Short Sales Transactions
A short sale is a sale of real estate where the owner owes more to the bank (loan, mortgage) than the property is worth. Often a bank (lender) will allow a short sale if they believe that it will result in a smaller financial loss than proceeding with foreclosure.
Common causes of distressed homeowners and businesses (sellers) include:
- Declining real estate values
- Unexpected health conditions making mortgage payments difficult
- Lending rate increases on adjustable rate loans
- Over-extended borrower with multiple mortgages
- Job loss or transfer (relocated)
In Florida, if you are looking to participate in a short sale, it is recommended that you hire an experienced real estate and foreclosure defense law firm like KALIS, KLEIMAN & WOLFE to help oversee and negotiate the transaction as they are often more complicated and time consuming than an average real estate sale. Next you will need to contact your current lender to discuss the criteria for doing a short sale. The bank or lender may require that the property be listed and under contract before submitting the sale to them. They may also require proof of current financials and tax forms. Once a package has been submitted to your lender, it will need to go through their approval process between them and the current investor. This may take anywhere between 3 weeks to 2 months, so patience is needed in this process.
The real estate attorneys at KALIS, KLEIMAN & WOLFE work with sellers, buyers, and realtors to negotiate and draft sales contracts which include the conditions of the short sale. We also negotiate 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.
Benefits of Short Sale
Lenders: 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.
Owners: With a short sale, the property owner typically doesn’t have a foreclosure or a deficiency judgment and they hope to walk away with their credit mostly intact.
Buyers: Buyers and investors can often save money purchasing a property in a short sale; however, each sale and transaction is unique and comes with risks (declining markets, homes sold as is).
Whether you’re behind on your payments or simply have a mortgage that’s substantially underwater or you are a lender looking for timely short sale payoffs, contact KALIS, KLEIMAN & WOLFE today. Depending on the individual situation, there are potential remedies that the experienced real estate and foreclosure attorneys at KALIS, KLEIMAN & WOLFE may be able to pursue on your behalf.