Short Sale and Bank-Owned Closings in Florida

No. In a short sale, the owner is still the seller. The price will not pay the mortgages in full, so the lenders that are releasing have to agree in writing to take less and release their liens. In a bank-owned sale, that foreclosure work is already finished. The seller is the bank, or whoever the clerk's certificate of title named. The former owner does not sign the new deed.

Both still need a title search. A standard financed purchase often takes 30 to 45 days after a normal contract. These files often take longer, because a short-sale approval or a bank addendum sits in front of that calendar. Read how long a Florida closing takes. We do not publish a day count for how long a bank takes to approve. The letter in the file is the deadline.

Each mortgage that is still on the title, unless that lender's written approval releases it for less than the balance. The first lender's letter does not speak for the second. A short sale is not a foreclosure, so it does not wipe out a junior lien. A judgment is the same kind of problem until that creditor releases it. Send every approval letter with the contract. Read what a Florida title search finds.

If the seller still lives in the house and is married, the spouse generally joins the deed even when the lender approved the sale. Read why both spouses sign. Section 201.02(11) leaves forgiven or released mortgage debt out of taxable consideration on a qualifying short sale: the mortgages exceed what the buyer pays, the lender releases its mortgage for less than it is owed, the lender takes no interest in the property, and the lender is not related to the seller or the buyer. We quote the stamp tax on the file. We do not decide it in this article. Read documentary stamp tax. Whether the seller still owes the unpaid balance, or owes income tax on forgiven debt, is the approval letter and the seller's tax return. We do not calculate either one.

When it is already in the chain of title. If the judgment used the clerk's sale in section 45.031, the clerk files a certificate of sale, and if no objection is filed within 10 days, the clerk files a certificate of title. Section 45.031(6) says title passes when that certificate is filed, and the clerk records it. We search for that instrument. We do not hold the auction, and we do not file the objection. If the certificate is not of record, the bank is not the seller yet on that procedure.

Banks often sign a special warranty deed. That promise covers defects the bank created while it owned the property, not the whole history. Read warranty deed versus quitclaim deed. The owner's title policy is what defends the buyer after closing. The bank's addendum can change the inspection period, the deposit, and the deed. Send it with the contract. Read what realtors send on day one. We follow that writing. We do not rewrite it, and we do not release earnest money because one side emailed. An HOA or condo estoppel is still ordered when there is an association. We collect the amount on the certificate. We do not invent a foreclosure discount.