When Might You Need a Lawyer for a Short Sale?
A lawyer can be useful in various situations, such as when there is a possibility that a deficiency judgment will be entered against the homeowner; when a homeowner needs help understanding the terms of a short sale agreement; and where a homeowner thinks that a foreclosure is bound to happen regardless of the short sale.
In serious or extreme cases, a homeowner will also need a lawyer if they think a short sale fraud has been committed.
As mentioned, there are some circumstances where a deficiency judgment may be issued against the homeowner despite the short sale. When this happens, the deficiency judgment will typically be based on the difference between what the homeowner owes the mortgage company and the proceeds collected from the short sale.
In those situations, a lawyer can help the homeowner to either get the deficiency judgment dismissed or negotiate on their behalf for a lower amount. A lawyer will also be able to assist a homeowner in court where they can help prevent a foreclosure from occurring and can defend and protect the homeowner’s rights during the process.
Why Should I Hire a Lawyer to Negotiate a Short Sale?
The following are some reasons for why a homeowner should consider hiring a lawyer for a short sale:
Lawyers Can Provide Legal Advice About Legal Documents: Hiring a lawyer could be beneficial for a short sale because if the homeowner needs any legal advice or has any legal questions, a lawyer will be able to provide those answers. In contrast, a real estate broker who does not have a law license will not be able to give the homeowner any legal advice.
Lawyers Can Help Homeowners Negotiate: The first step of a short sale is to ask the lender to release its mortgage lien on the home in exchange for the proceeds of the sale. This is not a simple task because lenders always want to be paid in full. A lawyer can provide the homeowner with the information needed to convince the lender to go through with the short sale deal and can negotiate on the homeowner’s behalf with the lender.
Lawyers May Help Reduce or Eliminate Liability for Deficiency: A lawyer can help negotiate a waiver of the deficiency judgment or assist the homeowner with settlement negotiations to reduce the amount owed to some lesser amount. They can also make sure that this is included in a contract agreement to use as further proof if necessary.
Lawyers Can Get the Deal Done Efficiently: Since lawyers can assist with all aspects of the deal, including being able to communicate with all parties, it can make the short sale process go more smoothly and get it done efficiently.