Lakeland Florida Short Sale Information - What is a Short Sale?

Short Sales in Lakeland, Florida are becoming more and more common in recent months and notably though, a lot of homeowners still don’t have any idea what a short sale is and what are the required documents the lender requires.

First of all you the property owner, the most important thing you must know and understand that you the property owner and seller of your home, you still own your home, you still hold the title to your property, and more importantly you still make the decision of what offers will be accepted or not. Your bank/lender does not own your property.

Your bank/lender may have filed a Lis Pendens and foreclosure proceedings may have begun, but until your property is sold on these local courthouse steps, you the owner are still the person that rightfully and legally owns the home.

What is a short sale?

A short sale is when a lender accepts less than the mortgage balance to avoid a possible foreclosure auction on the court house steps or bankruptcy.

In this case instead of buying the home from the seller, a buyer is purchasing directly from the lender for a discount. The reason for this sale is straightforward, banks do not like surplus inventory and bad loans on their books; therefore if they see an opportunity, where they can sell the property without a great loss, they will approve such a sale. Moreover, banks could lose a lot more money if the property goes to auction as well as additional fees they would have to pay to the court. Taking the discount before the property goes to auction is financially feasible for the banks.

What are the required documents the lender requires?

However, there are documents required by the lender to approve such a short sale.

Handwritten hardship letter explaining your hardship
The last 2 years of tax returns for all signers on the mortgage
The last 2 pay stubs for all signers on the mortgage
Completed financial statement that your Realtor® received from your lender.
There are more documents you or your agent will have to put together after an offer is received from a buyer.

What does not constitute a short sale?

If you purchased your home at the height of the market and now your home value have declined does not constitute a short sale.

If you used the home as your ATM machine in which you may have maxed out the equity of your home and are now in debt does not constitute a short sale.

Just because you want to move out of your house and your house is worth less than what you owe your lender does not constitute a short sale.

A short sale is not an escape clause – short sales are only for homeowners that are in dire need for help. It is an option that requires due diligence on my part as your Realtor® and it requires your honesty as the seller.