Nice summary on about.com of what it may take to get a short sale done by a Realtor.
More information about setting up a short sales.
The Lawyer and Realtor in me would like to complement the Realtor, Ms. Weintraub, for stating the following:
I suggest that all borrowers
- Obtain legal advice from a competent real estate lawyer
- Call an accountant to discuss tax ramifications
As a real estate agent, I am not licensed as a lawyer nor a CPA and cannot advise on those consequences. Be aware the I.R.S. will consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim.--
There are a few major problems for non lawyer short sale "advisors".
In my opinion they can not legally aggregate any of the financial information, nor may they advise the homeseller as to whether they should turn over the financial information.
One of the most important pieces of the short sale puzzle is the weighing of the risk vs. reward.
On one side of the equation a homeseller has the risk of a de
Any communications made by a Realtor will not be privileged.
They are However, not everyone should follow Ms. Weintraub's advice. While this is the usual path followed by short sale "advisors" Absent other circumstance I find it to border on practicing law without a license and just plain negligent.
In my view the homeowner must be advised of what might happen if the bank does not agree to a short sale. By handing over to the bank information about the amount and location of assets you just compromised one the most important leverage points a homeowner has against a collector of a deficiency judgment.
You just made the banks job much easier. I am not advocating that you never turn over this information -- I am advocating that a homeowner be appraised of the legal situation before doing so. This information turnover must be part of a very controlled quid pro quo and if it is turned over there should be limits on how it may be used.
Any Realtor and the Realtors Broker not bringing a lawyer into this stage of the negotiation is a very pretty target for a law suit from a disgruntled former homeowner.
I suspect there are going to many Brokers getting sued when the former owners of homes get tax bills from the IRS for loan forgiveness.
California and Florida Realtors need to partner with Lawyer on short sales or foreclosure work . Our law firm has an office in San Diego and the Sarasota or Bradenton area of florida.