Sherry Roberts

The Miami Beach real estate market is pocked with short sales. Besides the question “what is a short sale?” some of the most frequently asked questions from Miami Beach buyers and sellers often go unanswered by the Miami Beach real estate professional community. Short sales are when highly motivated sellers accept less than what is owned on a Miami Beach property either to appease banks interests or to lessen the mortgage burden of a distressed homeowner. Now that the initial question is cleared up what other frequently asked questions about short sales in Miami Beach can be answered?

What do short sales in Miami Beach do to a seller’s credit? A Miami Beach short sale is more favorable than a foreclosure. While a credit report will show that a Miami Beach seller’s mortgage debt was paid to their lender it will come with the caveat of saying settled for less than the Miami Beach property’s value.

When should a Miami Beach seller begin the short sale process? While there’s no standard operation for Miami Beach short sales, after ninety days of inactivity in a sellers market a Miami Beach pre-foreclosure home should being the short sale process. A short sale can be enacted at any point of negotiations between the lender and Miami Beach real estate owner as long as they come to an agreement.

Why are Miami Beach short sales such good deals? The reason a short sale is such good deal for both Miami Beach real estate buyers and sellers is because of the motivation of the seller to sell. Lenders in the current Miami Beach real estate market are not interested in owning more Miami Beach foreclosure property. Therefore, their willingness to go to the negotiating table and get the Miami Beach property sold allows buyers to acquire low cost Miami Beach real estate while simultaneously relieving mortgage debt for the sellers.

The economy has a lot of people holding on tight to their finances and cutting back on unnecessary expenses where possible, while others have had to hold onto their pocketbooks a little tighter but are riding this economic downturn a bit more secure than others.

While we’d all like to see foreclosures become a thing of the past and the economy improve, some who are in better financial shape and are tired of paying rent that’s not working for them have been carefully exploring the Miami Beach real estate market when they in fact may not be in the best condition to do so given the way things are.

It’s imperative that first time homebuyers remember that a mortgage does not represent all of the money that will be required to not only become a homeowner but maintain the home itself. Besides the monthly payments there is homeowner’s insurance (a requirement in the state of Florida) and given the volatile state of the market, values are highly likely to drop so possible property depreciation must also be taken into account, even if it is a high end market like South Beach real estate. Plus if the homeowner is a former renter, any home repairs are now their responsibility, not the landlord’s.

This isn’t to say that it’s hard to find Miami Beach waterfront homes that are within one’s budget. A real estate agent experienced in the Miami Beach market can present buyers with a list of property values in any given area which will allow potential buyers to see what they can and cannot afford, taking out most of the guesswork.

At the end of the day it’s the mortgage where first time buyers need to be the most careful and thoroughly evaluate which of them fits their needs and the budget. Most lenders won’t entertain a large majority of borrowers (even those who are qualified) and being turned down is common. If the mortgage application is approved, take the time to carefully read the terms of the mortgage since that’s likely going to be the biggest expense on top of bills and everything else.

Pretty much everyone shares the same question when it comes to the real estate market: when will it be over? In a perfect world such a question would not exist and we’d all be able to pinpoint the problem and fix it but realistically speaking, there’s no surefire solution to determine when the downturn that has affected Miami Beach real estate and beyond will cease. The good news is that small positive signs continue to appear every so often, ranging from modest existing home sales increases to buyers becoming less hesitant about seizing upon the record low prices for South Beach luxury condos.

As all this occurs in small doses, most people are keeping a close eye on when the Miami Beach real estate market will finally bottom out, signaling a potential market rebirth. It appears that this may be arriving a little sooner than anticipated as investors are now purchasing distressed South Beach real estate. For multiple reasons, real estate investment companies have been putting aside their considerable funds they normally use towards purchasing property. Perhaps feeling slightly more reassured they’re now intending to use over $25 billion towards the purchase of low-priced distressed properties in South Florida.

While this does to some degree acknowledge that investors have let go of a few jitters that made buying a Miami Beach Florida condo such a risky investment (as some of them have already done), this does not mean the market is necessarily on an upswing. For the time being the prices and values for Miami Beach condos and homes are either declining or simply remaining idle and this situation may remain that way for some time. This is obviously unfavorable news for existing homeowners attempting to sell but once again reinforces the fact that Miami Beach is a buyer’s market.