Handling short sales is a matter of selling a property about to be foreclosed, where the owner is in financial distress and needs to close the deal to stave off the impending foreclosure. The key to it is getting the lender or lenders to agree, because they may prefer to foreclose rather than agree to allow a sale for less than the first mortgage balance plus secondary mortgages and liens. Finding a buyer, putting all the documentation together and then negotiating with the lenders requires a team effort between the owner, the owner's attorney and the real estate agent.
Do you or does someone you know need legal information regarding short sales? Our real estate lawyers are here to help. Contact a real estate attorney in your area today for more information.
Listed below are all the legal aspects that need to be kept in mind by all parties associated with a short sale:
Even if all the lenders are open to the idea of accepting a smaller payment, a short sale still requires a heavy amount of documentation with precise figures about the expected sale price, closing costs, commissions, all expenses balanced against the mortgage amounts, late fees, outstanding payments, and so on. Apart from this, the foreclosure process continues on regardless, so there is only a small window within which the short sale has to be accomplished.
Agents who take a short sale listing need to know their fiduciary duties towards the home owner, and what will happen if they do not deliver and the owner loses the home to foreclosure. If there is an audit or investigation by the owner's lawyer afterwards, shoddy or negligent work by the agent may carry a heavy liability.
Do you have additional questions regarding short sales? Our real estate attorneys are here to assist you throughout the process and answer any questions you may have. Contact a real estate lawyer near you today.
Did you know?
Lenders may agree not to report the debt reduction from short sales to credit reporting agencies.
One part of the negotiations with the lenders is to get them to agree not to report the deal to the credit agencies. If they do, it will affect the homeowner's credit ratings just as much as a foreclosure.