A short sale is a home sale where the proceeds are less than the amount the homeowner has left to pay on the mortgage. Short sales are usually initiated if the homeowner is under pressure to complete a home sale as quickly as possible. No one really wants to sell their home and not receive a profit on the sale. Short sales are a method for homeowners to avoid a foreclosure against them.
Short sales are often utilized as a foreclosure alternative. Some lenders might be willing to accept the short sale proceeds and to cancel or forgive the remaining payments on the mortgage. This may also help the borrower to avoid some of the extra costs associated with foreclosure.
A short sale occurs where you are delinquent on your mortgage payments. Moreover, the mortgage lender is allowing you to sell your property for less than what it is worth, with the understanding that all of the proceeds will go to the mortgage lender. After the sale, the mortgage company will lift its notice of deficiency against you.
A homeowner is often provided with a choice between undergoing foreclosure and conducting a short sale of the house. In order to understand which one would be more beneficial, it helps to review the different characteristics of each. Some characteristics of short sales include:
Some characteristics of foreclosures include:
A lawyer is useful where you believe a deficiency judgment will be entered against you, where you need help understanding a short sale agreement, and where you believe a foreclosure will happen anyways. In extreme cases, short sale fraud.
In some cases, a deficiency judgment may be entered against you even after a short sale. The deficiency judgment is normally for the difference between what you owe the mortgage company and the short sale proceeds.
In those situations, a lawyer can help you get rid of the deficiency judgment or negotiate a lower amount. If you believe a foreclosure will happen regardless, a lawyer can help prevent it or defend you.
The main difference between lawyers and real estate agents in short sale transactions is that a lawyer does not just negotiate and help you with the short sale transaction, but also provide you with legal advice about the short sale transaction.
The lawyer can also represent you in a foreclosure action or help you file bankruptcy, if the short sale does not go through and you face foreclosure. Real estate agents can’t give legal advice or provide you with legal representation and sometimes do not now how to negotiate a short sale deal with the lender.
Here are some reasons on why you should hire a lawyer for a short sale:
Even if you want to use a real estate agent, it is wise to set up a free to low cost consultant with a local real estate lawyer. Short sales can involve many different legal issues and real estate matters. You may wish to hire a lawyer if you need help conducting a short sale. Your attorney can help inform you of your options and can also address and legal matters that might arise.
Last Modified: 01-16-2018 03:35 PM PSTLaw Library Disclaimer
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