What is a short sale?

A short sale in residential real estate law is a sale of real estate that occurs when the seller’s mortgage loan is greater than the selling price of the property. This situation usually happens when the market value of the property has gone down due to factors such as a decrease in the local economy. In these cases, the seller must receive approval from the bank that holds the mortgage in order to move forward with the sale. This approval process is known as a short sale negotiation. The bank will agree to forgive some or all of the balance of the mortgage loan if the sale proceeds can be used to satisfy the loan. Short sales can also occur when the seller experiences a personal hardship such as job loss or medical bills. In this situation, the mortgage lender may agree to a short sale since they are more likely to get a portion of their mortgage loan back than if the home is foreclosed. In Florida, short sales are subject to a set of regulations that are established by the Department of Business and Professional Regulation. These regulations ensure that the buyer and the seller are adequately protected in the sale process. Short sales are a beneficial option for buyers, as they are usually able to purchase a property at a lower price. Similarly, sellers can use a short sale to lessen the financial burden they may be facing.

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What is a short sale?

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