Short Sales

Short Sales and Foreclosures

A short sale occurs when the mortgage loans, other liens and closing costs, against a property are greater than the proceeds from the sale, and the lender agrees to accept this lower payoff amount.

It is an alternative to foreclosure for homeowners who can no longer afford their mortgage, or it can also be used if your property is “under water”, meaning it is worth less now than the amount you borrowed from the bank.

As an alternative to foreclosure, in most cases will release you from paying the deficiency, which is the different between the short sale price and the original mortgage amount. However that release is not always granted therefore it is important consideration in agreeing to a short sale.

Advantages of short sale:

Your credit can recover from a short sale in less than two years, but a foreclosure or bankruptcy will take 7 to 10 years. A foreclosure will affect your credit far more in the long term and in some states the lender can seek a deficiency judgment and can come after other property or assets you own. Consult your accountant regarding any tax liabilities.

There are financial incentives for homeowners as well. There are additional fees and costs to both the borrower and lenders which are mitigated when doing a short sale. In addition, many banks are offering their own financial incentives to do sell your home via short sale, anywhere from 1,000 to 35,000 dollars depending on the institution.

HAFA (Home Affordable Foreclosure Alternative) is a government-sponsored short sale which is an option if you qualify. In addition to receiving $3,000 to help you relocate into more affordable housing, a HAFA short sale guarantees no deficiency judgements, no closing costs and no promissory notes. In addition there are additional incentives for second mortgages, including up to $6,000 at closing


In order to be allowed to do a short sale you must be able to prove a financial hardship, which can be loss of employment or income, divorce, relocation, job transfer, major illness and medical expense, or unexpected expenses. A short sale is for those who have to sell, not for those who want to sell. You must provide a hardship letter detailing the issues that brought you to this situation.

You must be proactive and not wait until foreclosure notices are sent to your home before you start asking about a short sale. Contact your lender and ask them about their conditions for a short sale. You must meet all their requirements and deadlines in order to have a successful short sale.

But it can be done and we’ll help you navigate through the short sale process and get you in to a home you can afford.

How long can I stay in the house?

You can stay until the closing. If you are facing foreclosure and you are actively working with your lender, you can sometimes get the lender to delay foreclosure which allows you to stay in the home for some time.

As of 2011, Florida laws and industry standards fare in an ongoing and rapid state of change. Borrowers interested in pursuing a short sale should consult first with a HUD approved mortgage counselor for up-to-date and specific advice as it applies to their situation. Also, borrowers need to obtain up to date information from multiple professionals, including an accountant, an attorney, and a real estate broker.

We are expert short-term sale negotiators with high success in closing short sale transactions.

Florida Short Sale Foreclosure Solutions

A short sale or short payoff occurs when a lender agrees to accept less than the outstanding loan amount to satisfy the seller’s loan. A short sale allows both the lender and the distressed property owner to avoid foreclosure by selling the property at a loss. Combined with the weak real estate market the following are common situations facing distressed sellers:

  • Declining real estate values;
  • Unexpected health issues resulting in difficulty making mortgage payments;
  • Lending rate increases on adjustable rate loans;
  • Divorce;
  • Over-extended borrower with multiple mortgages;
  • Job loss or transfer;

Our goal is to protect our local and out-of-state clients while guiding them through their real estate transactions. We offer affordable rates and a friendly atmosphere where clients are welcome to call or visit the office with questions.

Short sales are more complicated and time consuming than an average real estate sale, making it important to retain an experienced real estate attorney to oversee and negotiate the transaction. A distressed seller initiates the short sale by contacting a real estate attorney to draft a special contract and a Realtor to find a buyer at the current market price, sometimes as much as thirty percent less than the seller may have paid for the property. The seller’s Realtor must find a bona fide purchaser for the property at the current market value before the short sale offer can be submitted to the seller’s lender. Ocean Title along with sister company Ibrahim Law P.A. works with sellers, buyers, and Realtors to negotiate and draft sales contracts which include the conditions of the short sale.

Special attention must be paid to all short sale terms or addenda, which are often written in favor of the lender and seller rather than the buyer.

Lenders Prefer Short Sales

Short sales are more beneficial to a lender than a foreclosure.

Lenders prefer short sales because they are not in the business of managing and owning property and short sales are less expensive than completing the foreclosure process. Lenders accepting short sales receive a substantial percentage of the outstanding loan amount due without waiting for a time consuming foreclosure, and they are able to avoid foreclosure and maintenance fees. Ocean Title along with sister company Ibrahim Law P.A.  are very experienced in negotiating with lenders to obtain a timely short sale payoff that satisfies both the lender and the seller, often without damaging the seller’s credit rating.

Buyers Benefit from Short Sales

Buyers often save money purchasing a property in a short sale. Ocean Title along with the sister company Ibrahim Law P.A., represent buyers in short sales and will draft a sales contract to include closing costs and fees in the short sale payoff amount. The experienced staff of Ocean Title along with the sister company Ibrahim Law will prepare an initial draft settlement statement satisfying the needs of all the parties, which will be submitted to the lender for approval. Drawing on extensive real estate experience and careful planning they will work to obtain the best possible lender payoff, resulting in a fair price and low costs for the buyer and satisfaction for the lender and seller.

We assist Realtors and mortgage brokers guide their clients through the short sale process, and coordinate the transaction from contract to closing.

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