Couple facing foreclosure make poor decisions, sabotaging their own efforts to avoid foreclosure & move on with life.
Mr. & Mrs. ?X? refused to face reality?and in poor judgment I stayed with them, hoping to help them regain their lives.
Job loss led to no money.
No money led to defaulting on their house payments.
Defaulting led to their contacting me for help avoiding foreclosure.
Avoiding foreclosure took a backseat when couple?s relationship began unraveling.
And when their relationship unraveled, even more illogical decisions made it clear I could not help them.
Click READ MORE to discover how property owners sabotage their own future, blinded by a potentially better solution.
IT WAS INEVITABLE?.
Sarasota Foreclosures ? Harsh Reality!
Some property owners must lose their homes to foreclosure. As harsh as this sounds, please read on for my explanation.
You see, only then will these property owners face reality?when they?re forced out of ?their? homes and into reality.
Many months ago, Mr. & Mrs. ?X? contacted me, desperately wanting my help to avoid foreclosure. They absolutely did not want a foreclosure.
Little did they know, Florida foreclosure laws automatically award deficiency judgment to creditor(s) upon foreclosure, allowing judgment creditors to chase ?debtor? for up to twenty years in Florida.
Before I agree to work with property owners, property owners must convince me they are ready for my help and agree to cooperate, honestly and responsively. They cannot stick their heads in the sand, hoping the problem goes away.
Believe it or not, some people aren?t emotionally stable ? they can?t believe their lives have crumbled; they can?t believe they?re losing their home, the same home in which they sank their life?s savings; and they stick their heads in the sand.
Still others simply want nothing more than to live ?rent free? for as long as they can. Some people even get brazen, believing they have a right to live rent free.
Sarasota Homes For Sale ? Costly Deferred Maintenance Turns Away (Most) Buyers
This couple was serious about selling, though two serious issues plagued this property:
- Deferred maintenance - Several roof leaks resulting in 7 or 8 ceiling stains throughout house ? actively leaking for more than 2 years. Naturally, buyers worried about mold. I could stop here. Unmitigated roof leaks alone cause many buyers to reject a property. MOLD scares people. But this property suffered even more costly maintenance: pool deck featured about 5 areas with several missing, cracked pavers popped up; a dirty stained pool and ?bold? paint colors throughout house, etc.
- Dirty & cluttered ? In total disregard, property owners made no effort to clean and de-clutter. Please understand, house hunters can understand money issues causing unresolved deferred maintenance. However, house hunters rightfully so should not tolerate a dirty, cluttered property. NO money is needed to clean and de-clutter.
When I sign on to help property owners, I don?t quit when the going gets tough.
I thought I had screened this couple well enough, asking all the right questions and confirming responses. Only then did I created an aggressive marketing campaign that did NOT hide the deferred maintenance. I spoke candidly about the property?s issues to inquiring buyers? agents. I defined the likely buyer and used my marketing to search for the right buyer.
Clearly, buyers and buyers? agents knew ahead of time what they were encountering with this property.
A few price drops later, a strong, patient buyer stepped forward. Seller quickly provided all necessary financial documentation required by the banks.
It was then I discovered a serious challenge to short sale success: seller had failed to tell me the second mortgage he had really was an $90,000 home equity LINE of credit.
Turns out, property owner had been using his house as an ATM, living on the money that climbed to a $90,000 lien against the property.
$90,000 equity line of credit!
Somehow, property owner didn?t understand my clear question weeks earlier. It was my understanding up to that point both ?mortgages? originated to buy the house. Clearly,
- I didn?t know property owner had HELOC (home equity line of credit), a whopping $90,000 used for everything but the house.
- Banks do NOT allow borrowers to walk away without (increased) cash contribution or promissory note. Rightfully so, banks want more money from people who used their homes as ATMs. If seller had refused to pay or close with lien release only, I politely would have excused myself from the initial listing appointment.
As it was, buyer waited patiently for months, as 2nd lien holder finally came back with 2 payoff numbers ? one lower payoff amount for lien release only and 25% of outstanding balance for full waiver of deficiency.
It was then seller defied logic ? seller insisted buyer pay the ~$25,000 bank required for seller to walk away.
Already, seller had offered to pay fair market value.
Now, seller insisted buyer pay ABOVE market value for seller?s right to walk away paying ZERO. Naturally, buyer canceled and moved on?.
Suddenly, I felt betrayed.
As the listing agent, I had invested money and time to do my job. I?d taken a distressed property in poor ?show? condition and delivered a strong offer to seller.
In my mind, I knew I?d explained the difference between mortgage loan and equity line of credit. I made clear that mortgage is used to buy the property and equity line of credit is taken out later for benefit of house or to buy ?toys? (whether or not a person uses money on which to live).
Makes no difference to a bank.
Either money goes into the property or it doesn?t.
For some strange reason, I chose to stick with property owner and my responsibility to help them avoid foreclosure.
But then life eventually got in the way?and reality smacked (ME) squarely between the eyes!
Yep, that?s right, I am the one who was left shaking his head in disbelief.
I found seller another strong buyer at full list price (aka ?full market value?). Strangely, seller reacted with ambivalence.
No excitement?no relief.
Later, I received an email ? an email ? informing me seller was filing bankruptcy, including the property, in an effort to strip away the second lien ($90,000 HELOC).
Property owner believed reducing his load by $90,000 would be worth the bankruptcy and allow him to afford the house.
Wife had lived in property nearly 24 months rent free, never cleaning or removing clutter.
Husband traveled out of state to find work.
Wife requested divorce.
Husband apparently conjured up bankruptcy in order to try to keep the house he previously had said he couldn?t afford.
With no remorse or hesitation, I clearly admit I wanted to get paid for my endless work on behalf of this property owner. But I also wanted to see a positive ending.
Suddenly, I felt like the banks that were about to be included in bankruptcy ? $90,000 HELOC; $28,000 credit card & yet another big debt on yet another credit card.
What the average person never can realize is that short sales require many stars to align in the night sky. Real estate agents such as I with proven experience helping property owners avoid foreclosure never know if we?ll see a payday for all our solutions, guidance, marketing & sales skills.
This is a realistic peek behind the curtain into the unrealistic world of short sales filled with more emotions that one huge bottle can hold.
How do you react to this lengthy depiction? Property owner?s final words to me were something like, ?Mike, I have to do what?s best for my family. This is nothing personal. You?ve done a great job with what I handed you.?
I hope bankruptcy offers the solution. I exceeded expectations, selling that property 2 different times. My marketing converted. All that was missing was a payday. Oh well, real estate agents are overpaid as it is, right? 
My Sarasota Real Estate blog is not just real estate ? it?s the most comprehensive online source for Sarasota attractions including information about Sarasota, beaches, attractions, events & local issues. Whether you are looking for the latest sales, price trends, Sarasota foreclosures or homes for sale in Sarasota, I try to make it all available here. Browse Sarasota homes for sale; call me @ (941) 914-9980 if you or someone you know has a question or wants to buy or sell a house in the Sarasota area.
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