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National Directory of Short Sale Attorneys & Lawyers


National Directory of Short Sale Attorneys & Lawyers

Short sale law firms specialize in representing both buyers and sellers of short sale properties. A short sale occurs when the proceeds from a property sale are insufficient to cover the existing mortgage(s). When that happens, the mortgage lender either eats the loss or is able to force a deficiency judgement, where the homeowner’s personal assets are used to compensate the lender’s losses. Having an experienced law expert can guide a seller through the perils of short selling their home and assist a buyer in executing a short sale purchase. HouseCashin maintains a current directory that lists top-rated short sale attorneys in your area to ensure that you can find the best local short sale professional.

Frequently Asked Questions

A short sale lawyer is a real estate lawyer who specializes in representing parties involved in a real estate short sale. Very rarely will real estate attorneys actually describe themselves as “short sale attorneys”. For buyers, short sale attorneys will help craft purchase offers and work with mortgage lenders to move the purchase process to a close. For sellers of a short sale property, a short sale lawyer will help them get approved by the mortgage lender to short sell their property (instead of simply foreclosing). They will then help ensure that the sellers don’t face a dreaded deficiency judgement.

A short sale attorney can advise struggling homeowners on how to avoid foreclosure by utilizing a short sale and also how to avoid a deficiency judgement. Many sellers - especially those with significant personal assets - will not be able to completely avoid the risk of a deficiency judgement being ordered by a court to cover a mortgage lender's losses in a short sale. A short sale attorney can review a home seller's financials to see whether they are likely to be approved for a short sale by a mortgage lender and whether they are at risk of a deficiency judgement if they do qualify. They can also advise on whether certain asset protection strategies - such as an asset protection trust - might be able to shield a short seller's assets against a mortgage lender’s deficiency judgement. While banks generally do not approve a short sale until a buyer makes an offer, short sale attorneys can sometimes help homeowners get a pre-approved short sale. Just like a pre-approval letter for a mortgage, this is not a commitment by the bank, but rather an indication that the homeowner is likely to be approved for a short sale given their circumstances. Short sale attorneys also represent homeowners who have taken out a reverse mortgage to access home equity. Sometimes, homeowners who take out a reverse mortgage find that they’ve stripped too much equity from their home to fully repay the reverse mortgage amount during a property sale, which can prevent the mortgage lender from approving a sale. However, because reverse mortgages are non-recourse loans, mortgage lenders are unable to pursue a deficiency judgement against reverse mortgage borrowers.

Like most attorneys, short sale attorneys will almost always charge an hourly fee that averages between $250-$500 per hour. Real estate law offices will generally provide prospective clients with quotes that show their rates along with an estimate of the total required hours and price for the short sale process.

A short sale will cause significantly less damage to a home owner’s credit score than a foreclosure, but they are complex and need to be conducted according to a specific process and the lender’s requirements. So consulting a short sale attorney prior to attempting to short sell your property is usually wise. Also, avoiding a foreclosure can create the opportunity for sellers to receive offers somewhat higher than the listing price (e.g. a bidding war) which can pull them out of a short sale situation altogether. Because mortgage lenders will not actually approve a short sale until a house receives an offer, listing a property is a necessary first step for any seller in a short sale transaction. Sometimes, sellers find that their home isn’t getting the kind of offers that would allow them to avoid a short sale. In these cases, a short sale attorney can show mortgage lenders that a short sale is preferable to a foreclosure given a home’s position in the market. Not every seller will be able to use a short sale to avoid a foreclosure, and for those who are approved by their mortgage lender to short sell their property, avoiding the risk of a deficiency judgement will depend on their ability to make the right preparations for a short sale. Whereas your real estate broker will be paid on a commission for closing a short sale, a short sale attorney is usually paid hourly and will provide homeowners and investors with objective advice during a short sale process.

An experienced real estate lawyer can be invaluable when navigating the slowness and unpredictability of mortgage lenders during a short sale. A short sale purchase offer can take months to be approved only for the mortgage lender to ask for changes in the terms or cancel the deal altogether at the last minute. Buyers of short sale properties will quickly find that banks have a very opaque process for approving short sale offers. A lawyer can advise your broker on the lowest price a mortgage lender is likely to accept and then help keep the purchase process on track and running smoothly. One of the ways that short sale attorneys do this is by presenting a compelling argument to mortgage lenders that a short sale is inevitable given the current market (with a foreclosure being the alternative). While it isn’t required to have a lawyer when buying a short sale house, a good lawyer can be far more equipped than your average real estate broker to negotiate with a lender and craft an offer that appeals to the lender’s requirements in your location. Different mortgage lenders will have substantially different appetites for entertaining a short sale, so an experienced short sale attorney can help identify which short sale properties will be the easiest to execute for a bargain-hunting buyer.

Are You a Credible Short Sale Attorney?

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