Posted on: July 3, 2012
There is some good news for investors interested in purchasing an investment property in Florida but fear the lengthy buying process of a short sale.
As of June 1, the Federal Housing Finance Agency has imposed mandatory timelines on all of the major banks in the United States, requiring a response within 30-60 days after an offer from a potential purchaser has been filed on a short sale property.
Typically, buying a short sale property has been a lengthy and uncertain process. Receiving a response from the bank used to take anywhere from one month to two years and this often made investors wary of going down the short sale road.
However, this new mandate is sure to shed some light on the situation, making offers on short sale properties easier and less time consuming for the seller, purchaser and the bank.
The mandate might have come at the perfect time for the U.S. economy as short sales dominate the real estate market in many States. According to a report from the foreclosure data firm RealtyTrac, short sales jumped 33 per cent from January 2011 to January 2012. In 12 states – including California, Arizona, Colorado, Florida, New York and New Jersey – there were more short sales recorded during the month of January than sales of foreclosed properties.
An article in the Miami Herald says this trend is welcome by regulators, but there are still additional steps that need to be examined in order to make the short sale buying process even more efficient. These steps include clearer guidelines on borrow eligibility, property valuations, compensation for lenders holding second liens, and mortgage insurance issues. All of these are points of friction that can delay short sales agreements for weeks or months.
“The mandate issued by the Federal Housing Finance Agency is a great first step,” said Narinder Seehra, CEO and Founding Partner of MSR Holdings Inc. “It applies pressure to the situation and forces banks to look at their administration and question its efficiency.”
With the short sale buying process being re-examined and a steady flow of short sale properties being listed in the Florida area, this is an excellent time to consider investing in Florida real estate.
For more information on why short sales make great investment opportunities, please contact us.