What Is a Short Sale in Florida?

1. You show a hardship — job loss, divorce, illness, a payment increase — and submit financial documents to your lender.
2. You get a buyer’s offer that is less than the payoff.
3. The lender reviews the offer, usually ordering its own valuation, and may counter.
4. Other lien holders — a second mortgage, HOA — may also have to agree.
5. The lender sends an approval letter stating the terms, and the sale closes.

Lender response times vary, so it helps to have a complete package and a buyer who understands the process. We handle short sales and can walk you through what a lender will need — see our short-sale page.

Florida handles foreclosure through the courts. A foreclosure case ends with a judgment and a sale of the house, and the lender may be able to pursue you for a deficiency in some cases (Fla. Stat. § 702.06). A short sale lets you control the sale and, if the lender agrees, can end the matter without a judgment. Both can affect your credit; ask a housing counselor or attorney how they apply to your loan.

If the lender accepts less than you owe, the difference is the deficiency. Get in writing whether the lender waives it. Also, canceled mortgage debt can sometimes count as taxable income, with exclusions that may apply — see IRS Publication 4681 and talk to a tax professional.

• You owe more than the house is worth.
• You can’t keep up the payments and don’t expect that to change.
• You want to avoid a foreclosure judgment, if possible.

If you have equity, you probably don’t need a short sale — a regular sale pays the lender in full. If you’re behind but have equity, see selling when you’re behind on the mortgage.