A short sale is an arrangement where the proceeds obtained from selling the house are lesser than the amount owed to the mortgage lender. Short sales usually take place when a homeowner is delinquent on their mortgage payments and wants to avoid foreclosure against them. Sale proceeds, which are usually lower than the amount owed, go to the mortgage company and in return, the lender lifts their notice of deficiency, releasing homebuyer from any obligation.
If you find yourself in a difficult financial situation and are looking to initiate a short sale, it can be extremely advantageous for you to procure the services of a seasoned short sale lawyer. Here are 3 key reasons that you should opt for legal counsel rather than merely hiring services of a broker or going DIY.
Access to Legal Advice
Short sales can involve legal aspects and real estate issues, along with different legal documents that need careful consideration from a lawyer. Moreover, you may require legal advice on various questions that arise. Therefore, it can be extremely beneficial to acquire services of an experienced real estate lawyer to guide you throughout the process. Remember, brokers or any individual who does not have a practice license cannot provide a legal advice on any matter related to the short sale transaction.
In order to initiate a short sale, you will have to ask your lending institution to release their mortgage lien from the house for proceeds in the sale. Most lenders are looking to obtain full payment without incurring any losses. Hence, using their persuasive skills, a competent real estate lawyer can negotiate on your behalf and get a favorable deal by demonstrating that short sale can expedite the recovery process and can benefit both the parties involved in the transaction.
Waiver of Liability for Deficiency
In many instances, the financial institution asks for a promissory note which states that you will pay the part of the unpaid losses, especially if you have a decent revenue stream or other assets to your name. Having a real estate attorney on your side can provide you an upper hand while negotiating a waiver of the deficiency or at least settle for a lower payment as a lending institution will be aware that you will have a foreclosure defense at your disposal if they do not opt for a short sale.
If you wish to know more about this subject or speak with an experienced real estate attorney, contact the offices of Covert & Covert LLP at (630) 717-2783 and schedule a free consultation session.