Definition of short sale: A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage.
Due to the inflated housing market of 2004 - 2006, buyers who purchased in that time frame may now owe more than their home is currently worth. Someone looking to sell after only owning their home for a few years may not be able to sell for a high enough price to pay off their current mortgage. This is leading to many short sales in the Orlando real estate market, and plenty more foreclosures.
A few ideas to think about when it comes to buying an Orlando short sale:
- In order to purchase a home that is in a short sale situation, you will need to understand the process of working with both the seller and lender/bank.
- Negotiations will primarily be with the bank, but the seller still has to agree on the final sale price.
- There are more steps to closing a short sale deal than your normal buyer/seller real estate transaction.
- It can take up to 180 days to close on a short sale, and sometimes longer.
- Short sales are a tax liability to many sellers, depending on if it is the original loan or an investment property.
A few ideas to think about when it comes to selling your home as a short sale:
- You must list your home with a Realtor in order to be considered for a short sale
- You must be able to show the bank your financially unable to pay for the home
- You must be able to show the bank that your home is worth less than what is owed, with closing costs included
- The process will take much longer than a normal sale
- There are tax consequences to most types of short sales