What Professionals Should Assist In The Short Sale Process? Part II
In Part I of this series, we briefly discussed the three professionals that the seller should enlist before entering into the short sale process. We also discussed the Role of the Real Estate Agent. Next, we will discuss the Role of the Real Estate Attorney.
Real Estate Attorneys are not required participants of the Short Sale process, but can be extremely beneficial in obtaining the desired outcome for the Seller.
Attorneys are licensed professionals who have been trained to practice law in Florida, are able to read legal documents, and upon many other things, are able to negotiate with the Short Sale Lender on the Seller’s behalf. They are extremely productive in obtaining the best result of the Short Sale possible for the Seller.
The objective is for the Seller to complete the Short Sale transaction without any further obligations. Sometimes the Short Sale Lenders will require the Seller to execute an unsecured Promissory Note in an effort to contribute to the loss. If the Short Sale Lender requires the Seller to contribute to the loss, this can be in the form of a cash contribution or a Promissory Note. An Attorney is the best professional who can negotiate the amounts and terms.
An Attorney will also be able to assist in the Contract formation stage to ensure the Seller is afforded the most protection possible. Real Estate Agents are strictly prohibited from practicing law. They are provided with forms that can be filled out during the contract formation stage. However, their abilities are limited solely to utilizing the forms. Therefore, having a real estate professional "handle" the entire transaction could pose a significant problem for the seller.
A Real Estate Attorney is licensed to practice law and can draft the necessary documents throughout the process to ensure the Seller is provided with as much protection as possible through the entire transaction.
A Real Estate Attorney is qualified to review the requirements of the Short Sale Lender and comply with those requirements so that a clean, complete and precise package is assembled for submission to the Short Sale Lender.
Attorneys are able to discuss the attachments in the package with the Short Sale Lender and explain the hardship the Seller is experiencing. If necessary, Attorneys are extremely effective and are able to have the file escalated to speak with the necessary individuals in the supervisory capacity.
Sometimes the Seller has two or three loans on the subject property. The Real Estate Attorney will be productive by being able to negotiate between those lien holders so that all lenders agree to an amount to be paid to each of them at closing.
Upon receipt of the formal approval letter from the Short Sale Lender, the Attorney will carefully review it to make sure it was prepared in accordance with the agreement between the Short Sale Lender and the Seller. Short Sale Lenders may try to include language in the formal approval letter that may continue Seller’s obligations. An Attorney is qualified to review the formal approval letter and continue further negotiations so that Seller receives the best result possible from the Short Sale Lender.
A Real Estate Attorney is extremely beneficial in bringing the transaction to a closing. Attorneys are able to write title insurance and handle the closing. There are many benefits of having an Attorney close the transaction. Most of the time, Short Sale Lenders permit the Attorney’s fees and closing costs to be paid from the proceeds of the sale, just like the real estate commissions.
Click here to re-read Part I. Click here to go to Part III.
This Blog was written by Annette Giardina Haber, Esquire, of the Dellutri Law Group, P.A. Ms. Haber runs the Firm’s Real Estate Department and concentrates her practice as a real estate transaction attorney. She represents clients through loss mitigation options, drafts contracts, issues title insurance and handles residential and commercial closings.
