Orlando Real Estate

Lawyers Want To Take Over Florida Short Sales

March 6th, 2011 9:30 AM by David W. Welch

You have a right to an attorney, but I am not aware of any instance in Florida requiring you to hire an attorney. You can draw up your own will, file for divorce and even represent yourself in a civil or criminal trial. I do not recommend it. Now the Florida Bar and our new "conservative" Attorney General are backing a proposal "requiring" sellers pursuing a short sale to hire a lawyer. Of course, it's not about the money. (yeah right) Don't get me wrong, I strongly encourage every one of my short sellers to seek the advice of an attorney. Every Realtor I know highly recommends their short sellers seek legal advice from a qualified attorney. Requiring home owners to hire a lawyer is a whole different subject.

There are potential legal consequences of pursuing a short sale that every short seller should be aware of, and only a lawyer can advise them of their specific situation. Every person that completes a short sale will have their credit adversely affected. They may also be on the hook for a deficiency judgment allowing the bank to collect on the shortfall at a later time. Their bank may require them to sign a note or bring money to the closing in order to obtain approval of the short sale. When the short sale approval letter is obtained from the seller's lender it will specify the terms of the approval. Ideally, the bank will approve the short sale and waive their right to pursue a deficiency judgment. Much of the time this is not the case, but the standard short sale addendum to the sales contract allows the seller to decide whether they want to accept the terms of the short sale approval.

The time to get legal advice is upfront. Know your options ahead of time, because you will have a limited time frame for acceptance of the approval and to close your sale. Understand that, whether you are represented by a lawyer or not, your lender is going to decide under what terms they will approve your short sale.  They are negotiable, because they do not want to foreclose. However, they often make decisions that defy rational business judgment as far as I am concerned. Be prepared for something less than the ideal, judgment free, short sale. No lawyer or Realtor can guarantee any result of a short sale.

David Welch Real Estate Optimist, Orlando Real EstateAny Home-Any Phone

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Posted by David W. Welch on March 6th, 2011 9:30 AM


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