A lender counter offer in a Florida short sale is not a rejection -- it is a negotiation. Most sellers and even some agents treat a counter as bad news, when in fact it means the servicer reviewed your package, ran a BPO (broker price opinion), and concluded that a sale is achievable at different terms. Your response to the counter determines whether the short sale closes or falls apart.
Barrett Henry, Broker Associate at REMAX Collective with 23 plus years of Florida real estate experience and a short sale specialist who has negotiated with virtually every major servicer operating in Florida, walks through the most common counter offer scenarios and how to handle each one.
Why Lenders Counter on Florida Short Sales
Before responding to a counter, understand why it was issued. Lenders review short sale packages through their loss mitigation department, using a BPO -- an independent valuation of the property by a local real estate agent -- as the primary measure of market value. If the contract price is significantly below the BPO value, the servicer's investor guidelines will require a higher net proceeds figure before approving the sale.
The counter is the servicer telling you: we have a value that says this property is worth more. A response that ignores the BPO and simply reiterates the contract price will be rejected. A response that either brings the buyer up to meet the lender's minimum net, or challenges the BPO with specific comparable sales, has a realistic path to approval.
The Four Types of Florida Short Sale Counters
1. Price or Net Proceeds Counter
The most common counter. The lender states a minimum net proceeds figure -- what they must receive after commissions, closing costs, and seller-paid concessions. If your contract price produces less net to the lender than their minimum, they will counter to a higher price.
Your response options:
- Go back to the buyer and ask for a price increase, providing the buyer with the comparable sales that support the BPO value (or a value between the two positions).
- Submit a BPO reconsideration of value with comparable sales showing the market supports a price between your contract and the lender's counter. Target comparable sales from the 90-day period before the BPO date, within one mile, with similar square footage and condition adjustments.
- Negotiate closing cost adjustments -- if the lender is paying for significant buyer concessions or HOA arrears, those reduce net proceeds. Removing or reducing seller-paid items may allow the contract price to stand.
2. Closing Cost Counter
The lender approves the price but objects to the level of closing costs, commissions, or seller-paid concessions being deducted from gross proceeds. This is common when:
- Real estate commissions exceed the servicer's standard guideline (often 6 percent total)
- HOA arrears are large, reducing lender net proceeds below their minimum
- Buyer closing cost assistance (seller concessions) reduces proceeds below the threshold
Respond by reviewing each line item and negotiating selectively. Reducing buyer concessions is often easier than renegotiating the base price. Some HOA arrears may be negotiated directly with the HOA prior to closing.
3. Deficiency Counter
The lender approves the sale price but requires the seller to sign a promissory note for some or all of the deficiency -- the gap between the sale proceeds and the outstanding mortgage balance.
This is the most consequential counter and the most important to negotiate carefully. A promissory note leaves you with a debt obligation that survives the short sale. Before accepting, evaluate:
- The amount: A small promissory note (under $10,000) on a large deficiency may be acceptable. A note equal to the full deficiency is often not better than foreclosure.
- Bankruptcy alternative: Chapter 7 can discharge the deficiency entirely and provide a fresh start. If the promissory note amount is significant, consult a bankruptcy attorney before accepting.
- Insolvency exception: If your liabilities exceed your assets at the time of the short sale, the cancelled debt may not be taxable even without a promissory note. Consult a tax professional.
Counter back requesting a full deficiency waiver. Cite your documented hardship, the cost and delay of continued foreclosure proceedings (which reduces the lender's net recovery), and any insolvency. Many servicers will waive all or part of the deficiency to close a sale rather than continue a foreclosure case.
4. Timeline Counter
The lender approves the short sale terms but requires closing by a date that may be difficult to meet -- often 30 to 45 days from the approval letter date. This is most common when the lender has a foreclosure sale already scheduled and wants the short sale to close before that date.
Contact your title company and the buyer's lender immediately to assess whether the timeline is achievable. If the buyer is financing, lender turnaround time is often the constraining factor. Cash buyers can typically close in under 21 days. If the timeline is not achievable, request an extension from the servicer with a specific reason (buyer's lender timeline) and a realistic new closing date.
Escalating When a Negotiator Is Unresponsive
Short sale negotiations can stall at the negotiator level. If a negotiator is unresponsive, making decisions outside their guidelines, or issuing counters that appear inconsistent with market data, escalation is an option. Most servicers have a supervisor or senior negotiator level. Some have a formal appeals or escalation process for BPO disputes. If you are working with an attorney or a short sale specialist with established relationships at the servicer, use that relationship to escalate.
When to Walk Away From a Short Sale Counter
Not every short sale is worth completing. If the lender's counter requires a promissory note you cannot discharge, a price no buyer will pay, or a timeline that is not achievable, evaluate the alternatives:
- Chapter 13 bankruptcy: Stops the foreclosure automatically, cures arrears over 3 to 5 years, and may discharge a second mortgage or HELOC entirely through lien stripping. See our Chapter 13 guide.
- Deed in lieu of foreclosure: If you qualify, a deed in lieu typically includes a full deficiency waiver and avoids a foreclosure judgment on your credit. See our deed in lieu guide.
- Cash-for-keys: Some lenders offer relocation assistance in exchange for a cooperative move-out, which may be more favorable than the short sale counter.
Why Short Sale Counter Offer Outcomes Vary
Different servicers have very different short sale cultures. Some -- particularly those servicing FHA, VA, or USDA loans -- have standardized approval frameworks that leave limited room for negotiation on price but more flexibility on deficiency treatment. Others, servicing conventional loans or private loans, have more discretion at the negotiator and supervisor level.
Investor guidelines (the rules set by whoever owns the loan, such as Fannie Mae, Freddie Mac, or a private investor) also play a role: the servicer cannot approve terms that violate investor guidelines, and the negotiator may be citing a rule they genuinely cannot override. Knowing who owns your loan and what their published guidelines require can help you understand what is negotiable and what is not.
Related Resources for Florida Short Sale Sellers
- Florida Short Sale Guide -- complete overview of the short sale process, approval timeline, and steps
- Short Sale Deficiency Waiver Negotiation in Florida -- how to negotiate a full deficiency waiver as part of your short sale approval
- Short Sale Tax Consequences in Florida -- when cancelled debt is taxable and what exclusions apply
- Deed in Lieu vs. Short Sale: Florida Credit Impact -- which option is better for your credit score and recovery timeline
- Deficiency Judgments in Florida -- one-year statute of limitations and FMV offset rules
- Chapter 13 Bankruptcy to Stop Foreclosure -- alternative to short sale when lender terms are unacceptable
- Short Sale Specialists in Tampa, FL -- experienced short sale agents who negotiate with Florida servicers daily
- HUD-Approved Housing Counseling in Florida -- free counseling to evaluate whether short sale or another option is better
Dealing with a short sale counter offer in Florida? Contact Barrett Henry at REMAX Collective for a free consultation. With 23 plus years of experience negotiating Florida short sales, he can assess your counter and recommend the most effective response. Call (813) 761-0133.
