A short sale is when the home is sold for less than the mortgage amount owed to the lender. Short sales can be categorized in two ways; sales with deficiency balances and sales without. Deficiency is the dollar value difference between the mortgage (or judgment amount) and the short sale price. So, for example, if you had a $200,000 short sale on a $300,000 mortgage, the deficiency amount (collectible for 20 years or more with interest) would be $100,000. A properly conducted short sale leaves no deficiency and an improperly conducted short sale leaves deficiency. For a few years, lenders were not attempting to collect deficiency balances. Today, however, deficiency balances are regularly sold to debt collectors who are aggressively pursuing these amounts. Realtors frequently negotiate short sales. Unfortunately, the relator’s only tool to avoid deficiency and their only goal is to sell the home. Sometimes realtor’s short sales occur with deficiency, we get calls from sellers in this position frequently.

Lawyers have many tools to avoid a deficiency, and most importantly, their only goal is to eliminate the deficiency. The process is a lengthy one for negotiating with banks to accept the short sale price. It typically takes 40 to 50 hours to negotiate and close a short sale. Having the right advocate is important and at James Brown Law we are the experienced choice in Florida Real Estate law. In the case of a short sale, finality is the benefit for the homeowner. Once the sale is complete and the bank accepts the terms, it’s over. We also represent borrowers in the negation of post-judgment and short sale deficiency liability against institutional lenders and third-party debt collectors.