Seven Tips to Ensure Short Sale Success in South Florida

A short sale is an option many homeowners pursue when they owe too much on their mortgage and they cannot afford to pay it off. While a short sale is a great way for homeowners in South Florida to avoid the foreclosure process, not every short sale is a success. If you are facing foreclosure, the chances are good that you just want to put the whole process behind you, which may include going through with the short sale. To ensure the process goes smoothly, and that it is as successful as possible, follow the seven tips below.

Know Who to Ask

Unfortunately, you cannot unilaterally decide to sell your home through a short sale. You must first ask your lender if you can put the property up in a short sale, and they must approve your request. This is one reason it is so important to work with a South Florida foreclosure defense lawyer when you cannot afford to pay your mortgage. A lawyer can tell you what the lender will ask you, and what they will expect, to give you the best chance of having your request approved.

Many homeowners may immediately think of one lender they have to obtain approval from when they are considering a short sale. However, there is a very good chance that you have to obtain permission from more than just one lender.

Make a list of every lender that has a claim to your property, which may include:

• The lender that holds your first, second, or third mortgage
• The lender that holds your home equity loan
• Your condominium association, or homeowners association
• Any contractor that may have placed a lien on your home

Create a full list and contact all lenders and contractors as soon as possible. Ask what documents they will need to consider a short sale, so you can start preparing them.

Assemble Your Team

When going through a short sale, you will need to work with many different professionals. Find a real estate agent that has experience with short sales, a foreclosure defense lawyer in South Florida, and an accountant, if you do not already have one. Interview at least three people for each professional you need to work with and ask them about how successful they have been with past short sales and the amount of experience they have.

Gather All Necessary Documents

There is a lot of paperwork involved with a short sale and it is important to have your documents ready before you start the process. If you have to delay the sale unnecessarily simply because you were not prepared, it could put the entire sale at risk. When speaking with your mortgage lenders and creditors, ask them what documents they will need and make a list so you do not forget any important details.

You will likely have to provide your listing agreement that outlines the asking price for the home and other details associated with the sale. You should also draft a hardship letter, which will detail the reasons you need the short sale, which a South Florida foreclosure defense lawyer can help you prepare. Lastly, you should also collect documentation that outlines your income, as well as copies of your state and federal tax returns for the previous two years.

These are just a few of the important documents and records you will need when putting your home up for sale through a short sale. Always speak to everyone involved in the sale and inquire about what documentation they will need.

Expect Delays

Short sales can take a long time. Federal law does stipulate that lenders that participate in the federal Making Home Affordable loan modification program must reply to short sale requests within ten days. Still, not all lenders participate in this program and even those that do are not always compliant with the law. There is a possibility that it could take weeks, or even months, to hear back from your lender about whether or not they have approved your short sale request. If you have to negotiate with multiple lenders or lien holders, that amount of time maybe even longer.

It is also important to note that the above timeframes apply only to hearing back from your lender. If they do not agree to your terms or they make a counteroffer, you can expect even more delays.

Expect Demands

Lenders and lien holders may have certain demands when you ask for a short sale. For example, they may want you to sign a promissory note to pay the remaining balance on your loan once the sale is complete. Not being prepared for these demands can make them unsettling when they arise. A foreclosure defense lawyer in South Florida will help you anticipate what demands you can expect, and ensure they are reasonable.

Understand the Tax Implications

If your lender agrees to forgive a portion of your mortgage, it may have serious tax implications for you, as the forgiven amount is considered income by the IRS. Speak to a lawyer who can advise on whether you can exclude the amount on your tax returns under the Debt Cancellation Act or the Mortgage Forgiveness Debt Relief Act.

Understand How Your Credit will be Impacted

Many people choose to go through a short sale because they do not want a foreclosure to negatively impact their credit score. However, if the lender reports the short sale to the credit reporting bureaus, your credit score will still take a hit, so it is important to ask if they will notify the agencies.

Call Our Foreclosure Defense Lawyers in South Florida Today

If you are facing foreclosure and believe a short sale is the best option for you, speak to our South Florida foreclosure defense lawyers today. At Loan Lawyers, our skilled attorneys can prepare you for the short sale, and help ensure yours proceeds as quickly and smoothly as possible. Call our Florida foreclosure defense lawyer today at 954-807-1361 or fill out our online form to request a free consultation with one of our knowledgeable attorneys.

 

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