Q&A: Is my home a short sale or a regular sale?

In a short sale, your lender is accepting less money than it is owed to release your property from its mortgage.

QUESTION: Due to a hardship, we stopped making our mortgage payments. Because values have increased recently, we think the house is worth more than we owe. How do we know if we need to do a short sale? And can we use a family member as our real estate agent?


ANSWER: In a short sale, you need to get your bank's permission to sell the house for less than what you owe on the mortgage. You will need to send in financial information and jump through other hoops to get your lender to agree to this discount.

Your first step should be to ask your lender for a complete payoff statement so you know exactly what you owe. Then you need to get with a real estate agent to see what the home is realistically worth. A fresh coat of paint, proper decorating and good staging can add significant value, maybe making the difference here.

Mixing family and business typically isn't a good idea, but there's nothing stopping you from doing it if you don't need your lender's permission to sell.

Because you are not sure if this will be a short sale, you should play it safe and find an experienced agent, unrelated to you, who can help you stage and market your home for the maximum price. If this does turn out to be a short sale, you, the buyer, the real estate agents and the title company will all have to sign an affidavit stating that this is not an insider deal and that no one is related to you. Lying about this is considered mortgage fraud.



Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter @GarySingerLaw.

The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.


(c)2014 Sun Sentinel (Fort Lauderdale, Fla.)

Visit the Sun Sentinel (Fort Lauderdale, Fla.) at www.sun-sentinel.com

Distributed by MCT Information Services

Real Estate Tools
Looking for a new home? Search Philadelphia real estate »
Browse Recent Home Sales »
Compare Philadelphia mortgage rates »