We've recently given you a lot of information when it comes to short selling your home in Central Florida. You've learned about what a short sale is, why you might need to do it and and how to go about the process, too. In this final part of our short sale series we look at the last piece of the puzzle—when the right time to do a short sale might be. With the understanding you've gained through this series, we hope you are equipped with the right information to make a decision when it comes to selling (or short selling) your home.
When do I do a short sale?
The timing of a short sale is largely a matter of discretion for you—the seller. For many who have suffered and are continuing to endure financial distress, it may be in your best interest to try to remain in the property as long as possible before selling. In other cases, there may be a need for quick action and the desire to close this chapter and move on.
The foreclosure crisis has evolved in different ways since it began around 2007 and will continue to change in response to political and economic circumstances. What we are seeing now is most lenders taking at least six months, quite often longer, to file a foreclosure case and take the borrower to court following the first missed payment. Once filed, the lender may complete the foreclosure case as quickly as within six months. This is happening in Florida, if (and this is a big “if”) the borrower doesn’t respond quickly and mount their defense. On the other hand, we have litigated some cases for as long as 3-4 years in court and some of these remain open from the start of the foreclosure crisis. Foreclosure cases can be anything but “open and shut” and there are many legitimate defenses borrowers can raise in their case.
Many borrowers who stop the mortgage payments and thus find themselves in “pre-foreclosure” (behind in payments, but not yet sued) begin trying to short-sell only after being served court papers. Some don’t want to face litigation at all and try to sell before being served. Unfortunately, many of these rushed borrowers move so quickly out of ignorance of the legal process and its timing, their rights and what can be done to fight a foreclosure are overlooked.
Others choose to handle the matter more aggressively and only attempt to sell once the case reaches a more advanced stage in litigation. There are many ways to plan and time a short sale and it can be done either before a foreclosure case is filed against the borrower or while the case is pending. A short sale is likely to take six months or longer to close from the time it is listed until the actual closing. Accordingly, the borrower who wants to short sell should make sure to plan to close prior to the court auction that concludes the legal process, at which point the lender or a third party bidder will take title and the chance to sell will be forever lost.
We hope this series answers most of your questions about short sales. A short sale is not the best solution for everyone, but we're convinced it’s the best for most who find themselves in trouble with their mortgage. For more information and to discuss your options, please feel free to reach out to us.
About the author, Charles P. Castellon, Attorney and Counselor at Law: Charles is active in community, civic, and professional associations and has lectured and served as a panelist on real estate and other legal issues for organizations and associations throughout Florida including the Osceola County Association of Realtors, Orlando Regional Realtors Association, Central Florida Realty Investors, Polk County Real Estate Investors Association, National Association of Hispanic Real Estate Professionals, Osceola County Landlords Association, Score Real Estate School, and various other organizations throughout the state. To contact Charles e-mail him at charles@cpclaw.net or find out more information at www.cpclaw.net.
