How To Buy A Short Sale Home In Florida
As we mentioned in our article on Florida Foreclosures, the bursting of the sub-prime mortgage bubble resulted in a sad and regrettable reality as the state of Florida topped the list of states with the highest rates of foreclosures and short sales. The situation has been dire for many homeowners over the last many years as they were forced to lose their homes.
how to buy a short sale home in florida
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While the opportunities in this sector are still present, and in many instances a great way to achieve value, it is important to understand both the intricacies and the process of Florida short sales if you are going to go this route.
A short sale, or deed in lieu of foreclosure, can be defined very simply: where the property sells for less than is owed to the bank. This becomes an option when there is a hardship that requires the sale of a property and the homeowner does not have the ability to pay the difference between the net proceeds from the sale and the amount owed on the mortgage.
To illustrate the challenges in dealing with Florida short sales, we share the story of a property we had listed for two years in a depreciating market. Initially, we had a buyer willing to buy the house for $1.2 million, but the lender was not ready to accept it.
15 months later we worked with a negotiator at the same lender with years of experience who is paid for performance. The difference: We went from contract to closing in 60 days for 280,000 dollars less. Like all things in life, a short sale is all about the people. In this case, the Lender actually wrote off (took a loss on) the additional $280,000 and released the Borrower from the additional monies.
Florida short sales can go through as quickly as 60 days, but more typically take up to six months. The buyer has to be prepared to wait out the process as the bank and the seller hammer out the details of what the lender is prepared to accept.
Are you the kind of person who is always looking for a deal, or maybe a way through the back door? If so, a short sale home may help you buy a home for a significantly lower price than you normally would have through a traditional home sale.
Once the short sale goes through, the lender receives the profit of the sale to settle the loan. There is a tradeoff to this win-win, however. The short-sale process tends to be more time consuming and labor intensive than the traditional buying process.
A short sale offers a way for a seller and a mortgage lender to avoid foreclosing on a home. Essentially, the lender agrees to accept less than the full outstanding mortgage price of the house, usually because the seller can't pay or owes more on the home than it's worth. The lender would rather recoup some of its money through a short sale to another buyer than undergoing the expense of repossessing the home in foreclosure.
Remember, in a short sale, agents and lenders are the only ones who stand to make money from the transaction. A real estate attorney with experience in short sales can anticipate problems before the offer stage, working to secure a home that's within budget and aligns with your best interests.
And unlike with a foreclosure, a short sale home is likely to be in good condition. Often, the current owner will be still in residence and keeping up basic maintenance. A foreclosure, by contrast, might be in disrepair.
Some home buyers choose to put up with short sale complications because they could buy at a bargain price. But you should be fully aware of the potential issues before considering a short sale purchase.
To avoid losing the home through foreclosure, the owner successfully appealed to the lender for a short sale transaction. But in doing so, he or she lost control of the selling process and any ability to ever reclaim the down payment or any additional equity.
Other times, the lender may pursue a deficiency judgment against the borrower through the courts in an effort to recover the shortfall. A homeowner who asks for a short sale should try to get a waiver to prevent the lender from trying to recover the lost money in the future.
Because of their massive foreclosure backlogs, banks are more willing than ever to allow borrowers to walk away legally via a short sale, often without a deficiency. In some cases the bank will offer you money, sometimes as much as $35,000 depending on the lender, to agree to the short sale.
In order to complete a short sale, families in risk of foreclosure should hire an attorney experienced in short sales to work with their lender. The attorneys at Oppenheim Law are experienced in Florida real estate law, including short sales.
You can expect the short sale process to take a few months, but the exact timeline will depend on how long each step takes. You can expect to spend up to 30 days waiting for the bank to receive the file, up to 30 days with each negotiator you need to work with, and roughly two to eight weeks waiting for final approval. Any step in the process could be extended by complications, such as application errors, but it could also go faster under more favorable conditions."}},"@type": "Question","name": "How often do banks accept short sale offers?","acceptedAnswer": "@type": "Answer","text": "The answer here varies significantly by the offer. An extreme low-ball offer is much more likely to be rejected. There could also be issues with the application, or the seller might not qualify for a short sale, and those situations would increase the likelihood of the offer getting rejected. Ask a real estate agent who has experience with short sales in your area for a better idea of how to craft an offer with a high likelihood of being accepted."]}]}] .cls-1fill:#999.cls-6fill:#6d6e71 Skip to contentThe BalanceSearchSearchPlease fill out this field.SearchSearchPlease fill out this field.BudgetingBudgeting Budgeting Calculator Financial Planning Managing Your Debt Best Budgeting Apps View All InvestingInvesting Find an Advisor Stocks Retirement Planning Cryptocurrency Best Online Stock Brokers Best Investment Apps View All MortgagesMortgages Homeowner Guide First-Time Homebuyers Home Financing Managing Your Loan Mortgage Refinancing Using Your Home Equity Today's Mortgage Rates View All EconomicsEconomics US Economy Economic Terms Unemployment Fiscal Policy Monetary Policy View All BankingBanking Banking Basics Compound Interest Calculator Best Savings Account Interest Rates Best CD Rates Best Banks for Checking Accounts Best Personal Loans Best Auto Loan Rates View All Small BusinessSmall Business Entrepreneurship Business Banking Business Financing Business Taxes Business Tools Becoming an Owner Operations & Success View All Career PlanningCareer Planning Finding a Job Getting a Raise Work Benefits Top Jobs Cover Letters Resumes View All MoreMore Credit Cards Insurance Taxes Credit Reports & Scores Loans Personal Stories About UsAbout Us The Balance Financial Review Board Diversity & Inclusion Pledge View All Follow Us
Budgeting Budgeting Calculator Financial Planning Managing Your Debt Best Budgeting Apps Investing Find an Advisor Stocks Retirement Planning Cryptocurrency Best Online Stock Brokers Best Investment Apps Mortgages Homeowner Guide First-Time Homebuyers Home Financing Managing Your Loan Mortgage Refinancing Using Your Home Equity Today's Mortgage Rates Economics US Economy Economic Terms Unemployment Fiscal Policy Monetary Policy Banking Banking Basics Compound Interest Calculator Best Savings Account Interest Rates Best CD Rates Best Banks for Checking Accounts Best Personal Loans Best Auto Loan Rates Small Business Entrepreneurship Business Banking Business Financing Business Taxes Business Tools Becoming an Owner Operations & Success Career Planning Finding a Job Getting a Raise Work Benefits Top Jobs Cover Letters Resumes More Credit Cards Insurance Taxes Credit Reports & Scores Loans Financial Terms Dictionary About Us The Balance Financial Review Board Diversity & Inclusion Pledge Mortgages & Home Loans Managing a Home Loan Foreclosures and Short SalesThe Complete Short Sale ProcessByElizabeth WeintraubUpdated on October 19, 2021Reviewed byAndy SmithIn This ArticleView AllIn This ArticleDefining a Short SaleThe Typical ProcessBasics for the SellerSeller's PackageWriting an OfferTimeliness From the BankSome Final TipsFrequently Asked Questions (FAQs) Photo: Weekend Images Inc. / Getty ImagesThe short sale process can be confusing to some home buyers and sellers. It can be difficult to explain how a short sale is originated, and the process of receiving approval from a lender can be lengthy.
You can expect the short sale process to take a few months, but the exact timeline will depend on how long each step takes. You can expect to spend up to 30 days waiting for the bank to receive the file, up to 30 days with each negotiator you need to work with, and roughly two to eight weeks waiting for final approval. Any step in the process could be extended by complications, such as application errors, but it could also go faster under more favorable conditions.
The answer here varies significantly by the offer. An extreme low-ball offer is much more likely to be rejected. There could also be issues with the application, or the seller might not qualify for a short sale, and those situations would increase the likelihood of the offer getting rejected. Ask a real estate agent who has experience with short sales in your area for a better idea of how to craft an offer with a high likelihood of being accepted. 041b061a72