Central Florida Short Sales: January 2011

It depends. In Florida you have to have a real estate license to be compensated for a real estate transaction. There are a couple of exceptions (F.S. 475.011) but they do not include negotiators.

Florida Statutes Chapter 475 state:

You must have a real estate license if you are........

• ...a person who, for another, and for a compensation or valuable consideration directly or indirectly paid or promised, expressly or impliedly, or with an intent to collect or receive a compensation or valuable consideration therefor, appraises, auctions, sells, exchanges, buys, rents, or offers, attempts or agrees to appraise, auction, or negotiate the sale, exchange, purchase, or rental of business enterprises or business opportunities or any real property or any interest in or concerning the same,

In fact, conducting the services of Real Estate, for a fee, without a license, is a 3rd degree felony in Florida.

And, in order to receive a commission rebate you have to be either the buyer or the seller.

• Florida Administrative Code rule, 61J2-10.028(2) provides “[t]he sharing of brokerage compensation by a licensee with a party to the real estate transaction with full disclosure to all interested parties is not considered a violation of Chapter 475, Part I Florida Statutes.”

Sooo......if you're not a licensed broker or an attorney quit asking me for compensation. If the short sale lender  or seller wants to hire you to handle their negotiations then I suggest they pay you. I'm not. Is that clear enough?

What say you? Are you paying negotiators out of your commission without doing your homework to make sure it's legal?

Are you facing foreclosure in Florida?

Hi folks. I LOVE successful Short Sale closings. This one had a few issues but I was working with an awesome Buyer's Agent, Evelyn Broxterman, with Keller Williams in Lakeland Florida, she was able to keep the buyer on board for 6 months!! Evelyn is also one of our Short Sale Superstars.

The property:

4 bedroom 2 bath single family home located in Lakeland Florida. It was bought new in 2005 for $190,000 as an investment property.
Liens:

• Mortgage with Bank of America for $170,000

• HOA lien for $2,500

Hardship:

Loss of income due to rents dropping and no longer able to find a tenant.

Issues:

This property was placed on the market in May of 2010. It had actually been on the market for several years with another company. For whatever reason they were never able to get it sold.

We placed the property under contract in exactly 60 days. Then the games began. The transaction was submitted through the Equator system. After about 45 days BofA came back asking  the seller for a $2,500 cash contribution and a $5,000 promissory note. We negotiated this down to just the $2,500 cash contribution and all was well......we thought!! Bank of America issued the written approval asking for the $2,500 but now they not only kept the note in the deal but raised it to $15,000!! YIKES! No matter how hard we tried they would not remove the note.

Soooo......I wrote the investor, FannieMae, a letter seeking help since they were the Investor involved in the transaction. Unfortunately they wouldn't help and sent me back to Bank of America.

We kept pushing and pushing and fianlly Bank of America agreed to remove the note requirement and do the deal with the Seller contributing $4,000 in cash. The Seller agreed and the transaction closed.

The property sold for $120,900 and Bank of America accepted $113,000 on the $170,000 that was owed. Or 66 cents on the dollar. Do you need help with your Florida Short Sale?

Tutas Towne Realty has already successfully negotiated Short Sales with the following Lenders.

• Chase
• Sun Trust
• GMAC
• Wells Fargo
• Bank of America
• US Bank
• PNC Bank
• Citi
• HomeEq
• Fifth Third Bank
• ING Direct
• GreenTree
• Capital One
• ASC
• First Horizon
• E-Trade
• Transland Financial
• USA Bank
• IBM LBPS
• Nationstar

Can we add you to our list of successful Short Sales? 

Are you facing foreclosure in Florida?

Hi folks. I wrote an article a few weeks ago titled "If You're Going To Work Short Sales.....Know How To Get Paid" It was a simple post basically just giving agents a few ideas on how we can get paid when the lender/investor wants to slash the real estate commission. Pop over and give it a read if you haven't.

In the comments section the conversation made it all the way around to POC (paid outside closing) items on the HUD. There are a couple of folks who seem to be having difficulties with POC items and Short Sales. Specifically when it deals with payments to junior liens.

As agents that work short sales know....it is quite common for a 1st lien to state in their approval that they will only give, for example, $6,000 to the junior lien when the junior lien refuses to approve anything less than $12,000. This can create a standoff if you aren't prepared to handle it.

There are several options available:

• Negotiate. This should be the first line of attack. Keep pressing the matter. Escalate the file to management and keep asking for a compromise. They may give in.

• Have the Buyer pay the difference. The Buyer could very well pay the extra $6,000 as an added expense on their side of the HUD.

• The Seller can bring the extra $6,000 to closing and pay the additional $6,000 as an expense.

• The agents could pay. Or any combination of agents, buyer and seller.

The debate I have been having is how to show this on the HUD1. The folks I have been debating with swear that if this extra money shows up on the HUD that the 1st lien holder will want it. In fact they went so far as to say it was ILLEGAL!! Of course they are not able to back up their statements. Just opinions. That happen to be wrong.

When the 1st lien holder states that they will only allow the junior lien x amonut of money what they are really stating (most of the time) is ".....allowed from the proceeds of the sale". 

This means than any other party may pay the amount needed. It can be on the HUD as an expense item or a POC item to either the Buyer, Seller or both.

****RESPA requires that POC items show where the money is going. I am not aware of any limits on how much these amounts can be or how many POC items can be on the HUD.

So don't be thrown off your game when you hear "We won't allow" from the short sale lien holder. Just negotiate as far as you can then figure out a solution. Does this make sense?

****Now folks I am NOT a RESPA expert. Nor am I an Attorney. So please do your own homework. And if you know something I have written is wrong please come back and school me so I can learn. Just bring facts NOT opinions. If you can't find anything to back up your stance after days of trying then that's your clue that you may just be wrong.

Are you facing foreclosure in Florida?

Hi folks. My partner Wendy posted this article yesterday explaining how there is not one "Flight Plan" when it comes to Short Sales. Each transaction is different with it's on set of challenges.

Wendy and I are hoping that our new Short Sale Agent Training class launching in a few weeks will help agents have a safe landing when working Short Sales.

The destination? A successful closing

Hi folks. Last year I had a closing for one of my Orlando Short Sale listings. This particular lender required all parties, including the agents, to sign an Arms Length Transaction Notice. This notice basically states.....well here it is. Read it for yourself.

Of course as an experienced Orlando Short Sale Agent and negotiator I explained this notice to the Seller not only at time of listing but also when it was received and before it was signed. It wasn't an issue as the Sellers were moving anyway and they certainly didn't know the Buyer. All parties agreed to the Arms Length Transaction Notice and signed it. Shortly thereafter the transaction closed and all was well.

Recently, and several months after closing, I was driving around and bumped into the Sellers. They were standing in the front yard of their old house. The one we did the Short Sale on!!

I pulled over to say "Hi" only to find out that they did not move and had signed a lease with the Buyer. I guess this all went down after closing. YIKES!!!

So what do we do now? Will the lender find out? Can I be held liable for an act I wasn't aware of? Can the Short Sale be rescinded?

Are you facing foreclosure in Florida?

Hi folks. Be careful what you sign. The Short Sale Addendum to the Purchase Contract is a VERY impotant document. Most agents in Florida use one of the 2 addenda below.

As Richard points out there are vast differences in the two. As your Florida Short Sale Broker I will make sure that the right addenda are used and that the Short Sale Purchase Contract will protect you.

And since I am NOT an Attorney and cannot give legal advice I will let Richard's explanation below do it for me.

Are you facing foreclosure in Florida?