Florida Short Sales: What Homeowners Need to Know
If you owe more on your mortgage than your home is worth, or you're having difficulty keeping up with your mortgage payments, a short sale may be one option to consider.
A short sale involves selling a home for less than the amount owed on the mortgage, with the lender or mortgage servicer's approval.
Understanding your options early can give you more time to make an informed decision.
What Is a Short Sale?
A short sale is a sale of a home for less than the amount owed on the mortgage. Because the sale proceeds may not fully satisfy the mortgage debt, the lender or servicer must agree to the transaction.
A short sale is an alternative to foreclosure, but it does not automatically mean that any remaining debt is forgiven. The terms of the transaction and applicable law matter.
Important: Homeowners should ask the lender or servicer how any remaining deficiency will be handled and obtain the terms in writing.
CFPB specifically recommends getting a deficiency waiver in writing when applicable.
When Might a Short Sale Be an Option?
A short sale may be considered when:
The home's current value is below the mortgage balance.
The homeowner is experiencing financial hardship.
Keeping the property is no longer financially sustainable.
Other loss-mitigation options aren't workable.
Selling the property may be preferable to allowing foreclosure to proceed
A short sale isn't the only answer.
Other possibilities may include:
Selling the home normally
Loan modification
Repayment plan
Forbearance
Deed-in-lieu of foreclosure
Other lender or servicer loss-mitigation options
Explore Your Options Before Choosing a Path
Learn about foreclosure, pre-foreclosure and alternatives in our [Florida Foreclosure Guide].
What Are the Alternatives to a Short Sale?
Traditional Sale
If the home's value is sufficient to satisfy the mortgage and selling costs, a traditional sale may be possible.
Repayment or Forbearance
Depending on the circumstances and loan type, the servicer may offer ways to address missed payments or temporarily reduce or pause payments.
Loan Modification
A mortgage servicer may have programs that modify loan terms or payments for eligible borrowers.
Deed-in-Lieu
In some situations, a homeowner may be able to voluntarily transfer the property to the lender rather than proceed through foreclosure.
What About Foreclosure?
Foreclosure is another legal process available to a lender. It is important to understand the process and alternatives rather than simply allowing it to move forward without investigating your options.
How Does a Short Sale Work?
01
Evaluate the Situation
Review the mortgage balance, property value, financial circumstances and available alternatives.
02
Determine Whether a Short Sale May Be Appropriate
A short sale should be considered alongside other potential solutions.
03
Prepare and Market the Property
The property is prepared for sale and marketed to prospective buyers.
04
Submit the Offer for Approval
The purchase contract and required documentation are submitted to the mortgage servicer or lender for review.
05
Complete the Closing
If the lender approves the transaction and all other requirements are satisfied, the sale can proceed to closing.