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Negotiating Short Sales (Video) | Asheville Real Estate

Steve Wilde | 856 Views | 01/26/2015

Welcome back to Short Sales Gone Wild. What we’re going to cover today, who can negotiate a short sale? But more importantly who should negotiate a short sale? Some states have said that negotiation of debt is the practice of law, North Carolina is one of those. But more importantly, who should negotiate a short sale?

Who Negotiates Short Sale?

The answer, a seller, or the sellers attorney? Why? Why can’t an agent do it? Simple, liability. If you negotiate a short sale, you own it. Let’s break it down. Okay, the real estate agent has a special license. That license allows them to negotiate between a buyer and a seller all day long.  That’s their arena. When you negotiate a short sale though, you’re actually negotiating on behalf of and advocating for a seller with a third-party bank. The bank or banks are not a part of the contract. They’re also negotiating their financial obligation to that bank or banks moving forward.  You can see that they’ve stepped out, and they’re no longer negotiating between the buyer and the seller.

My advice, get an attorney involved. They have Malpractice Insurance for this. Sure, agents have got E&O Insurance, but most of the time E&O Insurance is on the sideline cheering you on, but they’re not going to cover any liability, because you have stepped out of your license.  I get a call at least once or twice a month from a seller who had a short sale, and their real estate agent negotiated. And now the bank is pursuing them for their deficiency judgement. And every time they say, “I went to closing, and my real estate agent said that all my deficiencies, that $200,000 worth of deficiencies was waived, was forgiven.”  I said, “Well, send me your documents.” I reviewed the documents, they weren’t wave. Who owns that liability? Well, the real estate agent and their company is in big trouble. So you can see that it’s just not worth it.  Get an attorney involved. You go sell real estate, you get the commission. You don’t get any extra money for negotiating a short sale. Now, here is one other tip we should talk about.

When you close, always, always, always, always, always close with two closing attorneys.  Why? The buyer’s closing attorney represents who? The buyer. By law the buyer’s closing attorney represents the buyer. Who’s losing a house in this deal? The seller. Where is all the liability here? The seller. The worst case scenario ever is when a real estate agent negotiates a short sale, and then everyone closes with the buyers closing attorney.  Nobody is representing that seller who owns that liability. That’s the key. That’s the key, who owns that liability. Stay safe out there. That’s it for now. Bye.

I am a Wilde Law Firm user, because I do not do short sales. I don’t understand short sales, I don’t want to understand short sales, but they do. And they take care of it.  I use Wilde Law Firm because it makes it easy and efficient for us to be able to go ahead and put through our short sales. When we do get a contract or any kind of an offer, we get it signed by the seller. We send it over to Wilde Law Firm, and they take care of everything else for us.  They keep the buyer and the seller in the know, making it as easy for agents as possible. And we get regular updates, and once we get that contract done, we’re pretty much good to go. As agents, all we have to do is make sure that the contract gets to Wilde Law Firm, and then gets it closing. We’re all set.  It is awesome, it’s very streamlined, very little headache for me. And we’re at a 100% success rate right now.

By: Steve Wilde

Negotiating Short Sales (Video) | Asheville Real Estate

Welcome back to Short Sales Gone Wild. What we’re going to cover today, who can negotiate a short sale? But more importantly who should negotiate a short sale? Some states have said that negotiation of debt is the practice of law, North Carolina is one of those. But more importantly, who should negotiate a short sale?

Who Negotiates Short Sale?

The answer, a seller, or the sellers attorney? Why? Why can’t an agent do it? Simple, liability. If you negotiate a short sale, you own it. Let’s break it down. Okay, the real estate agent has a special license. That license allows them to negotiate between a buyer and a seller all day long.  That’s their arena. When you negotiate a short sale though, you’re actually negotiating on behalf of and advocating for a seller with a third-party bank. The bank or banks are not a part of the contract. They’re also negotiating their financial obligation to that bank or banks moving forward.  You can see that they’ve stepped out, and they’re no longer negotiating between the buyer and the seller.

My advice, get an attorney involved. They have Malpractice Insurance for this. Sure, agents have got E&O Insurance, but most of the time E&O Insurance is on the sideline cheering you on, but they’re not going to cover any liability, because you have stepped out of your license.  I get a call at least once or twice a month from a seller who had a short sale, and their real estate agent negotiated. And now the bank is pursuing them for their deficiency judgement. And every time they say, “I went to closing, and my real estate agent said that all my deficiencies, that $200,000 worth of deficiencies was waived, was forgiven.”  I said, “Well, send me your documents.” I reviewed the documents, they weren’t wave. Who owns that liability? Well, the real estate agent and their company is in big trouble. So you can see that it’s just not worth it.  Get an attorney involved. You go sell real estate, you get the commission. You don’t get any extra money for negotiating a short sale. Now, here is one other tip we should talk about.

When you close, always, always, always, always, always close with two closing attorneys.  Why? The buyer’s closing attorney represents who? The buyer. By law the buyer’s closing attorney represents the buyer. Who’s losing a house in this deal? The seller. Where is all the liability here? The seller. The worst case scenario ever is when a real estate agent negotiates a short sale, and then everyone closes with the buyers closing attorney.  Nobody is representing that seller who owns that liability. That’s the key. That’s the key, who owns that liability. Stay safe out there. That’s it for now. Bye.

I am a Wilde Law Firm user, because I do not do short sales. I don’t understand short sales, I don’t want to understand short sales, but they do. And they take care of it.  I use Wilde Law Firm because it makes it easy and efficient for us to be able to go ahead and put through our short sales. When we do get a contract or any kind of an offer, we get it signed by the seller. We send it over to Wilde Law Firm, and they take care of everything else for us.  They keep the buyer and the seller in the know, making it as easy for agents as possible. And we get regular updates, and once we get that contract done, we’re pretty much good to go. As agents, all we have to do is make sure that the contract gets to Wilde Law Firm, and then gets it closing. We’re all set.  It is awesome, it’s very streamlined, very little headache for me. And we’re at a 100% success rate right now.

By: Steve Wilde