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Foreclosure short sales made easier with an attorney

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By : Karim El Sheikh    99 or more times read
A short sale remains a good option for avoiding foreclosure, but it often can take a long time to negotiate. This allows foreclosures to take place during the negotiations and results in a large waste of time. Realtors and in-crisis home owners can not risk wasting this valuable time so another option must be brought into the equation.

Many debt negotiation lawyers are now lending their expert skills to the short sale industry. These attorneys specialize in negotiating with banks as their profession; extending that knowledge to the real estate industry is a benefit to all parties.

Why would paying for an attorney make sense in this situation?

  • Realtors that spend 90% of their time negotiating the short sale of one home will only have 10% of their time trying to secure additional sales. While this may be a sign of devotion to the customers, it does not make good business sense in the long run.

  • Attorneys that spend their career negotiating with banks have the skills to accomplish the task fast. Time is of the essence in these matters and a lawyer may be able to accomplish in 2 phone calls when it takes a realtor 20 or more to arrive at the same deal.

  • Legal fees are now being included in many of the short sale contracts. This means that the cost of the attorney may be part of the contract and out-of-pocket expenses are not incurred to any party.

  • Attorneys have the ability to negotiate a higher commission for the realtor instead of accepting the standard 5% that is associated with this type of sale.

  • If there are second mortgages or liens on the property, an attorney can handle all the negotiations with the lien holders, freeing up time for realtor and home owner alike.

One of the most common problems with a short sale is showing hardship. A lender does not have to grant a short sale proposal unless sufficient evidence is presented to show financial hardship. Many people believe that this part is easy; however it can be the most difficult part of the transaction. Lenders want to be the first priority of the debtor. If there is even a slim chance that a restructuring of their personal budget can accommodate the mortgage payment, the short sale will be denied. Using an attorney will help you prevent this legal battle from the start. An attorney will be able to show, in good faith, that the home owner can not pay the mortgage.

Most people wishing to sell their home short are already in the foreclosure process. It may be the beginning of the process or near the end. Whichever it is, it is looming over the sale of the home. Short sale approval must be done quickly to avoid foreclosure. Having a contract to sell the home on a short sale will not prevent the proceedings. Using a lawyer will help move the process along quickly and make sure the sale takes place in proper time.

Finally, a short sale is a legal contract and contains many legal documents. The home owner, and perhaps the realtor, may not fully understand all the fine print of these contracts. Since it is critical to know and understand the ramifications of signing these sale papers, the use of an attorney makes sense. An attorney can review these documents, explain in detail what they mean and even protest unfair clauses in the documents. This will help to avoid unpleasant surprises down the road.

On average the use of an attorney will cost approximately $1500.00 per transaction. Nearly 60% of the time, the lawyer can have the costs included on the HUD-1 form and there is no cost at all. More banks are accepting responsibility for the legal fees as a way to move the homes.

Even if you are required to pay for the services it is well worth the expense. One realtor has stated that once he began using the services of an attorney for this manner, he went from 2 pending sales a month to over 20 because he now had time to promote his services.
Short sales can be the most lucrative real estate investments to obtain. Purchasingshort sales can get you in the property you want under market value.

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