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Short Sale

Gainesville, FL Short Sales

A short sale is one of the ways in which you may sell your home. Because your home is often the largest investment that you have, you’ll want to consider all the factors associated with short sales. But first, know that a short sale does not mean that you are going to sell your home more quickly. In fact, a short sale is often a lengthy process and sometimes it’s anything but short.

So, what is a short sale?

According to Freddie Mac, “A short sale occurs when a property is sold at a price lower than the amount the homeowner owes on the mortgage, and the homeowner’s mortgage lender(s) agrees to the “short” payoff. A lender might accept a short sale with the property worth less than the balance of the mortgage if the borrower cannot continue to make the monthly loan payment, does not have enough money to pay back the full balance of the loan and needs to move out of the property”

Is a Gainesville, FL Short Sale Right for Me?

Now you may be asking yourself, “Is a short sale right for me?” and that is a difficult answer for me to provide. Because every situation is different and unique, it isn’t always easy to determine if a short sale is the best way to sell your Gainesville, FL home. In general terms, a short sale is better than going for a foreclosure on the home. However, a short sale also comes with the possibility of negative tax consequences. Therefore, it’s always a good idea to talk with your CPA about this and factor that into your decision.

Gainesville, FL Short Sales

Gainesville, FL short sales are common, and this is one option that is available to you as well. Again, you need to weigh all the pros and cons of a short sale before taking this route. In fact, I highly recommend you review the other ways in which you can sell your home before committing to a short sale.

Other Options to Gainesville, FL Short Sales

What are some of those other options for short sales? You could:

  • Use forbearance – the lender spreads costs such as fees, back payments, and penalties over a fixed number of payments, allowing you the chance to catch up on payments.
  • Sell and bring cash to closing – If you’re in the financial position to do so, you could pay off the debt rather than do a short sale. This will give you the option of purchasing another home, too.
  • Consider loan modification – Another option is a permanent change in one or more of the terms of the loan. In this option, you’ll have help to get reinstated and bring your payments to an amount you can afford so you don’t fall behind again.
  • Consider Deed in Lieu of Foreclosure – In some cases, if the borrower is in distress, the lender may allow you to surrender the deed in exchange for a release of the note and the mortgage.
  • Allow foreclosure – This is not usually the best option for most people, but foreclosure is a legal process in which the lender takes control of the property when you are unable to make the full principal and interest payments on the mortgage. It basically means you defaulted on your mortgage agreement, so the lender/bank takes ownership of your home.

The Steps of a Short Sale

Understanding Gainesville or Alachua County short sales starts with understanding the steps. In general, they are as follows:

  1. Contact a qualified Gainesville, FL realtor to help with the short sale
  2. Determine the amount that is owed on the home (all debts need to be factored in at this stage)
  3. Determine the Fair Market Value of the property
  4. Investigate if the property is eligible for a short sale (this will include determining financial hardship eligibility – death, divorce, illness and medical costs, long-distance job relocation, loss of hours, natural disasters, business failure, etc.)
  5. Get tax advice (including how a short sale will impact your taxes owed)
  6. Review the impact on your credit score

It’s also very important that you know that after a short sale, there is usually a waiting period before you can qualify for a loan on another property.

Short Sale Sellers Beware

So, there are always some things you should look out for. When it comes to a short sale, beware of these potential scams or frauds:

  • Promises to stop foreclosure
  • Large upfront fees
  • Sounds “too good to be true”
  • Proposed buyer is an LLC
  • Gives instructions not to contact the lender

These are just some red flags to look out for. Again, if you’re working with a professional you trust to help you with the short sale, then scams and frauds can easily be avoided.

Remember, a short sale is not always short – there is a process to it. But in some cases of hardship, it can be a better solution than foreclosure of the home.

Gainesville, FL Short Sale Trends

While traditional home sales in Gainesville, FL are decreasing slightly, the same isn’t exactly true for short sales in Gainesville, FL. As of Q3 2019, traditional closures home sales had decreased by 6.2% over the prior year. However, the amount of short sale closures decreased by 66.7% over the same time period. It is becoming fairly uncommon to see many short sales on the market, despite the popularity of choosing this method to counteract an upside-down mortgage only a decade earlier.

Foreclosures are also decreasing in Gainesville, FL. The amount of closed foreclosures sales also decreased by 55.6% in Q3 2019 compared to the prior year.

While the short sale process isn’t easy, short, or as popular as it used to be, it still remains a valid option for homeowners who need to sell their homes.

If you’d like to start the short sale process or learn more about Gainesville, FL short sales, contact me today!