Short Sale: Attorney negotiation vs. Realtor negotiation?

Question

Hi there,
I have a property that is rented out (because I wasn't able to sell before) and am looking to start the short sale process.  I was wondering if any one had any advice regarding my situation.

The main question is based on whether or not I should hire an attorney for $500 flat fee to work / negotiate my short sale... or save the money and work with my realtor who has experience with short sales.

Is there value in having an attorney involved?  Does it get me a better chance at successfully navigating and expediting the process?

(Some more details: I am current on the mortgage but only because the tenant offsets some of my loss. The tenant is moving out so time is very important. I know that being current does not provide the best leverage.)

Thanks for your time and help,
JD

Scott Hubbard · Answer

The service agreement is open-ended and and is really a fee for them to submit documentation.  It is not what this agreement says, it is what is does not say and this is why it is open-ended and really is not an agreement but a disclaimer.
         
          Since Florida is a deficiency state, you will likely have a judgment against you unless you can come up with an amount sufficient to make them waive their rights to file against you.  I have a lot of experience with CW and they are not pleasant to deal with.
          
          In my experience, CW will not subsititute a promissory note in place of a deficiecny judgmment.  A judgment has more teeth and is worth more on the secondary market for debt collections.
          
          Unfortunately, you are between a rock and a hard place.  I believe the short sale is the lesser of two evils.  Your deficiency will likely be smaller and if you can bring some cash to the closing table and hire a strong negotiator, it is possible to settle without a deficiency judgment.
          
          Good Luck!

Eric Thom · Answer

I am currently seeking only licensed attorney or re agent in California for full time short sale work, we are not newbies, just now looking to comply with new California law, Grey area or not.
ericsadmin@gmail.com

Ted Akers · Answer

Using a traditional attorney, unless they specialize in short sales, is likely a waste of your hard earned $$.  Likewise, some realtors are very good but typically only when they are true short sale specialists.  Most submit paperwork but do not totally understand the process, are not the best negotiators, and may be less likely to get the bank to forego pursuing the deficiency.  There are many experienced full time short sale negotiation/loss mitigation pros on this site.  Post here seeking them and you will likely save $ and end up with a better result.  I do not provide that service but happy to refer you to some.

Scott Hubbard · Answer

If you want a quick resolution do not use an attorney.  I was a buyer in two short sales where attorney's represented the seller's. Its been more than a year and one is still being worked out.  
      
          In one instance, the seller ended up in bankruptcy and the attorney's fees paid by the lender ended up on the fees inccured.  This seller DOES have a portion of the deficiency to payback as per the BK terms.  Therefore, he is partly paying for the attorney indirectly.
          
          I would caution anyone who uses an attorney to read the fine print.  In most cases, if the atttorney cannot get the lender to pay, then you will pay.  
         
          Just cause you might not be cutting the attorney a check does not mean you will not be paying.  It very similar to RE Agents and commissions.  They always say, the seller pays when it is really the buyer since he is bringing in new money.

Dave White · Answer

Hi JG.  I'm curious how your situation is going and if it was resolved.  I'm in a similar situation in Tampa where I'm looking to relocate but we are underwater on our house by about $30K.  We have roughly that much in savings but are wondering if there is any way to protect that savings.  Did you work with someone in Tampa that you could recommend to advise us?  Thanks for your help.

Jozef Forgac · Answer

In my opinion  it's better value in using real estate attorney who specialize in short sale negotiations. You should not need to pay for attorney as they get already paid from lender loss mitigation fee and if the same attorney perform also short sale closings attorney will make money on it without you paying any money from your pocket.At least mine don't charge me any money, but you wouldn't have any problem when you do little research.

Your other issue agent versus attorney. If you will have a choice to use salesman instead of professional negotiator you must think. Short sale transaction is about to get it correctly done and especcialy negotiated to the amount so it will be attractive to resale in this market. If there is no attractive price for the end buyer in today market you will not be able to atract any buyers. Short sale is time limited transaction not as conventional sale. Your time is ticking, so you don't have this leverage as maybe your neighbor selling conventional way with some equity in and in fair market value.

With all due respect to all agents out there doing also negotiations work on their listings by themself I saw better results with more short sales closed when agent was doing salesman part and short sale hassles get outsourced to the attorney to perform with legal and negotiation part.

Your choice. This is only from my own experience.Not many investors, agents, sellers work this out with attorneys because most of attorneys charge you and agents money upfront . If you will be able to have one without any cost to you than I'll leave it for you to decide if you will use one or not.

Another mentioned issue especially for FL deficiency judgment. Not many lenders pursuet with it, but it started to change and we see more cases with this issues, However good attorney / negotiator structure the whole deal from the beginning so no or very minimum chance of deficiency judgment will affect your short sale.

There is another thing.Most of this lenders usually try to sell judgment on the secondary market for 25-50 cents per dollar sometime the very next day after judgment. Then seller can offer low settlement on it. This create really win situation for seller even with very little obligation to pay it will have better sence to proceed with short sale instead of foreclosure.

Short sale in most of today cases is much  beter to proceed with than foreclosure and good specialized attorney on your site will be able to help you with after short sale ( deficiency judgments ) issues and work it out with your lender and implement that in short sale negotiation. 
Even if you might have to pay for some help, at the end it will cost you less than you just let it go to the foreclosure. With foreclosure you will most likely end up with deficiency judgment and lender will add everything what they can possibly add to it, so you might end up with foreclosure and maximum amount of judgment.
If short sale will not cost you anything and with all professionals doing their part not paid from your pocket and with better chance to avoid deficeincy judgment or if any than reduced to the minimum amount with settle it later on for let say 20 cents per dollar it might be much better for you than with foreclosure.

Also remember one more think this kind of attorneys are usually involved in debt settlements and and they might be able to proceed with yuor deficiency judgment settelement and save you thousands for fraction of cost.

Again this is only my opinion and my and my partners experience with this issues.

I always try to tell people standing before decision to proceed with short sale or not  to take a blank paper, divide it in half and on one half just write scenario what will happen when you will let it go to the foreclosure with all concequences and financial loss and what will happen 6-12 months from now with you and your family and at the other half what will happen when you proceed and close on short sale and how it will affect your life in your next 6-12 months.

If you don't know usual foreclosure concequenses, just let me know and I can get you free foreclosure vs short sale list FREE. There is more bad concequences with forclosure than many people know about.

I hope this will help you understand your choices in FL better now.

Cheers,
Jozef

Jozef Forgac · Answer

If you still need negotiations for short sale you can PM me for attorney performed short sales negotiations with coordinations, tracking system FREE for Sellers and RE Agents, more. You don't need local or in state negotiator, but anyway we are in Jacksonville.
In FL. I will suggest you to use attorney to do that in FL and because it will not cost you any money it is no brainer to have an attorney perform only short sales and mortgage retention plans.
PM me and I'll be happy top help you.Either you already have negotiator,but you need some help just contact me.
Jozef

Jozef Forgac · Answer

I forgot to mention for property in FL short sale negotiation will include also closing with title insurance all done by the same RE Attorney free for sellers and RE agents.

Jozef

J G · Answer

Thanks for all your feedback and advice. I really appreciate your time.

In your last reply, you mentioned that if I can bring some cash to the closing table and hire a strong negotiator, it is possible to settle without a deficiency judgment.

I know you operate in Arizona, but was wondering if you had any connections to any negotiators you trust in Florida (around Tampa?) that you could point me in the direction of?

Thanks again.

Jon Holdman · Answer

Yes, exactly. You agree to pay back a small portion and they forgive a larger chunk.

Be sure to discuss this whole situation with your CPA as there may be tax consequences.  Forgiven debt is normally treated as taxable income. There are some exceptions which may apply.

Short Sale: Attorney negotiation vs. Realtor negotiation?

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