Ask the Broker: Please explain the details of a Short Sale

Broker Bryant,

"Please explain me the details of a short sale, or other proposal that you can bring to my case. "


Dear Sinking Fast,

Thanks for contacting me.

A short sale is basically selling your property for current market value and convincing your lender to accept less money than what is owed to release the liens on the property so it can close.

A short sale is an alternative to being foreclosed on.

The short sale will mess up your credit for a couple of years and your lender may or may not release you completely from the liability of the loan.

Since your properties are rentals your lender could possibly ask you to contribute some cash to the deficiency, sign a promissory note or both. Much of this depends on your individual financial situation.

I sold 2 of my personal investment properties as short sales this year and my lender didn't ask me for anything.

The problem is we don't know what they want until we go through the process.

Applying for a short sale is basically just like applying for a mortgage in reverse. We have to show the lender that you can no longer afford to pay the mortgage that you had agreed to pay when you bought the properties.

You will have to provide them with:

  • Financial statement
  • 2 months bank statements
  • 30 day pay check stubs
  • Last 2 years tax returns
  • and whatever else they may ask for.
As well as have a ready willing and able buyer that is already under contract to purchase the unit.

As your Broker my job is to:
  • Place the property on the market
  • Find a buyer
  • Negotiate the transaction
  • Prepare the short sale request to present to your lender
  • Work with your lender on your behalf towards getting an approval to close the transaction.
****Florida is a deficiency State. This means a lender has the option of going after you for any deficiency (the amount owed minus what you give them). You may also be responsible to pay income taxes on the loss.

**** I am not an Attorney or a tax professional and cannot advise you in these areas. It is highly suggested that you speak with an Attorney and a tax professional.

Here is a Short Sale Package that will give you an idea of the information that is needed to start the process. Your lender may also have documents specific to them that will need to be included. Once I know who your lender is I can provide those documents to you.

Also, check out my website at http://CentralFloridaShortSales.com Once there you will see a link in the left sidebar titled "From the Lawyers Mouth" click on it and check out the articles from Richard Zaretsky Esq.

Richard is a Florida Attorney who handles Short Sales. If you want to hire an attorney I highly recommend his services. If you go that way I would still handle getting the property sold and Richard would work for you with your lender.

I hope this helps. Any questions?

Are you facing foreclosure in Florida?


Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

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