Realty Times

Does the previous owner of a short sale have any rights to the home after closing? My husband heard they have up to a year to reclaim. We are moving to Brevard County, FL.

-Kathy

The simple answer is “no.” Short Sale is a final sale that must have the bank’s approval in order to sell, i.e. the seller owes more than the home will sell for and does not have the money to pay the difference.

Hence, the bank must approve in order to make up the difference by either waiving the money owed, or in some rare cases, filing a “deficiency judgement” against the sellers. The second rarely happens and usually happens when investors are trying to walk away from their bad investments (even though they may have made hundreds of thousands in profits on previous ones).

I have seen many investors try to “lawyer up,” to avoid paying what they are due. But none of this has anything to do with the buyer. The buyer closing is final, and title is passed at closing. And in Brevard County, Florida, the bank will end up having to pay/forego the shortfall, which will include the majority of the closing cost. In Brevard County, the normal is that the seller/bank has to pay for title insurance and (assuming your buyer’s contracts are written correctly), the seller/bank will have to pay off all liens as well, so that a clear title is passed. If a lien appears after the closing, then that is what title insurance is for.

Dave Congdon is a Broker Associate Islands International Realty in the Brevard County, FL area.

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