Short Sales: Selling Your Home on a Short Sale
Distressed Sellers? We can
to know the basic about short sales? Our office
specializes in these transactions and offers free
consultation on what you can expect
from this alternative to foreclosure. There are
alternatives but Short
Sales may be your best option
if you are facing foreclosure and/or can no longer
afford your payments. We
negotiate with the Bank. Please
feel free to call 813-671-6657 for a free consultation
or email: email@example.com
What is a short sale?
A: A short sale is an alternative to foreclosure.
Simply put, it is when a lender will agree to
accept an amount which is less than what is actually
owed on the property. A short sale is a normal
(actually nothing “normal” about a
short sale) purchase and sale transaction, however
the lender is receiving a payoff which is “short”
of the total amount owed. Hence, the term “short
Q: Can anyone qualify to short sale
A: No. We spend countless hours a week advising
individuals about short sales and this is the
first question they typically get wrong. Your
bank must approve you for a short sale. In sum,
you must qualify or be able to clearly demonstrate
that you are suffering a financial hardship. A
financial hardship is not just being upside down
on your house. A financial hardship can be met
in a number of ways and each lender is different
on what they deem to be a true financial hardship.
Your bank’s loss mitigation department will
require you to submit numerous documents, in which
they will review and determine whether or not
you have a financial hardship.
Q: Does a closed short sale mean that
I am protected and that the bank cannot pursue
a collection against me for the difference, or
more commonly referred to as a deficiency?
A: No. This is the second question that most people
get wrong. This is yet another reason why it is
so vital to have an experienced real estate attorney
work with your seller. This critical aspect of
a short sale gets lost in the mix in many closings
where an attorney is not involved. My office is
currently working with a number of clients that
are being sued for deficiencies, even though they
sold their house via a short sale. Scary but true.
Q: How can a distressed homeowner
afford to hire an attorney if they can’t
even pay their mortgage(s)?
A: Good question and there is hope. Most banks
will contribute towards attorneys’ fees
at the successful completion of a short sale.
Therefore, we can keep up-front fees reasonable.
Q: How long does the process take?
A: This is the one of the major problems with
short sales. Even with a very efficient system,
these transactions can take months to get closed.
There are various reasons why but the most obvious
is that the banks are overwhelmed and simply cannot
keep up with the number of requests they are getting.
This is another reason why sellers and buyers
should use an experienced short sale team (realtor
and real estate attorney). Individuals who do
not have experience handling and successfully
closing short sales have very little chance to
get their deals closed.
Q: Does my seller have to pay taxes
on the difference between what is actually owed
and what the bank nets?
A: Sorry for the typical lawyer answer, but it
depends. We always advise our clients to consult
with an accountant, bankruptcy attorney and credit
repair company prior to retaining our services.
Nonetheless, a quick answer is that primary residences
are typically exempt from paying taxes on the
difference. This law was changed a few years ago
to assist primary homeowners who are defaulting
on their mortgages. On the other hand, investment
or second home owners will most likely be liable
for taxes on the difference.
Q: Will they stop the foreclosure
process if I apply for a short sale and have an
A: No. This is the third misconception (if we
are counting). In most cases if not all, they
will do just the opposite. It is always the goal
to complete and close your short sale before the
bank completes its foreclosure. If this does not
happen and the bank wins the race, well then the
obvious happens. Your seller has been foreclosed
on and will have a large judgment against them.
Q: Can they hire you to defend the
A: It depends (sorry). Attorneys can of course
represent and defend a foreclosure for your seller,
but only if he/she has viable defenses to the
Q: Is it worth attempting a short
sale if you have already been served with foreclosure
A: Yes. Lenders foreclose because it is one of
the few remedies they actually have. Trust me,
it is quite possibly the last thing they want
to do in this market. Why? Well, because most
properties being foreclosed on these days are
upside down in value. In simple terms, the bank
is owed more than what the house can sell for.
In addition, most banks buy the property back
at the foreclosure sale (because the highest bidder
at the foreclosure sale would have to pay off
their mortgage(s) which is highly unlikely). The
bank would then obtain title to the property and
be forced to sell it for the best possible price.
Well that is exactly what we are trying to do
for them and by the time they get to sell the
property….they have lost more money in rehabbing
and lost time. In sum, they want you to sell the
property so they don’t have to do it themselves.
and A from the Law Offices of Anthony W. Surber,
4809 Ehrlich Road, Suite 102
Tampa, Florida 33624
O (813) 908-6800
F (813) 908-6830
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