It is important to understand your servicer and investor guidelines before taking on a short sale with a 2nd from a smaller local bank or credit union. You may not be able to get there from here. We were surprised on a couple of short sales in the past two weeks because the servicer for…
- Tag: 2nds in a short sale
10% of the amount owed: As we all know the land of short sales is anything but settled. Even after three years of doing this full time there always seems to be something new coming or going…like unsecured promissory notes or confession of judgments. Over the summer all of the investors and servicers for…
What Agents Say
The following is not to be construed as legal advice. Consult an attorney today to learn more about your rights.
What is a short sale?
A short sale is a sale of real estate in which the sale proceeds “fall short” of the balance owed on the note and deed of trust. The note holder or “investor” has been granted a secured interest in the property through the deed of trust. The deed of trust is recorded with the Register of Deeds in the county in which the secured property is situated.
The note is serviced by a bank or a note servicing company (servicer). The bank and the note holder can be the same entity but are usually separate. The negotiation of the short sale is the process in which the seller, usually through his real estate agent or attorney, negotiates a release of the secured interest in the property in order to allow the property to be sold to a third party buyer for an amount less than what is owed. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the “deficiency.”
Why would a bank be receptive to a short sale offer?
The bank will typically determine the value of the property by determining the probable selling price from an appraisal or Broker Price Opinion (BPO). The bank knows from experience that a “market price” short sale offer will not only save them the time and expense of a foreclosure; the time, trouble and expense of taking title to the property after a foreclosure and selling it through their REO (Real Estate Owned) department; but will usually bring 15% to 20% more than if it goes through foreclosure.
I am a real estate agent. Why do I need a law firm to handle a short sale?
The North Carolina Bar Association has stated, “Generally, a real estate agent can negotiate strictly financial terms on behalf of the client. Once questions arise about the legal rights of the client, such as whether a deficiency judgment may be entered or if there will be a complete release of liability or if there is a pending foreclosure, the agent is no longer negotiating financial terms, but is negotiating a legal settlement. That would be the practice of law.” Undertaking short sale negotiations when the foreclosure process has already commenced leaves agents open to the liabilities and responsibilities normally associated with an attorney. There are also issues concerning the unauthorized practice of law. The Unauthorized Practice of Law is a Class 1 misdemeanor criminal offense that may be prosecuted by the local district attorney. There are also issues with agents undertaking short sales as related to the North Carolina Debt Adjuster Statute. The violation of this statute also could expose an agent to criminal liability. Please go to the Home page and click on “The Attorney Short Sale Management Solution” for further explanation on why hiring Wilde Law Firm, PLLC to work on your short sale is protects your interests.
What is an agent’s role in the short sale process?
The Seller’s Agent has two main responsibilities in a short sale: 1) help gather the required financial and hardship documents from the Seller, and 2) be present at and prepared for the BPO/Appraisal ordered by the lender. The Buyer’s Agent’s main responsibility is to make sure that the Buyer is qualified financially and will be able to close within 30 days of the short sale approval. If the Buyer is getting a loan, the Pre-Qualification letter must be submitted in the short sale package. If the Buyer is using cash they will need a Proof of Funds.
Why is it important to have all the documents ready when sending the initial short sale package for review to the lender?
Sending in a complete short sale package for review to the lender the first time makes a big difference with regards to the timeline for a short sale to be completed. The Short Sale Package is fairly standard throughout the industry. Some banks will have additional documents for the parties to sign. A familiarization with the documents typically deemed necessary by lenders for a complete Short Sale Package can ensure the short sale process moves along smoothly and expeditiously. Missing documents slow the process down because in some instances the review will not proceed unless certain documents are received by a lender’s loss mitigation department. This is why you should speak with one of the experienced short sale lawyers at Wilde Law Firm, PLLC today. Since the foreclosure process many times does not stop while a short sale package is being reviewed it is important to get the package reviewed and approved before any pending foreclosure sale date. The short sale attorneys at Wilde Law Firm, PLLC give the careful attention necessary to each file to guide a short sale to successful completion. For a further explanation on why you should speak with a North Carolina short sale lawyer at Wilde Law Firm, PLLC today please refer to the Attorney Short Sale Management Solution.
How long does the short sale review process take?
There is no definite time line and each case is different, but typically from submittal of the short sale package to bank approval usually takes 45 – 60 days. Some banks will take less time and some banks will take longer.
Can a short sale be completed between family members or friends?
Most all banks have an Arms Length Transaction requirement. The Buyer cannot be related to the Seller, be business associate or a close personal friend. There cannot be any side agreements between the Buyer and Seller regarding money, rental agreements or future options to purchase. Many banks have the parties sign affidavits or certification documents to that affect. Speak with one of the North Carolina short sale lawyers at Wilde Law Firm, PLLC today to confirm your short sale is an Arm’s Length Transaction.
Why should we hire Wilde Law Firm, PLLC to handle our short sale?
Wilde Law Firm, PLLC and its attorneys exclusively practice North Carolina short sales law. The office is dedicated to successful North Carolina short sales and helping North Carolina real estate agents, buyers and sellers. Put our experience with North Carolina short sales to work for you. “Let us do what we do best…short sales…so you are free to do what you do best…sell real estate.”