Written by: Nicole M. Garcia, Esq.
When facing a Foreclosure action knowing what options are available is essential. If the Homeowner wishes to keep the property some of the loss mitigation options possibly available are loan modification, forbearance agreement, and repayment plan. Once those options have been exhausted there are other options, which allow the borrower to voluntarily turn over the property in order to avoid facing the consequences offoreclosure. One of the options available is selling the property. If the property has equity then it will be enough to satisfy the defaulted loan. However if the property does not have any equity then the next best option selling property via a short sale.
A Short Sale occurs when the balance owed on a home mortgage exceeds the market value of the property. It requires finding a buyer to purchase the property at the market price and negotiating with the lender to obtain approval to sell the property at the market price and for the lender to release their lien on the property.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. Many people explore this option after the lender has denied a loan modification or rejected a Deed in lieu of foreclosure.
More often than not, lenders will explore this option with the borrower because it helps them save money on the legal fees that come along when filing a foreclosure action, make repairs and improvements, cover holding costs and the costs of trying to re-sell the property. Additionally it brings closure to the issue of default and the foreclosure matter overall. However, once an offer is on the table and the application, appraisal and documentation have been submitted to the lender for review, it is ultimately there choice as to the approval or denial of the short sale.
In Florida, when exploring the option of a short sale, it is extremely important that you choose a real estate agent that has local knowledge and experience in selling homes but also dealing with the process of a short sale. It’s critical to the success or failure of the deal.They need to have the experience and skill to know exactly the true value of the property, and what it’s worth to you and also how to communicate and cooperate with the attorney defending you in the foreclosure lawsuit (*assuming you a lawsuit was filed)
- Benefits of a Short Sale:
- For the Homeowner (Seller): a short sale allows the Homeowner in avoiding a foreclosure judgment and the negative credit effects as a result of the foreclosure. Additionally, it may result in a waiver of any deficiency left in on the loan and any additional cost.
- For the Lender: a short sale allows the lender to avoid the extra costs associated with the foreclosure process, the repairs and improvements of the property, cover holding costs, and the costs of trying to re-sell the property.
- For the Buyer: a short sale can provide them with the opportunity to purchase a home at or below market value. Another benefit to the Buyer is that short sales are generally owner occupied and, therefore, the property tends to be in better condition than a property owned by the bank.
If you are currently struggling to make your monthly mortgage payments or have fallen behind, it is important to consult an experienced attorney to learn how you can protect your investment. There are several things you can do to avoid foreclosure, especially if you act as soon as possible. For more information on the foreclosure process, contact The Law Office of Ray Garcia, P.A. at 305-227-4030 or legal@raygarcialaw.com, anytime.
Law Office of Ray Garcia, P.A.
Latest posts by Law Office of Ray Garcia, P.A. (see all)
- Parenting Plans for Children With Special Needs - April 15, 2024
