St Petersburg- Clearwater - Tampa Bay FL Real Estate
Tyson Rollins

Short Sale My Home


If you are falling behind on payments,  have legal action pending, facing foreclosure or think you want to Short Sale your home in the St Petersburg, Clearwater or Tampa Bay areas, contact me immediately to discuss your options.  Contrary to the term Short Sale, there is nothing short about the process.  As a matter of fact, in some cases it could typically takes several months to sometimes over a year to complete a  Short Sale.  Proper marketing and price positioning are always key factors and extremely important in selling a Short Sale. Below are some helpful points to help you get started and along the way.  Call me when your ready to get your home sold.
What is a Short Sale?
By definition: a short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens’ full amounts, whereby the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt.  Any unpaid balance owed to the creditors is known as a deficiency. Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans, unless specifically agreed to between the parties.  A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower; however both will often result in a negative credit report against the property owner.
WHAT YOU NEED TO KNOW A Short Sale is a real estate transaction that allows a homeowner to sell the property for less than what they owe on the mortgage.  This type of transaction is different from traditional resale’s in a variety ways, including:
The home owner must have a valid financial hardship.

  •  Job loss, loss of income (borrower’s total monthly payment exceeds 31% of gross income) , disability, death of a spouse, divorce, medical condition, relocation for employment of more than 100 miles.
  • The financial hardship must be substantially documented and is required to be updated monthly through the entire process. (previous 60 days bank statements, 30 days of pays stubs, Self –Employed requires Profit and Loss Statement (6 months required) unemployment verification, past 2 years of tax returns, past 2 years of  tax W-2s, divorce decree etc.) **May vary by lender**
  • The Short Sale needs the approval from all parties involved including the homeowner, the new buyer, mortgage insurers, investors and lien holders.  Due to all interested parties needing to be in agreement, Short Sales take considerably longer to complete than a traditional sale.
  • Offers should be with in Fair Market Value and are purchased As-Is (typically no repairs permitted) condition to seriously be considered for approval. The less contingencies may expedite the process
  • The homeowner(s), Listing Agent, Buyer’s Agent and new buyer(s) will agree that the property is being sold through an Arm’s Length Transaction Affidavit which states  the parties are unrelated by family, marriage or commercial enterprise.
  • There are to be no agreements or understandings between the seller and buyer that will allow the seller to remain in the property as a tenant or later obtain title or ownership of the property
  • Neither the seller or buyer will receive any funds or commissions from the sale of the property (unless approved by the lender)
  • There are no agreements or offers relating to the sale or subsequent sale of the property that have NOT been disclosed to the Servicer/Lender
  • After sale deed transfer restrictions may apply (title can not be transferred within 90 days of Short Sale Completion etc.)
  • The amount of debt forgiven might be treated as income for tax purposes. Under a law expiring on January 1st, 2014, however, forgiven debt will not be taxed if the amount does not exceed the debt that was used for acquisition, construction, or rehabilitation of a principal residence. Check with a professional  Tax Advisor so you fully understand your responsibility.
  • When you are served a notice of foreclosure in Florida, in most cases you only have 20 days to file a response, or your options in fighting foreclosure may become limited.  Be proactive about the process as soon as your are notified.
  • Homeowners considering a Short Sale should consult with a Real Estate Attorney and a Tax Professional due to the legal and tax liabilities of the transaction.
  • Homeowners who stop making their mortgage payment may lose their  home to foreclosure and damage their credit in the process.

Questions to ask a Short Sale Listing Agent as a Buyer   

  • Is there a Lis Pendis (legal suit pending) on the property and has the lender filed foreclosure preceding’s
  • Are you going to be negotiating the Short Sale for the seller(s) or is there an attorney or short sale facilitation company involved?
  • Is there a buyer mitigation fee and how much?
  • How many and who are the lender(s) servicing the loan(s)?
  • Have you requested the short sale package(s) from each lender and has the seller completed it for submission?
  • How is the listing agent going to handle submitting offers to the bank?
  • Is the list price representative of a previously Short Sale approved price?

Tips for Purchasing a Short Sale

  • Look for terms such as “short sale”, “third party approval required”, “pre-foreclosure” or “notice of default”
  • Your real estate agent can help you determine a reasonable offer amount by reviewing comparable properties that have recently sold in the area.
  • Submit a reasonable, fair market value offer. Offers that reflect the fair market value of the property and are within the investor’s marketing guidelines have a better chance of getting approved.
  • Be prepared to wait a minimum of 45-90 days or even longer before you get a response from the seller’s lender or mortgage servicer(s).  Patience is key in getting the best market values
  • Property conditions can vary widely, and properties are typically sold “as is.” In most cases, neither the seller nor the lender will make any repairs  as there tends to be deferred maintenance.  Have a professional home inspection of the roof, HVAC, plumbing, electrical and windows etc. to avoid expensive rehabilitation projects.
  • You will not be reimbursed for out-of-pocket expenses such as a property inspections, utility connection fees,loan application fees including property appraisal, and other expenses

Tax Information for Short Sale Sellers

Ten Facts for Mortgage Debt Forgiveness 

IRS Tax Tip 2011-44 If you are a homeowner whose mortgage debt is partly or entirely forgiven during tax years 2007 through 2014, you may be able to claim special tax relief and exclude the debt forgiven from your income. Here are 10 facts the IRS wants you to know about Mortgage Debt Forgiveness.     1.  Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.     2.  The limit is $1 million for a married person filing a separate return.
3.  You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.     4.  To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.     5.  Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.      6.  Proceeds of refinanced debt used for other purposes – for example, to pay off credit card debt – do not qualify for the exclusion.
7.   If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
8.  Debt forgiven on second homes, rental property, business property, credit cards or car loans do not qualify for the tax relief provision. In some cases, however, other tax relief provisions – such as insolvency – may be applicable. IRS Form 982 provides more details about these provisions.     9.  If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancelation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
10.  Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.
For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit A good resource is IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments. You can also use the Interactive Tax Assistant available on the IRS website to determine if the cancelation of debt is taxable. The ITA tool is a tax law resource that takes you through a series of questions and provides you with responses to tax law questions Taxpayers may obtain copies of IRS publications and forms either by downloading them from or by calling 800-TAX-FORM (800-829-3676).Links: Form 982  Form 1099-C  Publication 4681

Helpful Links

Making Home  Fannie Mae Loan Look Up
Freddie Mac Loan Look Up 
Call today and lets get started  727-644-9387