A short sale in real estate is when they sale of a home is not enough to cover the outstanding loans and liens against a property. The sale is “short” of the payoff, thus the term “short-sale” This can only occur when a home owner meets the qualifications and the lender agrees to allow a short sale. In the event of a short sale, the lender can release you FREE AND CLEAR from the property, and potentially fully forgive you of any deficiency! This is the most important phase of a short sale and requires a team of professionals looking out for your best interest.
Why would a Bank accept a short sale?
In Florida the owner of a property has ownership of their property thru a Deed. Neither the bank nor the bank’s attorney can take this property; the only recourse the bank has when the owner is in default is to petition the court to force the sale of the property at an auction. This foreclosure action if defended properly can take as long as 12 – 18 months and very costly to the bank. The bottom line - the best interest for the bank is to accept a short sale than face a long drawn out foreclosure process.
What is the Short Sale Process?
The short sale process is a lengthy difficult process at best – it takes a lot of patience and perseverance. You must always remember what is trying to be accomplished – you are asking the lender to approve your short sale, release your property and release any recourse against the deficiency balance remaining. The bank will want to review all of your financials, determine a justifiable hardship as well as determine the sale presented is the highest and best offer available. We bring a team of professionals to tackle this task – This is a full team effort with you as the owner as well as the bank and our real estate team – all sides win in a successful short sale.
What is a deficiency balance and am I responsible for deficiency after closing?
A deficiency balance occurs when a short sale is sold and the proceeds of the sale are not enough to pay off the loan obligations and expenses, the balance left over is called a "deficiency balance." This deficiency balance unless negotiated with a full release is still owed by the borrower. Our primary goal is obtain a full release for you and we work hand in hand with attorneys and title companies to professionally process this complicated transaction from start to finish
What is a foreclosure?
A “foreclosure” technically is the final act of the “foreclosure process” – it occurs at the final court auction sale of the property – the initial “foreclosure process” is just the legal proceedings initiated by a bank or lender to force the sale of property at a court auction sale. Once court auction sale is complete a “foreclosure” has taken place. When a short sale is completed during the “foreclosure process” this legal process is dismissed and therefore no final act “foreclosure” occurs.
What is the foreclosure process?
Under Florida foreclosure law, a foreclosure begins when the lender files a lawsuit against the borrower due to a default on the mortgage agreement. The Lender does not take the property; they petition the court to force the sale at auction. If the owner/borrower fails to answer this lawsuit, a judgment may be issued in favor of the lender allowing the borrower no recourse to stop the foreclosure on the property. Therefore legal representation is imperative to defend this action to extend enough time to get the short sale completed.
