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San Diego Short Sales What if you owe more on your home than it is worth?
A short sale to an attorney is like a scalpel to a surgeon. A short sale is not always the right tool and even when it is the right tool it must be used in conjunction with informed consent and properly drafted legal releases. Just a few of the issues to consider:
1. Federal loan forgiveness law does not relieve all sellers from loan forgiveness and does not relieve sellers from California taxes on loan forgiveness.
2. Loan forgiveness law does not relieve sellers from finacial liability to the lenders.
3. Realtor's form listing agreements do not do enough protect sellers.
4. Realtor's Purchase and Sale agreements do not do enough to protect seller from buyer's Realtor, buyers and lenders. Realtors are not licensed to suggest improvements to your contracts or review your closing documents, contracts and escrow instructions. (Update: Many sets of escrow instructions are vague at best. Bank of America, Ocwen and others send out closing paperwork which are deceptive. ( In my opinion.)
5. Lenders are paying the Realtors - so who ensures that the sellers are relieved from having to pay back the loan balance. Get an analysis of your closing document in writing.
6. If your Realtor has an attorney, make sure the attorney signs a retainer agreement with you, making sure you are the client, not the brokerage.
7. Know when to offer a deed in lieu.
8. Know what to do after a notice of default.
9. Know what percentage of your Realtor's short sales result in the sellers being released in writing from a deficiency.
10. Know what you will do if the short sale is taking too long to get approved.
11. Know what to do about property taxes, homeowners dues and other likely questions.
12. Determine whether you should reveal your financial information to your lenders and whether they can use that info to deny your short sale and go after your assets.
The easy part of the short sale is finding a buyer. In fact, if necesary we can get the negotiating started by asking one of the investors we know to make a bid. The hard part is doing the short sale the right way...which we think means negotiating to keep the sellers free from a deficiency. (Something many Realtors fail to do.) To find out more about short sales and Deeds in Lieu of Foreclosure contact us.
John McConnin, Esq.
McConnin & Company Realty
Licensed Real Estate Broker since 2003.
Licensed CA Attorney since 1991.
Practicing real estate law since 1991.
Note: If you have two loans do not go into to default on your first until you find out if your junior lien holder is a sold out junior who can go after you for the deficiency.
If you have questions please fill out this form and then give us a call at 800.608.8311. If Dan picks up the phone tell him you submitted this form and you are interested in speaking with me about the pros and cons of a short sale. (free consult).
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