Last Update: 02/24/16
With pressure building to get short sales done before the end of the year (when the tax exemption for deficiencies expires), it’s becoming more and more important to help buyers find Florida short sale properties as well as helping sellers promote their short sale deals. Even more important: to get that deal done and the closing finalized before December 31, 2012.
The Bank of America short sale seminar for Florida realtors is one example of how things are being done to facilitate an efficient short sales process here in Florida. Recently, a Florida realtor contributed to this effort by helping get the Multiple Listing Service (MLS) to change how it does things, and now MLS provides information regarding Florida short sales and Florida bank-owned properties. This Jacksonville Realtor, Kevin Dickenson, has gone a step further and provides an online web site that gives readers lists of Florida short sale properties by Florida location (city).
Having various players in the Florida real estate market working toward a fast, smooth, and effective short sale market here in Florida is great for home owners and borrowers who are trying to avoid foreclosure by engaging in a short sale, or who are current on their mortgages but wanting to unburden themselves of an underwater mortgage through a short sale. Better late than never, from the perspective of many Florida foreclosure defense attorneys.
However, there are still concerns with the short sale process and these efforts do not erase the warnings that each Florida home owner or borrower considering a short sale should consider. Educating realtors and advertising which homes are short sales (and therefore, bargains for buyers) are good ideas and should help the marketplace. However, they do not change the law and the legal concerns that exist with Florida short sales today.
Larry Tolchinsky’s Tip:
Every Florida home owner that may be facing a deficiency either through foreclosure or short sale needs to know that on December 31, 2012, the federal income tax exemption for deficiencies being exempt from being taxed goes away. In 2013 and thereafter, unless Congress acts quickly, the borrower will be taxed for the deficiency — for details read our post that discusses what this loss of tax exemption may mean for you.
Which means that the pressure to short sell your home and to close that transaction within the next two and a half months is very real.
However, in this flurry of activity to get short sales done there needs to be an increased awareness that other laws must be respected and remembered, or the borrower who is selling his home short here in Florida may have bit off her nose to spite her face (meaning more trouble in the future). Consider these issues that a Speedy Short Sale System does not change one iota, and these are just a few concerns from a Florida real estate lawyer’s perspective:
1. the need to make sure there are no clouds on the title (liens, probate problems, etc.);
2. the need to insure that the closing documents do indeed transfer title to the property (the “doomed deed” scenario);
3. the need to make sure that the property has been legitimately appraised for purposes of minimizing the deficiency for the seller and establishing value for the buyer (for example, the “reverse staging” problem);
4. the need to insure that there are no fraudulent fees or charges as part of the short sale; and
5. vetting the buyer to make sure they are legitimate, since short sales fury may get suspicious players to the table who may not be able to close the deal legitimately.
A good piece of advice when you and your family are purchasing or selling your family home in one of the biggest transactions of your life is to at least talk with a Florida real estate lawyer. Getting someone to review all of the paperwork including the all important promissory note, isn’t as costly as most of us think it is. And it’s always a lot cheaper than paying to fix a problem after a closing occurs. Most real estate lawyers, like Larry Tolchinsky, offer a free initial consultation (over the phone or in person, whichever you prefer) to answer your questions.
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