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The term short sale has become very popular in recent years but many people are still not sure exactly what it is. A short sale happens when the bank allows you to sell the home at a price which is less than the amount that you owe on the mortgage(s). What is leftover of the mortgage is many times forgiven by the bank, which means that you can avoid foreclosure on the home and the blemish on your credit report.
Obtaining a short sale is a rather complicated process that requires a lot of patience and persistence. The first step is to ask your lender if you are eligible to short sell. Next you must put the house on the market and attempt to sell it, keeping in mind that closing on a home in a short sale will take longer than a traditional real estate closing. Once an offer is obtained, it is submitted to the lender for review, along with documentation supporting the financial hardship, and the lender considers whether it will approve the offer details (buyers, purchase price, net payoff, etc.). Once an approval is obtained, the closing may take place if it is a cash offer, or, if the new buyer is obtaining financing, the buyer’s lender will then begin to process the new purchase money mortgage.
As mentioned earlier, the short sale process is a rather complicated one, and can be very difficult to proceed on your own. It is highly recommended to seek the help of a qualified short sale attorney to guide you through the process from the very beginning. Seek a free consultation with an attorney before starting the process and seek help in determining if you are qualified for a short sale. If so, the attorney can tell you what to expect from the process and guide you through it step by step.
Florida’s Housing Market Crisis
Florida has one of the highest rates of underwater mortgages, according to a recent report on NBC News. A shocking 44.2%of homes throughout the state have negative equity, meaning that the homeowner owes more on the mortgage than the house is worth on the real estate market. Making matters worse, 17.4%of home mortgages in the state are either in foreclosure or have passed the 90-day past-due mark, giving Florida the highest foreclosure rate in the nation. This is due in large part to the fact that when the housing bubble popped in 2008, home values in this state dropped by more than 40%, leaving thousands of homeowners with properties that are worth far less than what they paid for them and with little or no hope of ever building equity in the future.