Episode 2- The Short Sale

This Episode of “Use the Law”, Las Vegas Nevada attorney David Rahm discusses the advantages and disadvantages of a short sale.

Podcast Transcript:

The Law Offices of the David Rahm Law Group receive phone calls every day from realtors wanting to know if we will negotiate, on their behalf to the bank, to obtain a short sale.  Generally, we say no!  The reason why is because the short sale process, is a long process.  It can be a long process and  with some banks it takes as long as 8 or 9 months to get them to approve a short sale.  Realtors tell homeowners, desperate homeowners all the time, “put your house up for a short sale.” Now we have no problem with that.  We recommend that as well.  But the problem is that even if you find a short sale buyer, with so many house on the market and not that many people chasing them; even if you find a short sale buyer, then you’ve got to submit the offer to your existing lender and get them to approve the short sale.  And you also have to be very careful to make sure that they’re going to agree to write off the difference instead of coming after you for the deficiency if you sell the house for less than what is owed against the home.

Realtors are not attorneys!  They are not qualified to negotiate on your behalf with the bank.  Many will tell you they can.  But, they are not experienced negotiators in this area.

I would caution you (the homeowner) that if you decide to do a short sale that you need to understand who your lender is, and what their process for approving a short sale is; and make sure that you can get your house sold and closed before it gets foreclosed.

I have many examples of clients coming to me and saying,
“I put my house on the market.  I quit making my payments.  The bank told me to quit making my payments.  They told me they would approve a short sale, and now they are trying to evict me; and they never approved my short sale.”

The banks are flooded with requests for short sales, and in many cases that is a process that can take three to six to nine months to get approved.  The problem is if you are in default on your mortgage the odds are just as good you’re going to get foreclosed and evicted from your house before the short sale gets approved.

The other problem you have is the prospective buyer doesn’t want to stick around for six or eight months while you try and get a short sale approved.  So a short sale is a valuable alternative to foreclosure.  It is a valuable alternative to Deed in Lie of foreclosure.   But it has its limitations, so you need to be sure that when you decide to go into a short sale you understand the process and how long it is likely to take to get your bank to approve it.

If you would like to have a FREE CONSULTATION with our Law Office we will help you in that process.  The short sale being one alternative, and a loan modification and possibly mediation, and possibly bankruptcy being other alternatives.

You should look at and consider all of your alternatives before you decide how to proceed.

To Schedule a FREE CONSULTATION, you can call us at 702-369-4663