Miami Realtor Addresses F.A.Q. Regarding Short Sale

Short Sale Frequently Asked Questions

What is a Short Sale?

A Short Sale takes place when you owe more than what the home is currently worth, you can demonstrate financial hardship and you need your lender’s approval to sell your home. If you have a second mortgage or a home equity line, they too must approve the sale of your home. In essence, the term comes from selling your home for less or “short” of what is currently owed.

Why must my mortgage company(s) approve the transaction?

A mortgage loan or home equity line is usually a secured loan and have liens against the property. In order for the new Buyer to take title to your property, the home needs to be free of liens. The current liens created by the mortgage or mortgages on your home need to be satisfied. Under normal circumstances, if you sell your home for more than what you owe the current liens are satisfied. If you sell your home for less than what is owed, then each mortgage company must agree to accept a lesser amount than what is owed in order to release the lien to allow the new Buyer a clear title.

How do I get a Short Sale approval?

When you market your home with a Realtor who specializes in Short Sales, the Realtor will price the home at current market value and will find a Buyer interested in your home. The Realtor will work with you in preparing a hardship letter along with bank statements, tax returns and other financial documents to submit your offer to the mortgage holder. Your Realtor will work with his team to work through all of the hurdles and processes each bank has to ultimately secure an approval.

How long does the Short Sale take?

It depends on each lender’s workload and requirements. Sellers and buyers must be prepared to wait at least three to four months to receive the approval from each lender.

If my mortgage company agrees to the Short Sale , do I still owe the difference?

There are many variables and unfortunately, we are not aware of the final terms of the Short Sale until we receive the Approval Letter. During the negotiation the lender will sometimes discuss if they will require cash at closing from the Seller, a Promissory Note or simply reserve the right to persue the deficiency.  In most circumstances a full release can be negotiated.

You should seek professional advice from an attorney, certified public accountant or other professional as to the credit, legal and tax consequences of a short sale.

Sergio Rebollo Jr.
Short Sale Specialist
Real Estate TeamMates
www.SergioRebollo.com
786-866-7358