Realtor, Jared Dalto
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The Truth About Florida Short Sales and the Process

Please take the time to read this BEFORE YOU CALL US since it WILL answer many of your questions.

The short sale is an in between solution for many homeowners in the various stages of foreclosure. What we mean by in between is it is NOT a way for everyone to rid themselves of their home or condo in Florida. A person must qualify for a short sale in order to complete one. We want you to know the truth so you understand what may or may not happen in the process. If you do not feel the below explanation pertains to you then you probably would not get approved for a short sale.


  1. Above everything else the lender wants to know there is a true hardship you are experiencing. Honesty is the best policy. We expect it from you, as you do from us. A typical client of ours may have:
    • Lost a job
    • Have medical bills or are having a medical procedure
    • Bought a home or condo that’s not worth what they paid for it and have had the home or condo on the market for many, many months
    • Have an adjustable rate mortgage so their monthly expenses have gone up
    • Are going through a divorce
    • Or… name your hardship!


  1. Many lenders have what is called a short sale package. This package consists of items the lender may require for a short sale to be accepted.
  • Hardship letter – details out why you are in the situation you are in and provides specific details as to the difficult financial situation you are experiencing. See the list above for examples of hardship.
  • 2 Years of tax returns – The lender typically requires 2 years of tax returns be provided so they can see how much money you've earned. After all, if you earned a great wage and said you could not pay your mortgage the lender would not approve the short sale.
  • Checking statements – You will be asked to provide the last 2 months of checking statements to show what money is in your checking account.
  • Financial Worksheet – This is provided by the lender and is a form for you to fill out detailing all your debts on a monthly basis. Again, the lender wants to see how much money is going out on a monthly basis and to see if you are in a true hardship.

In a sense the lender wants PROOF you cannot pay your mortgage or you are over your head and the only way out is to sell your home or condo.


  1. The lender may want you to pay back the difference! We put this towards the top since we want you to know the TRUTH UPFRONT! Yes, you could have to pay back the money owed to the lender for the difference the lender lost. For example if you home was bought for $300,000 and the short amount to the lender was $100,000 they could ask for a note from you for the difference. This note is signed by you and will be at terms agreeable to both parties involved.


Bought for      $300,000

Sold for          $200,000

      Loss to lender $100,000


This note is negotiated by our attorney. No extra fees and no retainer!

  1. You want to avoid foreclosure at all costs. A foreclosure will cost the lender and you more money than a short sale so it’s in your and the lender’s best interest to get one done. If a foreclosure happens the lender can file a deficiency judgment against you which is much worse than a short sale!
  • If the lender forecloses on your home the judgment can cost you about $50,000 more than a short sale. So, the $100,000 shorted to the lender becomes $150,000 and it’s a judgment not a note signed by you.

We push first and foremost to get a FULL release and satisfaction of the mortgage.

Since deficiencies or judgments are not secured by the property the terms of the promissory note are usually very flexible. The lender will have you pay what you can afford. There may or may not be an interest rate. Theses notes can be renegotiated after a certain amount of time; say 12-36 months. If you've been paying on time, request the note be marked as satisfied or offer a small settlement if you can.

A “satisfaction” is when the lender agrees to release their lien entirely and no further obligation is incurred. This is the best-case scenario for owners, and something that we work very hard to make happen for clients. The negative side is there may be some tax consequences. The IRS looks at the forgiven debt as “phantom” income, and they may issue the owner a 1099 at the end of the year. This does not mean that you will be responsible for the entire amount. For example: on the $100,000 shorted to the lender is what you would pay taxes on, not the amount you still owe. Congress did pass HB3648 (The Mortgage Forgiveness Debt Relief Act of 2007) but, this is ONLY for owner occupied homes, sorry investors.

A signed note by you is much better than a judgment filed against you!

  1. Time is not on our side. We must act quickly and get the process started immediately. We will do the following to act quickly and start the short sale process:

1. Search for comparable properties on the market so we can get a value for your home or condo

2. Prepare a listing agreement so the property can be placed for sale on the local MLS.

  • There is now a short sale addendum to listing contracts to help protect you. The Florida Bar has created this document to protect a home owner in the short sale process.
  • We have an additional addendum prepared by our attorney which protects your rights even more! This addendum is signed by all parties involved in the short sale including ALL agents representing you and the buyer.
  • Authorization to release letter for the lender. We will have you sign an authorization to release letter so the attorney and ourselves can talk with the lender on your behalf. This includes your loan number, signature(s) and last 4 of your SS#. A letter must be prepared for each loan if more than one.

3. In many cases meet with you to get a signed listing agreement and while there take picture of your home or condo.

4. Place the property on the MLS.

5. When needed reduce the price of the home at intervals so we can locate a ready willing and able buyer.

6. Educate the buyer’s agent on how we handle short sales. We want a buyer who is qualified and is aware the short sale process can take months to complete. See the estimated timeline:

  • Property listed on MLS
  • Property goes under contract 30-60 days later
  • Lender is sent the contract along with the short sale items lender requires
  • Typically it takes about 60 days to get a counter offer from the lender or an approval of the short sale.Closing is scheduled for 30-45 days from lenders approval.

As you can see the process can take at minimum 4 months to complete although we have had some close sooner than 4 months it is unlikely. Typically it takes 4-6 months from start to finish.

Please provide us details and we will contact you

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