Florida Panhandle Real Estate Law Firm Focuses on Short Sales
Wondering About a Short Sale? Panama City Beach Real Estate Lawyer Can Help
A short sale is a sale of real estate in which the proceeds will fall short of the balance of debt secured by liens against the property, and the property owner is unable to repay the full amounts on the liens, and the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.
With a short sale, the owner is typically 120 to 180 days behind in their payments. Sellers can’t profit from short sales, and the seller doesn’t have to pay tax on the forgiven amount. Short sales must be arm’s length transactions, meaning the property can’t be sold to a family member.
Pros and Cons of a Short Sale
In Florida, a short sale is generally considered a better solution than a foreclosure. But while some states ban lenders from collecting the remainder owed on a loan after a foreclosure or short sale is completed, Florida law allows banks to pursue borrowers to collect the balance for up to 20 years, leading to a garnishment of wages long after a home is gone.
Another consideration that should be made is the effect of a short sale on credit. According to the Fair Isaac Corporation, which developed the widely used measurement of credit risk called the FICO score, the negative effect of a foreclosure is only slightly world than a short sale. But in Florida, a deficiency judgment from a foreclosure is likely to have a much greater impact on a homebuyer, prohibiting their ability to purchase another home for many years.
Contact an Experienced Florida Real Estate Attorney Today
If you have questions about short sales, Florida Attorney Nishad Khan P.L. has assisted clients with numerous Florida real estate matters, including short sales, for more than 12 years. Contact our firm online or call (850) 500-3030 to set up your free initial consultation today.