Short Sale vs. Foreclosure

By Debbie James, July 23, 2010

The difference between a short sale and a foreclosure is that with a short sale the seller still has control of the property, whereas a foreclosure is bank owned, (and also called a REO, real estate owned).

Here are the definitions:

A short sale is a sale which the sale proceeds fall short of the balance owed on the property’s mortgage. Typically this occurs when a borrower (seller) cannot make the payments on their loan. The lender decides that selling the property at a loss is better than the cost of foreclosing, which can cost the lender upwards of $70,000-$80,000!  Both parties must consent to the short sale process. This agreement does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.

Continue reading ‘Short Sale vs. Foreclosure’»


Real Estate continues to be local in nature – consider the U.S. weather map; there is no relationship to the Destin weather map – this comparison is valid for real estate the conditions and trends of national markets have little to no similarities to the Destin market.

us map

local map

The concept of FIFO – is applicable here – the Destin Florida real estate market was arguably the first to crash (first in) – the fall began in September 2005 and it is showing signs that it is also going to be among the first out of this prolonged (3 1/2 years) downward market adjustment. During those great years of appreciation the Destin to Seagrove Beach to Rosemary Beach real estate markets appreciated faster and higher than most of the other U.S. real estate markets; we have also fallen faster and deeper.

Click to view a Market Comparison Statistics Report

Click to view a Market Comparison Statistics Report

The spreadsheet above demonstrates the comparison of monthly sales activity between June 2008 – May 2009 and June 2007 – May 2008; specifically this includes homes, townhomes and condos located from the Destin bridge to the east end of County Road 30-A all located between the Gulf of Mexico and the bay.. These stats come directly from the Emerald Coast Association of REALTORS MLS Database.

Click to view comparison of active properties

Click to view comparison of active properties

The spreadsheet above shows that over the last twelve months the “Active” inventory has fallen on average 21% per month while sales “Pending Sales” are up over 23% per month and Sold or recently closed sales on average are up over 3% per month with a average reduction in Expired Listings falling more than 24% per month. So we you can see what we are seeing; less inventory and more sales consistently for the last 12 months – is this a trend, I suggest it is.
Click to view pending comparisons
Click to view pending comparisons

Those of you waiting for the bottom, I suggest you are seeing it here, like any yard sale those who show up first get the best choices and those who show up later get what was picked over. Yes this inventory will be replaced by more inventory and yes these sellers will be less inclined to negotiate as aggressively as today’s sellers.

A few days back I read the article below published by the Housing Predictor an Independent Real Estate Market Forecaster and was written by Mike Colpitts, this article supports the scenario outlined above.

10 Signs to the Bottom of Real Estate Markets

The bottom of each real estate market in America won’t occur with much fan fare. In fact, few people will realize that it’s even happening when they do, and they’re usually only recognized after the bottom has already hit.

The search for the elusive bottom to any real estate market is akin to finding the proverbial needle in a hay stack. Once they’re fully realized, the elevator is usually on the way up and higher prices follow.

Bottoms to real estate markets are a lot like trying to determine when stocks in financial markets are at their lowest price. Veteran investors say it’s a fool’s game to try to find the bottom to make a buying decision because as you wait, study and calculate the tendency is to over analyze as the market makes its own moves and often leaves you in the lurch.

In these increasingly complicated financial times, troubled by the credit crunch finding a market’s elusive bottom is no easy task. But here are 10 signs to ponder on whether the bottom of your market is near:

  1. The inventory of listings is reducing as properties come off the market, especially those over priced places that have been sitting on the market rotting. Noticing fewer for sale signs in that neighborhood you’re interested in buying a home or condo in these days?
  2. The Mass Media spurs interest with talk of a bottom. Newspapers and television reporters speculate and ask the experts if a bottom is occurring like it’s a national real estate market trend when all markets have their own local bottoms and are scattered over time.
  3. Sales volume begins to pick up, slowly at first as pent up buyer demand results in more showings.
  4. People are less fearful of the market.
  5. People begin to talk about how much money there is to be made investing in real estate again.
  6. Increasing telephone calls to realty offices on listings and for sale by owners.
  7. The Fed finishes tinkering with interest rates at least for a while, trying to get a handle on how the markets are moving.
  8. People commonly talk about the bottom occurring like it’s a thing of the past with increasing consumer confidence.
  9. Prices finally seem to stop dropping.
  10. Financing becomes easier to obtain.

There aren’t hard and fast rules to insuring that your real estate market is at the bottom. All bottoms are different after all, but one thing’s sure. The bottom of markets have historically been for a much shorter duration than the top, which is one reason why most property owners are secure in their positions. Statistically, very few real estate buyers make their purchases at the bottom or the top. Most buyers find themselves buying somewhere in between.

Richard Eimers, Broker

Richard Eimers, Broker

I am a real estate broker of a boutique resort brokerage in Destin Florida. I am fortunate in that in addition to having great agents working for  me I also have two personal licensed assistants and Lucy Normann my New Contact Care Manager working for me; Amanda Bonne’ is my Buyers Assistant and Brittany Bryson my Listing Assistant. Between the three of them we have conversations with about 75 potential buyers per day. Why is it that some recognize that now is the time to buy and others that that time is somewhere in our future? Then there are those who say they are going to wait another year to 18 months – does anyone have any idea what the market will be doing then?



I have discussions with all three of these valued assistants throughout the day and the one recurring comment by both although mostly from buyers is “I am waiting for the BOTTOM”. The allusive proverbial Bottom, what is it, where is it and how will I recognize it?


What is the “Bottom”  – Continue Reading »

Richard Eimers, Broker
Richard Eimers, Broker

It’s has begun – sellers are selling their properties and are coming to Destin Florida with the plan to buy.  As an example we have a customer who has been online looking at Destin Florida properties for the last 9 months – put his condo in the Caymen Islands for sale and it sold in 3 days; closed in two weeks. I’d be willing to be the buyers of his Cayman Island condo sold something to buy it. This seller turned buyer will be in Destin Florida to buy a $350,000 – $400,000 home in April.


Another Seller turned buyer sold his commercial  property in Tennessee after being Continue Reading »

Richard Eimers

Fear is a powerful motivator. It can drive banks to failure, nations to war and people watching their growing waistlines to put down that third slice of pizza.

Extreme fear, mixed with hope, was behind recent manic gyrations in the world’s stock markets and has been the only reason why the buyers and sellers in Destin are real estate frozen. The Destin real estate market has so many buyer and sellers both wanting the same thing, a new home. Yet fear is keeping them from moving towards one today when the interest rates are low and the inventory is plentiful. Interest rates are expected to grow to 8% next. Whatever the buyer thinks he will save by waiting will cost him triple with a higher interest rate. Most buyers never calculated the cost of waiting. They will be shocked when they realize that the $10,000 they thought they would save by waiting actually cost them $200 more per month in a payment which equals a $72,000 loss over 30 years. It is sad for me to watch FEAR keep buyers from making a great investment decision. Remember in 1990 when the media said, “don’t buy real estate”. I bet everyone who bought in 1990 is very glad they did. 15 years of incredible appreciation is what they were able to take to the bank. Continue Reading »

Market Update

Kristen Pope

Coordinated Rate Cuts: Central banks around the world, including the Fed, the European Central Bank and the Bank of England, jointly announced a series of rate cuts. The fed funds rate was reduced 50 basis points to 1.5%.  The Federal Reserve led a global coordinated emergency interest rate cut this morning that included the European Central Bank, Canada, UK, Switzerland and Sweden. The Federal Funds Rate was lowered by 50bp to 1.5%, while the discount rate was also cut by 50bp to 1.75%. The joint effort was to ease the economic effects of the worst  financial crisis since the Great Depression.

The coordinated effort helped keep the currency markets in balance – this gave our Fed the green light to cut, without the inflationary concerns from a weaker Dollar. Additionally, the strong Dollar is keeping oil prices in check…much different from the past string of isolated US cuts that led to a much weaker Dollar and skyrocketing oil. And the European Central Bank, which had turned its back on rate cuts (they actually hiked not too long ago) because of its single mandate of fighting inflation, gains cover in making the move to avert a global collapse. Look for more cuts ahead, especially from the ECB and the Bank of England, which both have lots of room to slash rates. Continue Reading »


Last month I talked about the 10 steps to buying the right property and finding the right rental property. So now that you know how to find the right property, we need to talk about how to put in the best offer on the property in order to get the best deal.

Once you have chosen the property you need to first determine the purchase price that will make a great deal for you as the buyer.  You can determine this by looking at comparable sales prices.  Your Realtor should be able to put together this information from the MLS and public records.  We are finding in this market most sellers are negotiating from their asking prices by an average of 8-12%.

Review sales history…how long has the property been on market and what did the seller pay for the property?  Although in this market these details won’t always determine selling price, it will sometimes help you to determine the level of motivation of the seller.  Your Realtor should also be able to tell you if this is a short sale, foreclosure sale, or regular sale.  The type of sale will determine your plan of attack for pricing and negotiating to get the best price.  (The difference on these sale types is a whole separate article…watch for that next month.)

Find out if any other offers have been put on property yet…if so, you will be able to get a feel for what the seller will or will not accept, and also be a little more telling as to the seller’s level of motivation.  I keep referring to the seller’s level of motivation…all sales will come down to this, and this is something that can change on a daily basis depending on personal situations.

Once you have reviewed all of this information, you should have a final purchase price you are comfortable with that will give you a good deal on the property.  So, now comes the time to put together the details of the offer with your Realtor.  Different documents will be needed for the different sale types (again, more to come on that next month), but the basic terms will remain the same.

In most circumstances when we talk about getting a good deal, it means getting a great price on a great property.  In order for a seller to come down to the lowest price possible, you have to make the offer as strong as possible in other terms…no finance contingency, quick closing, as is condition, good earnest money deposit amount to show commitment to transaction, and both parties paying their own closing costs or better.  When all of these terms are reviewed together, a realistic seller should be happy to sell to you as the buyer.

Dana McIntosh, REALTOR
800-775-5914 Main | 850-428-0243 Cell