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• A definition of a Short Sale is the sale of real property where the market price of the property is less than all mortgages and liens held against that property. To facilitate a sale in Florida the lender and the seller engage in a “short sale” where the lender takes control over which “offer” they will be accept and they dictate the terms of the sale.

• The IRS treats short sale deficiencies differently depending on whether the short sale is a homestead/primary residence or an investment property.

• You should speak with a lawyer, CPA or financial adviser before deciding that a short sale is the best alternative as opposed to other remedies such as a loan modification.

• Credit scores will suffer but less than a foreclosure.

• To initiate a short sale, call your first mortgage holder and request a short sale package. Ask if they have any MLS “listing” time requirements. Then get your property listed in the MLS (if it isn’t already listed). Some lenders may require a 3 month incubation period to prove that no sale might occur at a price that doesn’t result in a short sale. 

• The listing broker will need to determine value (BPO). Setting a random sales price without extensive analysis is not advised.

• All contracts/offers are contingent on third party approval (lender) as well as any commissions offered in the MLS to cooperating brokers/agents.

• Short sale “listing agreements” have language to protect the seller. ”The seller’s obligation to perform on this contract is subject to the approval of the lien holders on the property. The seller may cancel this listing agreement prior to the ending date of the listing period without advance notice to the broker and without payment of a commission or any other consideration, if the seller tenders Deed-in-Lieu of Foreclosure.”

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