Contact me for a free list of South Florida Short Sales

What is a Florida Short Sale?

A  Florida Short Sale is an agreement between a property owner in the initial stages of foreclosure and the lender, allowing the property to be sold for less than the outstanding loan balance. The lender would accept less than the loan amount in order to avoid a foreclosure proceeding, which can cost as much as $50,000. This Florida short sale results in a substantially discounted purchase price for the buyer of the property. The buyer would then proceed with the purchase of the property in much the same as in any Florida real estate transaction.

Whether you are buying or selling a Florida Short Sale property, an experienced Florida short sale Realtor will help to expedite your transaction and protect your interests. Many short sales fail due to inexperience with the short sale process, which is much more intricate and involved than a regular sale. Real estate experts estimate that only 15% of short sales actually sell, the remainder end up in foreclosure.

For Buyers

Florida short sales require a lot of patience on the buyer’s side. If a buyer is unwilling to wait a minimum of four weeks to hear a response to an offer, there is no sense in submitting an offer on a short sale. The bank does not own the property, but must approve any offer that gives them less than what is owed on the mortgage. In practice, some short sales can take as long as a year! This waiting is difficult to understand for most buyers, hence the huge drop out rate.

The exception is when the short sale is listed at a bank pre-approved price. The four to six week process has already occurred with an offer that was turned down, so the listing Realtor and the bank know what it is willing to accept for the property. If a buyer submits an offer for less than the bank approved list price, then there is normally a wait for any type of response – which is usually negative.

Because the listing price on a short sale has not been set by the lender that must approve the offer, the list price is meaningless. So in order to have a reasonable chance of success with a short sale, any offer must be submitted based on a reasonable assessment of the property’s true market value!

For the Seller

The existing lender pays virtually all sales costs, including commissions, escrow and titles fees. The property gets sold, the loan(s) is paid off and foreclosure is avoided. Generally the property owner needs to be in default on their mortgage and must have ceased making mortgage payments for at least 2 months, before a lender will consider a short sale.

Even in a successful southwest Florida short sale, the property owner will suffer damage to their credit rating!!! A pre-foreclosure in redemption status will show up on the credit report, which will result in a loss of 100 to 120 points on the FICO score versus 280 – 300 points with a foreclosure.

Short Sale vs. Foreclosure