Short Sale vs Foreclosure in Florida: What Jacksonville Homeowners Need to Know
Short answer: A short sale lets you sell for less than you owe with your lender's approval, while foreclosure is a court process that ends in a public auction. A completed short sale usually does less credit damage than foreclosure, but in Florida a lender may still pursue the unpaid balance after either one, so talk to a Florida real estate attorney before you choose.
If you are reading this, you are probably carrying a lot. Start with the facts, then the options. You have more of them than the stress suggests.
What is the difference between a short sale and a foreclosure?
|
|
Short sale |
Foreclosure |
|---|---|---|
|
Who controls the sale |
You list the home, lender approves the price |
Court-ordered public auction |
|
Process |
Negotiated with the lender |
Judicial (Florida requires court action) |
|
Typical timeline |
Varies by lender response |
About 6 to 14 months from first missed payment to sale |
|
Credit impact |
Typically less severe |
Typically more severe |
|
Deficiency risk |
Possible |
Possible |
Can the lender come after me for the difference?
Possibly. For an owner-occupied home, Florida Statute 702.06 caps a deficiency at the debt (or judgment amount) minus the home's fair market value on the sale date. After a foreclosure, the lender generally has one year to pursue it. Two Florida appellate courts have held that a short sale does not start that one-year clock, so a lender may have up to five years. Ask your attorney whether to negotiate a deficiency waiver in writing.
Is forgiven debt taxable?
It can be. When a lender forgives part of a debt through a short sale or deed in lieu, the IRS may treat the forgiven amount as income. Ask a tax professional about exclusions that may apply.
What should I do first if I am behind on payments?
- Contact your servicer and ask about loss-mitigation options.
- Speak with a Florida real estate or foreclosure attorney.
- Talk with a Realtor experienced in short sales about your home's value and likely approval price.
- Gather hardship documentation (income, expenses, hardship letter) before you list.
FAQ
Does a short sale stop a foreclosure? A pending short sale can run alongside foreclosure, but the court process continues unless the lender postpones it. Confirm timing with your attorney.
Can I stay in my house during a short sale? Yes, typically until closing, but showings will be needed.
Do I need a Realtor who handles short sales? Lender approval makes this a specialty. Ask for transaction experience.
This is general information, not legal or tax advice. Consider linking to a Florida real estate attorney you trust and adding your short sale experience as a first-person proof point
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