Troy Funk, CDPE – Sarasota Short Sale Expert

What do you do after a loan modification does not work? A Sarasota homeowner discusses her journey to find the answers and the decision she makes to complete a Short Sale as well as the emotional and financial relief after the process is over with. We hope her story helps others find the solution they need as well as understand the true benefits of a short sale.

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When facing the possibility of foreclosure, there are many solutions, including Reinstatement, Forbearance, Renting the Property, Refinance, Loan Modification, Bankruptcy, and a Short Sale.

Which of these alternatives to foreclosure is right path to take? Since everyone’s objective and circumstances are different, it’s important to understand the potential consequences of each solution to make the best decision. With a foreclosure, the consequences could be the most severe, negatively impacting your credit, job security and future opportunities for housing – as well as the threat of a Deficiency Judgment.

In many cases, the best possible option may be a Short Sale. Short Sales are generally found to be the least damaging to your credit and the fastest path to financial recovery. Here are some “General” benefits of a Short Sale.

#1 – LOW COST ALTERNATIVE – It normally does not cost you any “out of pocket” expense to complete a Short Sale. Properties sold as a Short Sale are usually sold “As Is” which means there is no expense to repair the property to sell. Your lender also generally pays the real estate commission and all expenses associated with the sale.

#2 – MINIMIZED CREDIT DAMAGE – There is minimized damage to your credit on a Short Sale compared to a Foreclosure. Most short sales will only impact your credit score 80–100 points compared to 250–350 points on a foreclosure.

#3 – FASTER FINANCIAL RECOVERY – Following a Short Sale, a homeowner may be able to secure new financing within 2 years compared to 7 years on a foreclosure.

#4 – PLACE TO STAY - A Short Sale is a dignified solution to a difficult problem. A Short Sale allow you to stay in your home until the property is sold. In fact, a Short Sale can delay a foreclosure. In many cases a lender will delay a pending foreclosure to ratify a pending Short Sale.

#5 – FRESH START – Short Sales give a homeowner a new start. A Short Sale should make the process of finding another property to move into easier – since you will not have to disclose that your prior residence was “foreclosed” on. In addition, the Mortgage Forgiveness Debt Relief Act of 2007 may be applicable to your situation and may give you the opportunity not to pay taxes on the difference between your loan amount and the short sale price.

For more information about Short Sale options in Sarasota, Florida, call Realtor & Short Sale Expert Troy Funk at (941) 957-3737. Troy Funk is CDPE & SFR certified in Short Sales and has been a licensed Real Estate agent in Sarasota, Florida for over 24 years. He specializes in Short Sales and REO / Bank Owned Real Estate in Sarasota and Manatee Counties, and is the head of Keller Williams Realty on the Water at 665 South Orange Ave., Suite 2, Sarasota, FL 34236.

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Countless homeowners facing foreclosure are under tremendous stress and need money.  When deciding to “Walk Away” from their homes, we see many of them realize that their dream of homeownership is about to end.  As a result, many homeowners see an opportunity to strip their houses of anything of value; taking built-in appliances, light fixtures, landscaping, etc. to sell for profit or take with them.   Many times, homeowners will leave the house with excessive junk and will even make efforts to destroy the house.  The question is:  Is this Morally Acceptable and Legal? 

In many cases, foreclosure of someone’s home is a result of circumstances that are out of their control.   Looking out for one’s personal interest may seem to have good merit, providing they are not hurting someone else.   However, they ARE hurting someone else, including themselves.  

For example, I was watching someone I know lose their home to foreclosure.  Before the bank took ownership of the house, the homeowner legally prolonged the foreclosure sale for as long as they possibly could to stay in the house as long as they could without paying.  Before the sale date, the homeowner “Stripped the House” of all the built-in appliances, kitchen cabinets, door knobs, and even removed some of the landscaping.    When the homeowner left the house, they ended up leaving an excessive amount of junk.  Then, they went on a mission to destroy the house.   They did this with their children, friends, and neighbors knowing and watching what they were doing.   Did they get away with it?  No they did not!   They demonstrated their character to the world and left a legacy to their children and the people around them that they were criminals, regardless of whether they went to jail or not.  

In some cases, we have heard of lenders prosecuting owners who “steal” from the property and destroy what becomes the lenders asset.  However, the most tragic aspect of this is that in many cases, it could have been prevented.  Foreclosure is not always the only option when facing Foreclosure.   Homeowners who are able to Short Sale their home before the home is foreclosed put themselves back on the road to “Financial Recovery”  and may be able to qualify to purchase another home within 2 years.  A Short Sale is also preferable to the lender because the homeowner continues to live in and maintain the property until the sale date instead of destroying or abandoning the property if it goes into foreclosure. 

If you are facing foreclosure, talk to a Short Sale Real Estate Specialist in your area to learn of your options for avoiding foreclosure.  For more information on Short Sales and the options to foreclosure, visit www.TroyFunk.com

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A recent article by Leslie Ebersole from Baird & Warner Real Estate in Illinois, points our the recent changes in some banks delaying foreclosures in 23 States.  Florida is fortunately one of those States where many lenders are delaying foreclosures.  If you have a home in foreclosure in Sarasota, Florida this could be good news if you are looking to complete a Short Sale.

As a Short Sale Real Estate Specialist in Sarasota, Floirda, our goal is to help homeowners with Recovery.  For more information on Short Sales in Sarasota, Florida, visit our website www.TroyFunk.com

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In a Short Sale, lenders often request that the buyer and seller sign an Affidavit of “Arms Length Transaction”.

This affidavit usually states wording such as; 

“No party to this contract is a family member, business associate, or share a business associate, or share sare a business interest with the mortgagee”.   Furthermore, there

Are no hidden terms or special understandings between the seller or buyer or their agents or Mortgagee.  The  Buyers and Sellers nor their Agents have any agreements written or implied that will allow the Seller to remain in the property as renters or regain ownership of said property at anytime after the execution of this short sale transaction.  None of the parties shall receive any proceeds from this transaction except the sales commission.  The atransaticn may not involve a third party who received a deed prior to this closing or after this closing and before recording of the deed to the purchaser.   All parties verify that the HUD1 Settlement Statement is accurate and truthfully disclose all aspects of the transaction, that Buyers and Sellers received no payment, credit or other consideration except as shown in the HUD1 Settlement Statement, and the there has been no collusion between the Seller, Buyer, Broker, or any other Person, to misrepresent any fact to the Lender” 

The simple answer to the question, “On a Short Sale, can I sell my property to my Wife, Brother, or my own Company? … The answer is NO.

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As a Short Sale Real Estate Specialist in Sarasota, Florida with Keller Williams Realty, I write a blog almost everyday through Active Rain and get good response from it.  However, the other day I wrote a blog titled: 

 “Before a Foreclosure, Should I take the Kitchen Cabinets, Fixtures, Doorknobs, etc.? “http://activerain.com/blogsview/1880676/before-a-foreclosure-sale-should-i-take-the-kitchen-cabinets-fixtures-doorknobs-etc-

Shortly after I posted this, my e-mail blew up with responses from the Active Rain community and the post quickly became a Featured Blog.  Most of the responses were consistent with my believe, however their was one response that invoked a lot more controversy from an anonymous person.  The responces after his response,  became a lot more passionate.  Thank you, Jayson Holland with RE/MAX for your response, I am giving you credit as I liked your responce the best. 

From this I am “Re-blogging” the best part of the most popular blog I have ever posted on Active Rain. 

If you have a few minutes, please read through this and post your comment.  If you want to spread the word, please “re-blog” this and click on the Facebook “Like” button at the bottom of this blog.   In hindsight this Blog should have been titled “Speak Up America” …  

Response from an anonymous person

Because of the lack of morals and ethics demonstrated by the banks as they systemicly compromised every element of the checks and balances that protected the consumer, they deserve the very worst treatment conceived by man. Frankly, that is exactly what they are doing to the consumer. Every home headed for bank ownership should be destroyed! Rendered uninhabitable! If you need a home, buy via traditional channels or have one build. Now that will be a real economic stimulas.

You are aware the bank had the opportunity to work something out. They simply decided it is better for the bank to collect the bail out money, the mortgage mod money, the mod default money, the FDIC money, the harn money. BAnk of AMerica said, ”Kick the children out of the house and sell it for 1/4 what we may have settled for with the existing owner.”  The banks are still in the greed mode. These blood home they have created should be avoided like the plague. Those practitioners who profit in buying and selling these blood homes should be presented for long enduring public redicule. The marketing of these blood home should be relgated to carnivals and flee markets and not polluting the marketplace where honerable and hard working real estate agents work tirelessly to service home buyers.

You are truly misguided when you think justice is served when morality applies only to one side of the equation. Render them worthless! The banks have profited enough from the tears of children, the anquish of parents, the betrayal of trust.

Response from Jayson Holland:

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In Sarasota, Florida there are many companies and investors stating they will “Buy your house for Cash”.   Many of these companies and investors are not Cash Buyers, they are Speculators.  By Speculator I mean they contract to purchase a property at what they believe to be a great value and while the home they are purchasing is under contract, they actively seek to find their own buyer who will pay them more than what they are willing to pay for the property.  If they are successful in reselling the property for more money before or at the closing of their purchase with the original seller, then they follow through with the sale.   If they are not able to find a buyer willing to pay more for the property before their closing, then they back out of the sale (normally during the time period of the “Right to Inspect” clause in the contract).  

Often sellers who are facing foreclosure and are trying to Short Sale their home don’t have time for games or people that play them as they are on a timeline to sell their property before the foreclosure sale.   There are many ways to protect yourself as a seller of a Short Sale, however one of the best ways is to hire an experienced Short Sale Real Estate Agent in your area.  This person works for you, however is paid at closing by the lender, and they may help you avoid a foreclosure.  For more information on Short Sales, Options to Foreclosure, and how Stop Foreclosure, visit: www.TroyFunk.com.

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We are in a crisis with an overwhelming number of homeowners “Walking Away” and letting their homes go into foreclosure in our market area (Sarasota, Florida).  In some cases, homeowners are stripping their homes of anything that could have value, destroying the home in the process, while abandoning their home and letting the lender foreclose.   This action hurts a lot of innocent people, especially the next door neighbors of the homes in foreclosure.   With a vacant home,  the burden of liability now becomes a burden to the neighbors and neighborhood.   As a home goes through the foreclosure process it deteriorates and becomes an eyesore to the neighborhood, inviting criminals to steal from the property, and devaluing the property values in the area.   As a result, a bad situation becomes worse.   However, I have seen some neighborhoods ban together to help lessen the impact of foreclosure homes in their community in the following ways: 

1.       BECOMING A RESOURCE FOR HELP.   -   This is your chance to shine and be a light in the darkness.  In this generation, it’s not uncommon to live next door to someone, never getting to know their names, who they are, or if they are in need of help.   Communities could greatly benefit by getting back to the values of our grandparents’ generation of ”helping” your neighbors who need help.  Being a resource to help others will not only enrich the lives of others, it will enrich your own life as well.  How could a property owner help his neighbor if they are in financial trouble?  (Read the next point.) 

2.       FIND SOLUTIONS - Even though your home may not be facing foreclosure, it is wise to understand what the options to foreclosure are so that you might help direct those facing foreclosure to resources which may assist them.   Foreclosure is rarely the best option for someone facing financially difficulty.   However, given the stress of facing foreclosure, many homeowners do not seek solutions or wait until it is too late for those solutions to benefit them.    Sometimes a homeowner is too embarrassed to ask for help from their family or friends, however the neighbor is usually the first to see signs of a property owner in need of help.  Knowing some possible solutions and resources for homeowners to consider could help them, given it is offered in a spirit of trying to help and not judge them.  One of these possible solutions could be a Short Sale.   In a Short Sale, a homeowner gets to stay in their home until the property is sold, and is usually relieved of the debt of their mortgage (even if it more than what their house is worth).  The best part of a Short Sale is that it could enable the homeowner to restore their credit in 2 years, allowing them to purchase another home.  Short Sale Real Estate Specialists are normally willing to talk with homeowners in distress for free to help them learn of their possible options to foreclosure and how a Short Sale could help them.  Knowing a Short Sale Real Estate Specialist in your area could be a valuable resource. 

3.       BE PROACTIVE - If your neighbor decides to walk away from their home, allowing it to go into foreclosure, confirm with them if it OK if you maintain the house and keep it up after they leave.  Yes, this means mowing their yard and keeping the exterior of their home up and possibly parking your car in their driveway to give the perception the home is occupied.    This could have a huge positive impact by decreasing crime in your neighborhood and helping maintain the quality of life you enjoy. 

For information on the possible solutions to foreclosure, I have developed a website, www.TroyFunk.com to help educate the public on possible options to foreclosure.   Too often, we see homeowners realize too late that they had options which could have helped them avoid foreclosure.  Knowing the options to foreclosure is not only important to those who are facing foreclosure, it is worthwhile to those who are willing to help others.

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Noted below is an interesting blog on “More International Buyers for Florida”.   In this blog, Sherry Armstrong details stats on International Buyers in her maket area.  In our area, Sarasota Florida, we have also seen an increase of International Buyers.   For photos, detail and information on homes for sale in Sarasota, Florida visit our website at www.SarasotaRealEstateGallery.com

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Foreclosure is nasty and often is something we don’t talk to others about because the word can upset those around us who are facing financial difficulty.  As a result, many people facing financial hardship take the path of least resistance and ignore their problem in the hope it will go away.  When faced with the threat of foreclosure, many people choose to “walk away” and believe they have put their problem behind them and the situation is solved.   However, the consequences of “walking away” and letting your property foreclose can be severe, especially if a foreclosure results in a “Deficiency Judgment”.   A deficiency judgment is a lien that can haunt someone the rest of their life, along with the credit consequences and stigma of a foreclosure. 

So what is the bright side?   There are several solutions to foreclosure and many free resources available to help those facing foreclosure.   One of the best free resources, in your community, is a Short Sale Real Estate Specialist.  A Short Sale Real Estate Specialist will walk you through the process of a Short Sale, represent you, and only gets paid (by your lender) if they are successful in helping you.   

In closing, if you are facing foreclosure talk to a Short Sale Real Estate Professional in your area to learn all the options to avoid foreclosure, as foreclosure is not a good option.

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Recently I had a client with a high security clearance who was being screened for a new position and would not be able to maintain her current employment if she “walked away” from her property by letting the home go to foreclosure.    However, she could not financially continue to maintain ownership of her home and needed help.  As a result, we were able to Short Sale the property without a deficiency notice and her security clearance was untouched. 

Often, people don’t realize the consequences a Foreclosure will have on them until it is too late.  Losing your job could be a consequence if you are in a high security profession or aspire to gain employment in the future in a field where you could be investigated.   A successful Short Sale can minimize this concern. 

For more information on Short Sales, visit our site at:  www.TroyFunk.com . 

Troy Funk, CDPE, SFR Broker-Associate

REO / Short Sale Department Keller Williams Realty on the Water

665 S. Orange Avenue -Suite 2

Sarasota, FL 34236

www.SarasotaRealEstateGallery.com

FAX – 877.843.8586

Email – Troy@TroyFunkTeam.com

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As a Short Sale Real Estate specialist in Sarasota, Florida with Keller Williams Realty, I recently received a call from a condominium association that had numerous units in their complex delinquent in their association dues.  They recently foreclosed on one of the units and now had legal ownership of the unit.  The association called me to discuss what they could do with the unit they had just acquired. 

My question to the board member of the association was, ”Why did you foreclose on the unit?” 

His response was that they had to because the owner was not paying their condominium dues.  As a result the condominium association now owned a unit, which had an existing first mortgage on it that was substantially higher than the property was worth, they incurred extensive legal fees, and also had the obligation to maintain a unit in their complex that was still facing foreclosure from the first mortgage.   In conclusion, the unit was going to be taken away from them through foreclosure of the first mortgage. 

Upon hearing this, I explained a potential solution which works for homeowners facing foreclosure, that could have the following benefits to their association: 

1.       Reduction in their legal expense in collections (as foreclosure is not always the best answer, if there is nothing to collect).

2.       The ability to recapture delinquent fees owed to their association in a faster time frame (selling Short Sale would recapture their fees quicker).

3.       A way to handle collections in a proactive-approach and in a harmonious way (these are your neighbors; is a lawsuit the best answer?).

4.       A plan to limit the future number of foreclosures in their community, which would have a better impact on property values in their neighborhood (Short Sale can accomplish this).   

How could this be done?   Establish a relationship with a Short Sale Real Estate Agent who could act as a reconciler for residents in the community who are falling behind on their payments, by encouraging them with information on the benefits of a Short Sale. 

Here is an initial letter, that I proposed to send, which could go out to homeowners in an association: 

Dear (Condominium Name) Homeowner,

Given the current economic environment, we have many homeowners who have fallen behind on their association dues.   If you are in this unfortunate situation, our goal is to work with you in a pro-active, Win-Win approach. 

As property values have declined over 50% in the past few years, it is not uncommon for many property owners in (Condominium Name) to believe that walking away from their property is the right answer.  However, walking away has unfortunate consequences, not only to our community but to you as well, with the possibility of a Deficiency Judgment imposed by your mortgage lender upon you. 

There is a solution that can prevent your property from going into foreclosure, limit the damage to your credit, potentially eliminate a deficiency judgment, and may put you in a situation where you could secure new financing on another property within 2 years.   This solution is known as Short Sale.   A Short Sale is a process where your lender reduces the amount owed on your property in order to facilitate the sale of your property.  In many cases your lender will pay all of the closing costs, including your association dues, real estate commission, and all related costs of the sale.  For more information on a Short Sale, visit: www.TroyFunk.com 

Troy Funk is a Short Sale Real Estate Agent with Keller Williams Realty and has closed over 100 bank-negotiated sales in the Manatee and Sarasota areas in less than a year.  He recently spoke with Judge Lee Haworth at a public service event and is available for a FREE consultation.  Troy Funk can be reached at 941-445-9999.   Of course it may be prudent to interview several real estate agents if you are considering selling your property, speaking with a qualified CPA on accounting issues, and an attorney on legal matters. 

Our intention for this notification is to extend an offer to help you. 

Sincerely, 

In closing, working with a Short Sale Real Estate agent to help a homeowner in distress could be a better solution for a Homeowners’ Association than foreclosing.   For more information on Short Sales, contact Troy Funk at Keller Williams Realty at 941-365-8769 or visit his website at: www.TroyFunk.com

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