Florida foreclosures and short sales are a new phenomenon in the Sunshine State, which has really seen nothing like the rate of foreclosure that it has over the last year or so. Keep in mind that Florida is extremely populous and that property and home ownership speculation has gone on for years down there. Unfortunately, late 2008 saw a huge drop in the real estate market followed by increasing numbers of foreclosures.
Reasons for why the broader real estate markets began to collapse are many and varied, and it isn’t just in Florida that this has been going on. In general, people began to look at homes or property more as a quick-turnaround investment vehicle rather than something that would be held for many years. As a consequence, many investors excessively-leveraged themselves to get into properties they thought they would sell quickly.
Much of what went on in Florida was known as flipping, which is a colloquial term for buying a property, sitting on it a short while and then trying to unload it at a nice profit. However, when the market began its deep dive many of these flippers were caught out sitting on properties that they now cannot afford for many reasons, including loss of their own income in this deep recession.
Sooner or later, this burst bubble was bound to occur and only those who were endlessly optimistic believed they would go on forever. What really hurt this time is that it occurred so rapidly that many who had bought homes on adjustable rate or interest-only mortgages could not get out of their homes before their payments began to climb steeply upwards. Banks, like banks are wont to do, began to foreclose.
Many homeowners and flippers have begun looking at trying to get out of these properties through a process known as a short sale, which can actually be a viable alternative to a foreclosure, if the lender is willing to allow it. If successful, they can avoid a very hard hit to their credit scores, and lenders will at least get some money out of the property rather than none if it’s foreclosed upon.
Basically, this sort of sale is undertaken with the permission of the lender. It can allow a homeowner to sell his or her property for whatever the market can provide, even if its several thousand (or maybe much more than that) less than what’s owed on the property by the owner. The bank takes the sale price paid and usually forgives the difference. Currently, there are many, many homes up for short sale in lieu of foreclosure in the Sunshine State.
FL foreclosures and the rate at which properties in this most populous of southern states have been falling into this state can make up a significant portion of the real estate activity in certain markets in the state, especially around the really big cities. An investor or a buyer looking for a good deal may want to consider checking out homes offered by “motivated” buyers offering a short sale on their property.
What to know about FL foreclosures and short sales can come in handy in these trying and fiscally-challenging times. We’ve got the best inside info on fl foreclosure properties.
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