One of the hot topics that real estate agents continually bring up is the prospect of allowing an attorney to negotiate the short sale approval with a distressed home owner’s lender. Typically, in this type of situation, you as the home owner hire a real estate agent to list and market your home. You also sign an agreement with an attorney to handle the negotiation of the approval, and you will pay the attorney an up-front retainer before the work is even done.
There’s nothing wrong with seeking legal advice for LEGAL MATTERS. But short sales are NOT something that Attorneys should be involved with, ever!
“REALTORS NEED TO NEGOTIATE SHORT SALES, PERIOD!” – Brian Choat
I agree completely, and here’s why. Attorneys are not in the real estate business. The success of a short sale is dependent upon the knowledge of the real estate market. Attorneys specialize in litigation of legal matters in court, not real estate.
As your agent, I would NEVER recommend handing over your file to a 3rd party that you have to pay up-front. I do all of the negotiation myself, and when needed, I have talented people on my team who help me, who are NOT attorneys.
Realtors! If you’re handing your files off to third party negotiation companies, you’re doing your clients a disservice and you should either not take the listing, or refer it to someone you know can close short sales.
Home owners, make sure you do your research. Ask your agent if they’ve ever closed a short sale. If they haven’t, then they should be referring you to someone who has.
A little over a year ago, I was representing a client in the short sale of their home. As is the case in many, many short sale contracts, the approval process took long enough to give the buyer a chance to walk away. My client, who had never done a short sale before, and didn’t know the intricacies of the process, was a bit timid about continuing without the “hard-hitters” that the attorneys made themselves out to be. To move forward, the file was handed off to the attorneys, and I was still their agent on the deal. Literally months later, after the attorney had already been paid, and the price had dropped significantly, an agreement was negotiated by a paralegal, not a real estate agent. The communication was horrible between the attorney and the client, and the attorney was very difficult to reach. I was in the dark the entire time, and it’s my job to represent my client. I did not feel at all comfortable with the situation, and by the time the house closed escrow, my client had written off the attorney as a vulture just trying to cash in on the short sale process.
That’s basically the reason attorneys have gotten involved. They use scare tactics to bully home-owners into using them after they’ve consulted with them regarding the financial implications (a totally separate issue) that the short sale will have on them.
Negotiating a short sale has absolutely nothing to do with potential future litigation between the lender and the home-owner. A short sale is a short sale is a short sale, and real estate agents who have done them are the only ones who should be doing them.
No more attorneys.
