Florida Short Sales- Then and Now
If you lived in Florida back in the 90’s and beginning of 2000’s you most likely remember the company called, “We Buy Ugly Houses”. This company was doing short sales way before 99% of the real estate agents even heard the term.
Where did I first hear the term, “short sale” as related to real estate transactions? I remember learning about them in the pre-licensing course before I took my first real estate exam a long time ago. We learned in that class what a short sale was, when people used them and the process.
Fast forward to 2007. What happened in the beginning of 2007? I remember the eery feeling in real estate here. It was like a crash unlike any other. We have been through two big real estate recessions but this one was different. The real estate market stood still like we had not seen before. The buyers refused to buy property because the prices were too high and the sellers did not lower their prices so for about 4 months- tropical Florida was frozen.
I remember the first time we wrote about short sales on ActiveRain. There was one other person, Dan Forbes who also was here in Florida who had already done short sales prior to this period of time as we had also. We were just about the only people back in June of 2007 that wrote about short sales. There was no CDPE and there was no SFR. In fact, many of the comments we received were other brokers saying they will not allow their agents to do short sales because of the liability. Well, now the laws in most states say that ONLY real estate agents or attorneys can negotiate short sales.
Florida short sales were misunderstood by most people. Most real estate agents said they would never take a short sale listing even many of my friends here on AR were saying they would never do a short sale.:) My how times change. In fact, many of our short sale listings came from referrals right here on ActiveRain and many more from local real estate agents who we know. I think that many of the agents were actually hoping this would just go away soon and they would never have to cross the bridge to short sale negotiations.
I have written over 280 short sale articles since June of 2007. In 2008, 2009 and 2010 because of our embracing short sales we stayed in business as a real estate brokerage while many offices closed their doors. We carried between 70 to 90 listings most of the time. We created a well-oiled system to process the short sales and started doing them for other agents all over the state of Florida. It was a very fulfilling time for us because we were helping homeowners move on with their lives and we were stopping those foreclosures that were waiting to happen.
Along the way we created some very good relationships with executives and negotiators at the mortgage lenders and servicers in the loss mitigation departments. This has been an asset for our sellers. Many agents talk about how important communication is but most communication is chit chat kind of stuff that can be taken care of in emails. But rather it is effective communication that gets the short sales to the closing table. There are many and always have been situations that are out of the control of us or our seller when a short sale falls apart but we just put the property back on the market and keep on going.
Well, most of the agents who said they would never touch a short sale are either now embracing the short sales or reluctantly doing them so they can stay in business. The cycle of the Florida short sale is not over and most likely will not be for several more years in most areas of the state. However, the inventory is shrinking and with more agents going after the same market the short sale listing inventory is shrinking.
We went from being in the top 2% of our mls closing sides to being in the top 9%. It is still really good and we are not complaining nevertheless when the market inventory starts to shrink as a company and as a brokerage it is time to examine the marketplace. Are there other niches not being served? Are there homeowners who still don’t know they can do a short sale where you can be their first point of contact? The one thing that if for sure in real estate is change. Commercial defaults are the next big short sale market coming to many towns in the U.S. If you are a commercial broker this may be the right time for you to understand and learn the commercial short sale process which is different than a Florida residential short sale process.