Pros and Cons of A Short Sale in Florida

Are you facing the risk of foreclosure? Paying a mortgage that is more than your property is currently worth? You might want to consider a short sale. A short sale allows you to negotiate with your lender to settle the mortgage debt for less than you owe and avoid the financial consequences of a foreclosure.

The legal professionals at Atlantic Coast Title & Escrow are here to help explain the advantages and disadvantages of a short sale to help you make a well-informed decision.

What Is A Short Sale?

A short sale is a real estate transaction in which the earnings from the sale of a property are less than the actual amount owed on the mortgage loan, and is used as a loss mitigation strategy. It is typically performed when a homeowner faces financial challenges and wants to sell the property quickly to avoid foreclosure. In this case, the homeowner agrees to take a discounted payoff from the buyer to avoid the costs and financial consequences of foreclosure.

What Are The Pros Of A Short Sale?

  • Stop foreclosure: Foreclosure will have a negative effect on your credit score which can affect your ability to purchase a home in the future. A successful short sale will allow you to avoid foreclosure and save your credit. 
  • Reduce your debt: With a short sale, you can sell your property and settle a portion of your mortgage balance with the earnings.
  • Get a fresh start: Once you finalize a short sale, you’ll be able to focus on your other financial goals. 

What Are The Cons Of A Short Sale?

  • Credit score impact: Depending on your type of loan, your mortgage lender may report the short sale as a negative trade line on your credit report, which can lead to a significant drop in your credit score.
  • Tax implications: A short sale may require you to pay taxes on the amount of the forgiven debt.

How Jacksonville Real Estate Attorneys Can Help

At Atlantic Coast Title & Escrow, we are experienced in real estate matters and can provide quality title, escrow, and real estate closing services to homeowners in Florida.

If you are facing the risk of foreclosure in Florida, we can help evaluate your situation to determine if a short sale is the right solution for you. Contact us online or call (904) 853-5591 to learn more.

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