02 Nov Short Sales in Southwest Florida – The Latest News Part I
Short sales in Southwest Florida, especially Lehigh Acres, Cape Coral and Fort Myers are nothing new. We have been living with this problem for a while. The new trend is for buyers to put in multiple offers on different properties creating a kind of buying frenzy. This behavior may have been brought on by the Realtors trying to make a sale or the Buyers wanting to cash in on what looks like a good deal.Just the other day Attorneys David Lampley, David Fineman and I were discussing how this problem impacts our clients. We agreed that when a buyer places multiple offers on several properties the entire short sale process is bogged down. Once an offer is submitted, the bank or mortgage company has to go through a process or checklist to determine the value of the property, the eligibility of the seller and the liquidity of the buyer, plus other criteria that they have determined is necessary. The list varies from company to company.
The problem really comes into perspective when you look at it from all of the various positions. First, let’s look at the lender’s position. Each lender knows by now that the Southwest Florida market is in serious trouble, and it would only take a few minutes of research to target the zip codes with the most foreclosure activity. Even though some area of Lee County are hot spots for foreclosure, there are still some homeowners hanging on by liquidating their 401K and IRAs, and some are even surviving by using the credit cards in hopes of a quick economic turn around.
Most lenders will not even consider a short sale until the homeowner falls behind for three (3) months. I’m not quite sure where this three (3) month time frame came from, but it has somehow taken hold as a benchmark in the short-sale industry. So, by this time, the lender has not been receiving any money on the property and is now looking at the current housing climate and determining whether it would be in their best interest to accept a short sale and cut their losses. Each lender has their own criteria for determining whether a short sale will be in their own best interest, not in the best interest of the homeowner.
Part II of this blog will discuss the other players in the short sale and how they deal with multiple offers.
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