a four-diamond rating from AAA.

Though Vero boasts beautiful homes, mansion developments and chic country clubs, ''from a hotel standpoint, there wasn't anything that was really comparable to the level of taste and sophistication that the rest of Vero enjoys,'' said Peter Serena, Vero Beach Hotel's general manager.

UPSCALE UPGRADES

The days of ''Zero Beach,'' as the town was dubbed during more staid times, a flurry of building hit Vero in the aftermath of two serious hurricanes in 2004. Upgrades include recent expansions to the Riverside Theatre, which hosts performances and speakers like businessman Steve Forbes and comedian Paula Poundstone, and Vero Beach Museum of Art, currently hosting an exhibition of portraits by John Singer Sargent, Alex Katz and other American artists.

Yet this seaside town is still a cozy village where hotels are about the only towers allowed. People come not because it's anything like the rest of Florida, but because it isn't.

Vero ''is like Florida used to be'' said recent visitor Dawn Hirsch of West Palm Beach.

Meticulously tended flower beds edge Ocean Drive, where upscale shops sit just steps from the beach. Live oaks shelter homes and businesses fronted by long grassy carpets. The town has a staunch, timeless feel about it -- much as it must have when Waldo Sexton built his famously funky Driftwood Resort here in 1935.

BEACHFRONT DINING

The Driftwood's beachfront restaurant, Waldo's, still packs in the locals and tourists alike, as does the long-popular Ocean Grille that overhangs the beach. The barrier island's western edge, on the Indian River, is dotted with breezy seafood eateries. West across the bridge sits the smartly restored downtown, less glamorous than the eastern shore but home to good restaurants and shops.

The area's quiet money quotient -- Wilmington Trust, Northern Trust, AG Edwards, Edward Jones and Mellon Wealth Management all have offices here -- spills into community amenities that serve tourists, too. Along with the Art Museum and theater are nature attractions like the Environmental Learning Center, McKee Botanical Gardens and Pelican Island National Wildlife Refuge -- the first in the nation.

And then there are the people.

''You go up there and people are just nice, they are pleasant,'' Maria Fioravante, who lives with her family in Coral Gables and has a home north of Vero Beach.

Says Costa D'Este general manager Andrew Zinni, ``When you're coming up from Miami for the weekend, you are coming to experience the whole Vero lifestyle.''


Dick Davis

Dale Sorensen Real Estate, Inc.

Vero-Beach-Florida-Homes.com

HomesOfVeroBeach.com

Amendment 1

Amendment 1 The Florida Department of Revenue is the best source for up-to-date information, including documents and forms related to portability, the additional homestead exemption and the tangible personal property tax exemption. Here’s a quick overview:

Increased homestead exemption. Homeowners will receive automatically. No action is necessary.

Portability is retroactive to Jan. 1, 2007. Clients who sold their homestead last year and bought a new home that qualifies as a homestead as of Jan. 1, 2008, must apply by March 1, 2008, to their county property appraiser to transfer their Save Our Homes benefit. A portability application form is available from the DOR Web site.

$25,000 exemption for tangible personal property. This tax applies to businesses and certain owners of mobile homes. It does not apply to homestead property. In order to receive the exemption, taxpayers subject to the tax must file a tangible personal property return with their Property Appraiser by April 1, 2008.

10% annual assessment cap for non-homestead property. The 10% cap does not apply until next year. No action is necessary in 2008.

Dick Davis
Dale Sorensen Real Estate

Vero-Beach-Florida-Homes.com
HomesOfVeroBeach.com

The upside of Florida real estate

There's a lot of doom and gloom in today's news. Let’s take a look at some of the opportunities and positive indicators for the future of Florida’s real estate market.

• Long-term economic and demographic trends continue to favor Florida. By 2010 it has been forecast that Florida will be the third most populated state in the country. Florida’s population is expected to increase about 75 percent by 2030. Florida demonstrates a long history of strong growth. It has been one of the 10 fastest-growing states in the U.S. for each of the past seven decades, and often it has been in the top four, according to census data. Population growth will continue to provide a foundation for other economic growth such as new jobs and growing incomes. All of which is good for real estate.
• People are continuing to move here. It’s estimated that 1,000 people move here every day (http://www.stateofflorida.com/, “Florida Quick Facts”). No wonder Florida’s population has grown 13.4% since 2000, compared to only 6.4% for the rest of the country, according to census data.
• Five of the top 15 cities in the Milken Institute’s 2007 “Best Performing Cities” survey, which looks at sustainable economic growth, are in Florida, including the No. 1 city, Ocala. A total of 13 Florida cities are in the top 50.
• Low unemployment. Almost 120,000 jobs were created in Florida in the year between August 2006 and August 2007. Florida’s unemployment rate has hovered at or under 4% for a long time; and was 4% in August 2007, according to the latest data available from the U.S. Department of Labor. That not only puts it well below the national unemployment average, it also is the lowest unemployment rate among all ten of the most populous states.
• Jobs are plentiful, and that trend will continue. A recent study by Bizjournals called “Where the Jobs Are” found that 7 of the hottest 15 job markets are in Florida.
• Let’s take a look at the weather. If you think the hurricanes we experienced are going to have long-term effects on the Florida real estate market, consider this tidbit from Fortune Magazine. It recently reported, “Economists and geographers who have studied how natural disasters affect real estate values have generally found there to be no lasting impact.” Example #1: When Hurricane Hugo hit Charleston, S. C., home values were actually higher one year later. Example #2: That same year, 1989, a huge earthquake made big news in San Francisco, and the same thing happened—house prices went up.
• Grant Thrall, a professor of what’s called Economic Geography, explains this phenomenon this way—residents move away and home prices fall only when natural disasters start becoming regular occurrences in an area, not when they happen periodically. And while the hurricane seasons of 2004 and 2005 may still be fresh in our minds, the fact is, historically it was a fluke. Eight storms hit the Florida mainland in those two years. But if you look back at the 50 years prior, only six Category 3 or higher storms hit the Florida mainland in half a century.
• Gov. Charlie Crist, state lawmakers and business groups are committed to finding real solutions to the escalating costs and shortage of property insurance in Florida, as well as much-needed property tax reform. Florida Realtors will continue working closely with lawmakers to help resolve these complicated issues and keep the state’s economy moving forward. For example, 2007 FAR President Nancy Riley sits on the governor’s property tax reform commission, and 2005 FAR President Frank Kowalski served on the governor’s insurance reform commission.
• Interests rates currently are still low, on a par with interest rates in the 1960s. And thanks to the Fed’s recent rate cut, we’re already seeing lower rates on home equity and mortgage loans, including jumbo loans. The Fed’s action effectively increases the number of homebuyers able to make a purchase, which should increase demand, and also help support home prices. Home prices continue to stabilize, inventory is plentiful and homebuyers have lots of options.
• Over the past five years, the average homeowner has seen an increase of 50 percent in value, according to the National Association of Realtors® (NAR). Here in Florida, the statewide median home price has shown an increase of 52.5 percent from November 2002 to November 2007, according to FAR records. NAR housing industry analysts project that prices will rise about 2 percent next year, and in coming years, average home price appreciation should return to historical averages of around 6 percent.
• Florida is a great place to live and work. According to Enterprise Florida Inc., the Sunshine State has one of the nation's strongest tourism industries; it is fourth in the nation in high-tech jobs; is the third largest exporter of high-tech goods and services; and is ranked as one of the best states in the nation to be an entrepreneur.
• Orlando-based economist Dr. Hank Fishkind recently said in several media reports he believes that “the worst of the so-called housing crisis has probably been mitigated by the actions of the Fed. Recovery will take a while, but it has begun.” Another economist, Dr. Lawrence Yun, chief economist with the National Association of Realtors, predicts that the Florida housing market will get stronger in 2008 and will be booming again by 2010.
• And let’s not forget the things that brought people to Florida in the first place, and will continue to attract them – beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It’s no wonder that Florida’s combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put us at the top of Harris Poll’s “most desirable places to live” survey.

Dick Davis

Dale Sorensen Real Estate, Inc.

HomesOfVeroBeach.com

Fishkind: Florida’s housing market now in slow recovery

ORLANDO, Fla. – Aug. 30, 2007 – Popular perceptions about the housing market are wrong, says noted economist Hank Fishkind, who believes the market reached bottom a few months ago. Fishkind looks for trends in real estate statistical releases, and says that things may not be great but there’s also no indication that they’re getting worse.In his weekly radio address on WMFE in Orlando, Fishkind said he constantly encounters audiences worried about the housing market and any financial disruptions it could cause. “The variance between the real economic data and people’s perceptions was enormous,” Fishkind said. “While home starts have dropped 36 percent from their peak, starts have stabilized over the last six months with no further erosion. Friday’s report on new home sales confirms that the market has bottomed out. Sales actually increased 2.7 percent to an annual pace … and the inventory of new but unsold homes declined.”Fishkind agrees that sales of existing homes are down, but also looks at the amount of the drop and recent changes. “Importantly, the sales of existing homes were again stable for the seventh month in a row,” he says. “While recovery may be some time off, it is clear that Florida’s housing markets have bottomed out.”Fishkind does not believe Florida home prices will decline any further over the next 18 to 36 months, but he does expect them to remain generally flat, depending on where they’re located in the state.“The more overbuilt markets will take longer to recover,” Fishkind says. “But fears that prices will drop significantly are unfounded. And so is the pervasive panic. The economy is stronger than the reports about it.”© 2007 FLORIDA ASSOCIATION OF REALTORS®

Dick Davis
Dale Sorensen Real Estate
HomesOfVeroBeach.com

Hank Fishkind: Other economists wrong – housing on slow upswing

ORLANDO, Fla. – July 26, 2007 – Economist Hank Fishkind calls other economists’ dire warnings and negative news about the housing market overblown, and says that, outside of Miami’s condominium market, the state’s housing markets hit bottom months ago and are now on a slow return to normalcy.Fishkind, speaking Tuesday on his radio talk show, pointed to recent stories released by respected economists. Last Friday, for example, Bloomberg news published a story with an ominous headline – “Miami condo glut pushes Florida’s economy to brink of recession.” It quoted Moody’s/Economy.com’s Mark Zandi who predicted Miami condo price drops as much as 30 percent and a state recession perhaps by October.“There is no doubt that the Miami condominium market is severely overbuilt, and that there will be sharp price drops and massive defaults,” says Fishkind. “But, this is no surprise to anyone who has followed this market.” But, he adds, “It is also important to note that Florida’s housing markets, outside of Miami’s condo market, have hit bottom months ago. The closing volume for new and for existing homes has stabilized.”Fishkind doesn’t predict a huge upswing in closings, but “they are no longer declining. Therefore, we have already seen the worst for this cycle. There is no evidence of sharp price drops anywhere in the state, and there is no reason to expect any such drops outside of Miami condos. Population growth is holding up well as the state continues to attract large volumes of retirees and working families looking for jobs.”Fishkind says that rising gas prices could impact consumer spending more than expected, but he calls that a nationwide problem, one that “Florida will ride out … better than most other places.”Source: WMFE Radio News, 90.7 FM/Fishkind & Associates Inc.© 2007 FLORIDA ASSOCIATION OF REALTORS

Dick Davis
Dale Sorensen Real Estate
HomesOfVeroBeach.com

Business

Florida is one of the best places to do business, ranking seventh in the 2007 listing of business-friendly states by Forbes.com. Criteria considered included job and income growth, living costs, and educational achievement, as well as projections of job, income, and gross state product growth.