Yes! Now understand, a short sale can be accomplished without one. A REALTOR can negotiate with a seller’s lien holders to get an approval for the sale without an attorney, and a seller can choose not to seek legal advice, but this is really playing with fire. Nevada is a deficiency State. Unlike California and other States, lenders here, who suffer losses due to foreclosure and short sales, have the ability to try and recoup some of those losses by obtaining a deficiency judgment via the courts. Essentially, your former lender sues you, and if they win, you still owe them money. The lender can then try and collect the money, try and settle the debt with you directly, or worse, sell off the judgment to a third party debt collector; can you say hello to spending the next few years dodging debt collectors? The whole point of a short sale is to come to a resolution, not endure sequels to this horror.
Let’s get one thing straight, this is NOT a legal advice column. I am a licensed REALTOR, not an attorney. The purpose is to alert you to the risks, and why you need to do everything you have to in order to protect yourself. A successful short sale has two goals. The first is what most people focus on, getting rid of the house and the payment. The second goal, and almost as important, to free oneself from the entire debt, including the portion known as the loss.
At its essence, a short sale is a contract negotiation. Attorneys are far better equipped than REALTORS in this area. If a bank makes a mistake with a REALTOR, so what; make a mistake with an attorney and they open themselves up to potentially serious legal ramifications and counter-attacks. Attorneys can also perform the short sale negotiations on your behalf. Rather than having an out-gunned real estate agent negotiating with multi-billion dollar financial institutions, why not have an attorney do it, especially if it costs you a fee that is less than the price of one mortgage payment?
REALTORS also need protection and advice. We are being forced into areas of real estate fraught with unwanted liabilities, yet distressed sellers need the representation and we need the work, so some of us professionals have taken on the challenge. My real estate team Sena and Associates recognized the need to bring in experienced real estate attorneys to help guide us as REALTORS as well as representing the sellers against their banks with these short sales.
We have an axiom we follow in the real estate industry: It takes a team to successfully represent a client. You need the right agent, the right lender, the right title/escrow company etc. Now, if you are doing a short sale in my opinion, you also need the right legal and tax advice, so be prepared to fork over a little bit to do the deal right. You won’t have to spend a fortune; in fact, most of the attorneys we work with understand your desperate financial situation and look to make the majority of their legal fees directly from the lender as simply another closing cost which is deducted off the sale price. They may charge you some fee up front to cover their retainer fee, but the results will often far outweigh the initial investment.
If you have questions about doing a short sale here in the Las Vegas and Henderson area, please call us for a consultation at 702-376-0088.
Paul Rowe is the primary listing agent for SENA AND ASSOCIATES, North American Realty of Nevada and specializes in short sales
{ 4 comments… read them below or add one }
Good points. I agree wholeheartedly – it is certainly a good idea to obtain legal representation during a short sale.
Great job on this post, Paul!
I agree completely. I think a lot of real estate agents think they’re experts in this arena, but most are not. The difference between a real estate agent and an attorney in this instance is significant. Your short sale attorney should be using a loan audit as leverage in the short sale process. I work with attorneys who do this for my clients and the results have been outstanding, which many short sales completed within 45 days.
I agree an attorney is needed. I would not even position myself to be the one going under for a short sale. Legal representation is strongly needed in my opinion. Personally I would not even attempt. I would rather accept a referral.
An attorney is always nice when you get in legal situation like that. Short sales can be such a pain in the rear! I am with you Robert, I will just take the referral.