As the listing agent, you know that when it comes to short sales in Illinois, lenders don’t want to bite at the lowest price. Upon conducting a Broker Price Opinion (BPO), lenders will always ask for a counter offer if they don’t agree with the value of the listing.
A lender will agree to release the seller’s mortgage if they feel it’s justified. Listing agents can achieve this by providing a listing history and their own analysis based on comparable sales. Relying on the buyer’s highest and best offer is a non-starter, paving the way for negotiation, which is where a real estate attorney comes in.
To protect the best interest of the seller, including the entry of a foreclosure judgment, it’s important to recommend that they hire a real estate attorney who can manage the foreclosure process if it is proceeding concurrently with the short sale negotiations. Another advantage of using an attorney experienced in short sales is that they can determine if there is information that the Seller is entitled to keep private--then, because of the confidential relationship between the attorney and the client, the attorney can determine how best to deal with that information.
Only Real Estate Attorneys Can Provide Legal Advice
Because the judicial foreclosure process in Illinois takes such a long time, lenders generally will go forward with filing suit, notwithstanding negotiations pending for a short sale. Knowing the foreclosure process in the county in which the property is located is critical to understanding when and how an attorney’s involvement in the foreclosure is necessary. While there are some lenders who are less concerned with granting a short sale, it is important that an attorney explore with the homeowner what the implications of judgment, a “consent foreclosure”, or a Deed in Lieu of Foreclosure can do for their situation and to their credit if a short sale cannot be negotiated.
The confidential relationship between a seller and an attorney affords the most protection because the attorney doesn’t have to disclose confidential information regarding the seller that might jeopardize a short sale or force a contribution. For example, an attorney can represent a seller who has exempt assets--ones that no creditor can have the right to access--and keep that information private. A listing agent, by contrast, may not have that luxury.
Understanding the Short Sale Agreement
The terms of a short sale agreement are best interpreted by a real estate attorney, because it has a legal interpretation and legal consequences. While a lender may issue a short sale approval letter, for example, the seller may still be accountable for any deficiency following the closing. The attorney may need to advise on whether a Bankruptcy might be necessary and, if so, when the timing would be best. Bottom line: only an attorney can advise your client about the legal impact of the terms of the agreement and what legal rights they have and options they should consider.
Familiarity with Lender Processes
Real estate attorneys experienced in short sales know how the game is played. Not every lender takes the same approach, as some require different documentation and look at certain aspects of the transaction differently. Certain lenders are straight forward, while others put sellers through the ringer. An experienced short sale attorney brings order and options to the process by preparing documents and the parties to prevent lenders from taking advantage of your clients.
We Can Help You with Short Sales
When your clients are facing foreclosure, Erica Minchella can explore options and negotiate on their behalf to obtain the best outcome. With almost 40 years of legal experience, she helps sellers manage this minefield, feeling satisfied with their transaction. Get started by scheduling a consultation today.