How can you sell your home if it’s worth less than you owe?

How can I get out from under the debts on my home?

If the market value of your home is less than what you owe on your current mortgage, you may qualify for a legal, lender approved solution known as a Short Sale. A Short Sale can be accomplished by negotiating with your bank or lending institution to accept a sale of your property to a third party buyer for less than what you currently owe on your mortgage balance.

The short sale of real estate is not a questionable practice in today’s softening real estate market, it may be a necessity. The short sale transaction is a legal and much more beneficial alternative to foreclosure or even bankruptcy. Lenders are motivated to accept short sale offers to for a number of good reasons. The short sale of your home can result in a win-win-win situation for all parties involved:

Win #1: You win by getting out of a financial predicament a clean transaction and a salvaged credit score. Your property is saved from foreclosure, thus helping you to save your credit rating. Allowing you home to proceed into foreclosure may adversely affect your credit for up to 7 years.

Win #2: The lender wins by avoiding timely and costly foreclosure proceedings which could lead to an even more costly expense of ownership of the real estate by the by the bank.

Win #3: The buyer of your property wins by getting a solid property at a good market value.

What is a CDD fee?

I get this question all the time, especially from people relocating from outside Florida.  If you’re looking to purchase a home in Florida, you need to know what a CDD is as it can greatly impact your buying power and monthly payments.

What is a CDD?

A CDD is short for Community Development District which finances and manages community developments.

Tax-Free Bonds are issued to the developer to finance the cost of building the infrastructure of a development, including roads, utilities and many amenities such as pools, clubhouses,tennis courts, golf courses, etc. Homeowners in the development pay the costs of the CDD over the span of 15 to 30 years. There are a number of communities with CDD fees in Tampa, and throughout the State of Florida, so if you are looking for real estate in Tampa, or anywhere in Florida, you should know about these fees.

Can CDD fees go up?

Yes. The CDD fees appear on the homeowners tax bill. Each Community has a CDD board, initially appointed by the developer, which decides whether to include additional assessments into the CDD fee. If a community decides to do additional landscaping, revamp the golf course, add gates, or any other amenities, those costs may be added to the existing CDD fees. That would increase a total tax bill and increase the escrow required by your lender.

At the end of the 15-30 year period, does the CDD fee drop off the tax bill?

Not entirely.  The CDD normally has two parts, one to pay for the development that has already taken place, and the second  to maintain the community.  So even once the bond is repayed, there will still be a CDD to cover the maintenance, much like an HOA.

Smooth Move: A Stress-Free Recipe

You’re ready to move into your dream home, but the prospect of packing and moving and unpacking seems overwhelming… don’t fret!  Follow my simple recipe below for a smooth, stress-free move! [Read more]