Real Estate Attorney for Short Sales
******Disclaimer****** I would like to start this post by openly acknowledging that the contents contained within are self serving. However, with that said, it is a public service announcement worth reading.
Why you should hire a real estate attorney for short sales: Recently, I attended a short sale seminar hosted by the local real estate association. While I was pleased to find a good number of real estate agents present at the seminar further educating themselves on short sales, I was troubled by some of the “horror stories” that I heard.
One participant told the story of how another agent’s client asked for their agent’s advice regarding the tax implications and their financial liability with regards to the deficiency under the Mortgage Debt Relief Act. This agent answered the question to the best of their ability, but was absolutely wrong in their answer. The mishap ended up landing the client’s on the hook for a large tax bill they were not expecting. Long story short, the client is now suing the real estate agent. That particular agent decided to wear three hats in that transaction: the agent, an attorney, and an accountant. Quite frankly, this agent should have never answered that question. As an attorney I regularly tell clients that they need to seek the advice of an accountant because that is not my area of expertise. It is not a sign of weakness, it is fully advocating on your client’s behalf. Fortunately, or unfortunately for that agent, he will get to play attorney again while defending the lawsuit filed against him.
Another story that baffled me came from a recent client consult where the client had tried to do a short sale in the past, but the agent could not get the deal done. The client told me that the agent represented to the client that they had lots of experience in short sales and were “experts” at the process. First of all, always be wary of anyone who calls themselves an “expert” at anything. Secondly, when I asked the client why the sale failed they said because the bank countered the sale price. I waited for a further explanation as to why the deal failed, but was greeted with only silence. When I asked the client if the Buyer countered back, the client seemed confused. Apparently, this “expert” short sale real estate agent didn’t even know they could counter the banks counter! Accordingly, the deal fell though and the client wasted more time and inconvenience.
I want to be clear that I am not picking on real estate agents with this post. I am a licensed real estate agent myself, and I know first-hand just how difficult the job can be. What continues to baffle me, however, is that agents refuse to ask for help when they are in over their head. Real estate attorneys are not in the business of taking money or commissions from agents; I promise! I also realize that the very nature of the real estate agent/client relationship almost mandates that the agent give their client legal advice. However, the agent must resist that temptation. A real estate agent advising their client to seek legal representation on legal questions does not reflect poorly on the agent, it reflects that agent following the law. Quite simply a non-attorney cannot give legal advice.
So the next time you find yourself in a real estate transaction and need legal help, do yourself a favor and ask an attorney! It can save you big time in the end!