Several times weekly, I am asked to define what a Short Sale is, how the process works, where to find Broward Short Sales, how to start a Short Sale, and more, so I prepared the following information for your use as Sellers interested in selling a Home as a Short Sale or as Buyers interested in purchasing a home sold as a Short Sale. The following information is NOT comprehensive, but is intended to provide you with basic, important details regarding the process.

What is a Short Sale?

A completed Short Sale occurs when a Lender agrees to accept a Purchase amount for the Home (from a new Buyer) that's less than the Mortgage amount owed by the existing Owner. Typically, a Short Sale occurs when the value of the property is less than the existing Mortgage amount and/or because the Owner no longer has the ability to continue making payments. HOWEVER, please note that not every Home is approved for a Short Sale! Read below for details.

IMPORTANT POINTS FOR SELLERS

1. DO NOT AVOID CONTACT with your Lender.
2. The Clock is ticking. Do not delay listing your Home for Sale. At this point, your goal is attempting to find a QUALIFIED BUYER who will place an Offer on your Home, have their Offer approved by the Lender, and complete purchase of your Home before the Bank repossesses it.
3. Unlike a regular Sale where you're responsible for paying Broker Commissions for the marketing of your home, that IS NOT the case with Short Sale Listings. Brokers & Agents are paid BY THE LENDER from the proceeds they receive from the Buyer for the purchase of your Home.
4. If you're interested in negotiating a Short Sale, you must complete a Short Sale application through your Lender. The Short Sale Application package includes items such as the Listing Agreement showing that you're actively marketing your Home for Sale through a Broker, Tax Returns, Financial Statements, W2s, Homeowner or Condo Association Lien Status Letters, and a Hardship Letter.
5. Every Lender will require that you provide documentation of your Hardship (in other words, the Lender will require that you provide a written explanation of why you're unable to continue making your Mortgage payments) and the Lender will determine whether the Hardship you explained meets their criteria of "Hardship" or not. Simply owning a Home that's worth less than your purchase price is not sufficient hardship. A few examples of Hardship include Payment Adjustments (such as Adjustable Rate Mortages--ARMs), Family Illness, Death, Unemployment, Divorce, Separation, Military Service, etc.
6. In reviewing your Income, Assets, and Hardship, the Lender will determine if you qualify financially for a Short Sale.
7. Other items that can affect the sale of your home include delinquent Taxes, delinquent Association fees, various Liens, etc.
8. The Lender will not allow you to receive any profit from the Short Sale.
9. Your Credit Score WILL be decreased by a Short Sale, although your Credit Score decrease for a Short Sale is less than the Credit Score decrease experienced in a Foreclosure or Deed in Lieu of a Foreclosure.
   
10. If you receive a qualified Offer for the purchase of your Home, the Offer will be submitted to the Lender along with your Short Sale Application package.
11. If the Lender accepts the Offer, they will order a Broker Price Opinion (BPO) which they use to determine the current Market Value of the home. The Lender will use the BPO to determine the purchase price that they will accept from the Buyer.
12. Carefully evaluate if you absolutely must sell your home. Listing your Home for Sale does not guarantee its' sell, nor are there guarantees that a Buyer will place an Offer, or that the Lender will accept the Buyer's Offer. Inventory of homes for sale in our current market is high, so if you do not absolutely have to sell right now, then wait until a future time when conditions are better for Sellers (right now, we're in a Buyer's Market, not a Seller's Market). Review my Broward Real Estate Market Report.
13. Lenders are swamped with thousands of Short Sales and Foreclosures and, unfortunately, are understaffed to handle the caseload. Because of that and because of the required steps to process Short Sale requests, the Short Sale Offer and purchase process can be lengthy. Although some Short Sales close quickly once an Offer has been received (within 30-45 days), many others are known to have taken more than 2-3 months before even receiving a response from the Lender as to whether the Offer will be accepted or not.
14. The listing of your Home will be competing with other Homes on the market including non-Short Sales that are competitively priced.
15. If you have more than one Mortgage on your home, the Short Sale process will typically take longer than if you have only one Mortgage.
16. I am not an Attorney, nor an Accountant. I advise you to consult your Financial and Legal Advisors regarding the ramifications of a Short Sale or Foreclosure.

1. Review the points I included for Sellers above as they will help your understanding of the Short Sale process.
2. The List Price shown on a Home offered as a Short Sale DOES NOT EQUAL the amount that you will pay for the Home!!! When you submit an Offer to the Lender, they will determine the current Market Value of the Home and will decide how much of a discount they're going to offer off of the existing Mortgage amount. Factors affecting their decision include the current market value of the Home, how much home inventory they own, and other factors.
3. Lenders are requesting "highest and best Offer" from Buyers, so ask me for details about how to structure and place an Offer that's based in reality, an Offer that's more likely to be accepted. I and many other Real Estate Professionals are seeing numerous Buyers' lowball Offers being rejected by Lenders. Just because home inventory is high and because Lenders do not want to own Real Estate DOES NOT MEAN that they are "giving homes away" and that they're accepting every Offer that they receive. If it were so easy and if Lenders were indeed giving homes away, the current inventory of Broward homes for sale would be A LOT lower and home sales would be A LOT higher.
4. The Lender will first have to determine if the Homeowner qualifies for a Short Sale. Not all Homeowners qualify for a Short Sale. The Lender will review the Homeowner's Income, Assets, and nature of their Hardship to determine if the Owner qualifies for a Short Sale.
5. Other items that can affect the sale of the home include delinquent Taxes, delinquent Association fees, various Liens, etc.
6. When you place an Offer on a home offered as a Short Sale and submit the Offer to the Lender, the Lender will determine if they will ACCEPT or REJECT your Offer. Price negotiations are conducted through the Lender. Although Homes offered as Short Sales are still owned by the Owner (these homes are also known as Pre-Foreclosures), the Homeowner in Pre-Foreclosure DOES NOT determine the amount that will be accepted for the purchase of their home.
7. Get Pre-approved through a Lender BEFORE starting your home search in order to determine how much home you can afford. Home inventory is high in many segments of our local market and we have to be able to narrow your home search first based on price and then other search criteria. It's a complete waste of everyone's time and resources to view homes that you cannot afford. If you're planning for your purchase to be a Cash purchase, a Letter from your Financial Institution verifying your available funds to purchase a home will be necessary.
8. The Lender will determine if you qualify financially for the Short Sale that you placed an Offer on.
9. Lenders are swamped with thousands of Short Sales and Foreclosures and, unfortunately, are understaffed to handle the caseload. Because of that, other reasons, and because of the required steps to process Short Sale requests, the Short Sale Offer and purchase process can be lengthy. Although some Short Sales close quickly once an Offer has been received (within 30-45 days), many others are known to have taken more than 2-3 months before even receiving a response from the Lender as to whether the Offer will be accepted or not.
10. IF YOU ARE NOT PATIENT, DO NOT ENGAGE IN A SHORT SALE!!! Repeat this a few times! Short Sales ARE NOT for Buyers who are not patient or who have a short, specific timeframe for purchasing. I've experienced several Buyers who ignored my advice regarding this who later regretted not listening.
11. Other interested Buyers can submit an Offer on the same Home that you placed an Offer on, so it can be a competitive process where the Buyers involved are all hoping that their Offer is the one that's approved by the Lender.
12. Short Sales are not the only great deals available for Sale. Many Sellers have reduced their prices in response to market conditions, so there are other Homes that are priced competitively that can be purchased through a normal sale process, without the necessity of Short Sale and Lender approval and related issues.
13. I've outlined information about Short Sales in this post, however, Foreclosures (properties that the Bank has repossessed) are also available for sale. Foreclosures typically require a much more specific timeframe for closing (unlike the lengthy time for Short Sales), however, item #9 applies here as well (other Buyers can all submit Offers). Additionally, Foreclosed Homes are sold "As Is", which means that the Bank is selling the Home in its' current condition, has already determined its' current market value and WILL NOT negotiate the price with you based on repairs or updates that might be necessary. You will pay for and complete an Inspection prior to purchase and will decide to purchase or not purchase the home based on the Inspection results (unlike a non-Foreclosure sale, you will not be able to use the Inspection results as a point of price negotiation or ask that repairs be completed prior to your purchase). Be advised as well that some Foreclosed homes are in varying states of disrepair. Additionally, the Electricity might not be on, so it will be your responsibility to pay for connection of the Electricity prior to the Inspection in order to test the Electrical components of the Home.

If you are a Buyer who wants to buy a Ft. Lauderdale Short Sale, Ft. Lauderdale Foreclosure, Broward Short Sale, or Broward Foreclosure, contact me for information about available Foreclosures and Short Sales. As a member of the S.E. Florida MLS and Greater Ft. Lauderdale Association of Realtors, I have access to a Foreclosure database which allows me to search available Pre-Foreclosures and Foreclosures based on a variety of search criteria, including but not limited to City Names, Zip Codes, Subdivision Names, Building Names, Filing Date, Mortgage Amount, etc. The database pulls information from Tax Records, so it's not limited only to properties that are listed for sale through the MLS and it has far more powerful search capabilities than the local Tax site.

Search Ft. Lauderdale Homes for Sale, search the Ft. Lauderdale MLS and Broward MLS.

Vickie Arcuri, Realtor®
EWM Realtors
1700 E. Las Olas Blvd., Suite 103
Ft. Lauderdale, FL 33301
Cell: (954) 708-9309
vickie@vickierealestate.com
Fort Lauderdale Homes for Sale

Contact me if you're interested in buying or selling Ft. Lauderdale Real Estate for Sale, Broward County Real Estate for sale, Ft. Lauderdale Beach Homes for Sale, Ft. Lauderdale Condos for Sale, Homes for Sale near Ft. Lauderdale Beach, Broward County Luxury Homes for sale, Broward County Waterfront Homes for sale, Ft. Lauderdale Luxury Homes for Sale, Ft. Lauderdale Luxury Real Estate for Sale, or Ft. Lauderdale Waterfront Homes for Sale. I am available to assist you or someone you know with:

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