There may be times when retaining a property that is in foreclosure or no longer affordable might not be an option or even desirable for the homeowner. When you no longer want to keep a property but you owe more on it than its market value selling it is not a straight-forward proposition.
A short sale is a negotiation process by which the bank will accept less than what it is owed on the promissory note as full payment and satisfaction of your loan responsibilities. The process of short selling a property is similar to a regular sale where you will have to list your property for sale with the assistance of a Florida licensed realtor and you will receive offers from potential purchasers. However, once you accept an offer you do not simply move forward with a closing but now you will have to get the bank to agree to let you sell the property for less than what you owe them. At First Legal we have developed the experience and knowledge necessary to assist homeowners through this process. We can put you in touch with experienced short sale realtors that can help find the right buyer who will not get scared away by the prospect of a protracted negotiation process. Once we have an offer in place we will work with your bank to get them to accept the offer and waive the balance of your debt.
Through the short sale negotiation process under the Home Affordable Foreclosure Alternatives Program (HAFA), we will work with your lender to secure up to $10,000 for you as relocation assistance. These funds will be paid to you by the bank at the time of closing. Furthermore, we will make sure the lender and buyer pay all necessary closing fees and costs so you do not have to pay additional funds at the time of sale. Lastly, we will secure a waiver of deficiency, meaning that when the short sale is complete you walk away from the property debt free and the bank will not able to pursue you in court for the difference between what the property sold for and the amount of money you owed them.
Are you eligible for a short sale?
The simple rule of thumb to determine if you are eligible for a short sale is if the market value of your property is less than what you owe the bank. If you fall in this category and need to sell your home, a properly negotiated short sale can be a solution for you.
Who can benefit from a short sale?
- Homeowners struggling to make their mortgage payments who no longer wish to keep the property
- Homeowners who have applied and been denied for a loan modification
- Property investors who bought at the height of the market and their property value has collapsed.
- Property investors whose rental properties are not producing enough income to cover their property expenses (i.e. mortgage payments, homeowners’ insurance premium, property taxes and association fees).
- Homeowners who need to relocate out of town for job or family reasons and cannot afford to carry the mortgage
Deed in Lieu of Foreclosure
If you attempt to do a short sale but do not get any offers for your property or the offers are too low so your lender will not accept them, a deed in lieu of foreclosure might be the right solution for you.
A deed in lieu of foreclosure is the process by which your lender will accept the title to your property as full payment and satisfaction of your mortgage. While it sounds simple, qualifying for a deed in lieu of foreclosure requires strategic negotiations with your lender. At First Legal, we are prepared to assist homeowners negotiate a deed in lieu with their lenders. Through the negotiation process, under HAFA we will request your lender cover up to $10,000 in relocation assistance and waives any unpaid balance on your loan.
For answers to the most common questions you might have please visit our Frequently Asked Questions page or schedule a free consultation with one of our attorneys.