Short Sale, Foreclosure and Strategic Default

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Friday, August 17, 2007

California Short Sale addendum from the California Association of Realtor

The following is an addendum from the California Association of Realtors. It seems designed to notify homeowners they may actually be hurt by short sales. California has a complex legal framework which is designed to protect homeowners from deficiency judgments. These same laws may operate to protect Californians from tax liablity. Oddly, in many situations it may be better for the homeowner to accept a foreclosure rather than agree to a short sale.

Unfortunately far too many Realtors have been imporperly advising homeowners to short sale their property.

The following California Association of Realtors short sale addendum seems designed to advise homeowners to review other options before agreeing to a short sale. In my opinion, the addendum also puts limits on Realtors activities in this area of pre-foreclosure solutions.

In my opinion Realtors are on notice that they may only adverstise short sales and they may only "seek approval" of the sale from the lender. Conspicuous by their absence are the words, negotiate, represent or other words Realtors have been using to cover up the fact they have been practicing law in short sale transactions.

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