Miami Real Estate: Four Tips for a Successful Short Sale

A short sale can be an excellent solution to a financial problem, but it’s not an easy process. Here are four tips for ensuring your short sale is successful.

Hire a lawyer

There are things that you need to protect yourself against in a short sale, and a lawyer can make sure the contracts you sign are what you need and aren’t going to create problems for you down the road.

Beware of deficiency judgments

Florida is one of the states that permit deficiency judgments after a short sale. What is a deficiency judgment? If you owe $500,000 on your house, but it sells in a foreclosure for $200,000, $300,000 is the deficiency. It’s possible for the lender to try to collect the $300,000 after the foreclosure.

The deficiency is one of the negotiable aspects of a short sale. Sometimes lenders don’t mention the possibility of releasing you from liability on the deficiency, but you can ask to negotiate a waiver. You will sometimes be required to pay something toward the deficiency.

To be on the safe side, the short sale agreement should explicitly state what’s been agreed upon regarding the deficiency. If the lender waives the right to the deficiency, this needs to be spelled out. This is one area where a lawyer can be very helpful.

Find a real estate agent who is experienced in short sales

A short sale is very complicated. A real estate agent who knows the ropes will really benefit you. Interviewing several real estate agents is a good idea. They should have training in short sales as well as significant direct experience.

Get your documents in order

A seller in a short sale will be required to prepare a financial package for the lender, which includes bank statements, tax returns, copies of any savings or brokerage account savings, a financial worksheet, and a letter outlining the hardships that are forcing the seller into a short sale. Get this information and keep it organized!

A short sale is a complicated and sometimes lengthy process – but we can help! Please contact us today to learn more.