The Anatomy of a Sarasota Short Sale

In my experience, real estate agents are people-magnets at cocktail parties and family barbecues if they can answer this 64 million dollar question.

I’ve been involved in Sarasota real estate for thirty years and my experience tells me that in today’s real estate market there is simply nothing more important for any realtor than local market knowledge.

Local Market knowledge: Deal maker or breaker

In a short sale, the local knowledge and experience of your Sarasota Realtor become even more important; in fact, it’s critical to the success or failure of the deal. Your choice of agent will ultimately determine whether or not you get your dream home in Sarasota, NBC’s number one place in the country to get value on real estate.

Your agent needs to have the experience and skill to know exactly the true value of the property, and what it’s worth to you. As I reiterated during my recent presentation in Congress, for my business and any small business with integrity, it’s all about the people you have on board and the relationships you build. Nowhere is this truer than in a short sale situation.

With the current re-adjustment of real estate values in Sarasota, short sales are becoming more and more common. In my business short sales and foreclosure sales account for about a quarter of all sales: that’s 955 single-family homes out of the 3,825 currently on the market.

So what is a Short Sale?

A short sale can be defined very simply: where the Property sells for less than is owed to the bank.

For sellers, a short sale can be a sad affair: the end of the American dream of property ownership, with negative credit effects, and possibly a big debt left over to the bank. But for the shrewd buyer with the right advice and agents, short sales can be a great way to get a good deal.

In today’s unique real estate environment many buyers are asking for the lender to accept less than is owed and forgive the borrower the difference on the loan. This decision is down to the lender and it requires a lot of paperwork and appraisal to get that decision made.

If you’re looking to buy a property that is in this process be prepared to wait out the wrangling, and make sure you’ve got the right agent to help you get your offer accepted.

Short Sales vs. Foreclosures

The key difference between short sales and foreclosures is in a foreclosure the bank takes ownership of the property and forces its sale to recover losses. Whereas, a short sale is a delicate negotiation between the property owner and the bank or lender to recover as much as possible from the property’s sale towards the loan owed to the lender.

A Deal I just closed

I just closed a property that I had listed for two years. The property was mispriced and trailed the market for some time. Finally, we had a buyer willing to buy the house for $1.2 million, but the lender was not ready to accept it.

Fast forward 15 months and the lender took 280,000 dollars (23%) less.

Why?

In this case, the first buyer was willing and able, the lender had all of the required info to make a decision, and the appraisals supported the offer, but the lender was not ready. 15 months later I worked with a negotiator at the same lender with years of experience who is paid for performance. The difference: We went from contract to closing in 60 days for 280,000 dollars less.

Like all things in life, a short sale is all about the people.

My Advice for Anyone looking at a Short Sale Property?

You need three things:

1. Patience: Short sales can go through as quickly as 60 days, but more typically take up to six months. The buyer has to be prepared to wait out the process as the bank and the seller hammer out the details of what the lender is prepared to accept.
2. The right Real Estate Agent: Like any real estate deal a short sale is all about the people. Make sure your Sarasota realtor has a lot of experience with short sales. An experienced real estate agent will keep the deal on track by being persistent and negotiating constantly with the lender or seller’s agent. That relationship is absolutely critical to the success of a short sale.
3. Local Market knowledge: Your realtor needs to have intimate knowledge of the Sarasota property market to know the true value of the home. Often short sales attract a lot of interest and because they are done with sealed bids you need to put in a bid that is attractive to the lender.

Give us a call with any real estate question you may have: 941.587.0740.