A Florida short sale is when the lender agrees to buy back a property from borrower, for less than what you still owe on the property.
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 “underwater”, meaning it is worth less now than the amount you borrowed from the bank.
In most cases, the lender, as part of the negotiated sale, will release you from paying the deficiency, which is the difference between the short sale price and the original mortgage amount. However, that is not an automatic, and you must consider that before agreeing to a short sale
Advantages of a Florida short sale?
A short sale, while still doing damage to your credit, will ultimately do far less harm than a foreclosure would. A foreclosure will show up in public records and can lower your credit score from anywhere from 175-300 points. A short sale will turn up as “settled for less than the full amount” or similar language on a credit report, but it is not public record and as such will not be known to employers or anyone looking at your credit history. Any late mortgage payments will also show up on your credit history. If you do a short sale, and the rest of your credit history is good, your score might go down by only 50 or 60 points.
There are financial incentives for homeowners as well. There are additional fees and costs to both the borrower and lender which are mitigated when doing a short sale. In addition, banks may offer financial incentives to sell your home via short sale.
How do I qualify?
Bottom line, you must be proactive and not wait until foreclosure notices are sent to your home before you start requesting 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 RTEC will help you navigate through the short sale process and get you in to a home you can afford.