Short Sales of Real Estate
At Christenson & Fiederlein, PC, our attorneys can assist you with protecting your assets and as part of that protection, assisting in the negotiations with your lender regarding the sale of real estate.
What is Asset Protection and how does it work in a short sale transaction?
In a short sale, a property is sold when a seller has negative equity in the transaction. We can help clients negotiate with their lender/bank the payoff or waiver of the deficiency balance on the loan thereby protecting the client’s current assets and avoid a future collection by a creditor.
Short Sale Transaction Example
- Net Sales Price: $250,000.00
- Mortgage Loan 1: $260,000.00
- Mortgage Loan 2: $40,000.00
- Closing Costs: $20,000.00
We can negotiate with lender #1 to discharge its mortgage for receipt of a certain sum with a waiver the $10,000.00 deficiency balance. The Lender for Mortgage #1 will usually pay a nominal sum to Lender #2 to discharge its Mortgage #2. The deficiency on Mortgage #2 then has to be negotiated or if not negotiated it is open for a collection against you, if not charged off by the creditor.
If you do not have an attorney, you may not understand the complex legalities of this transaction. You can be sued years after the short sale is completed on the deficiency balance by a collection agency. It may cause you to file a bankruptcy to protect yourself. You may be liable to the IRS for the waiver of debt. Your realtor may not understand what a deficiency is and the realtor will get paid a discounted rate whether you negotiate the deficiency or not. Further, the bank may commence with the foreclosure sale if you do not retain an attorney to have the foreclosure sale adjourned, allowing you time to find a buyer and complete a short sale.
Examples of Satisfied Clients
- Represented a client in Oakland County on a short sale and obtain a waiver in full of a loan deficiency of $140,000.00. Client never defaulted on mortgage and protected a foreclosure on his credit report and avoided a potential chapter 13 bankruptcy. Client had moved to a new home in a different state before selling second home via short sale.
- Represented a client in Genesee County needing to negotiate a payoff for a second mortgage company that was commencing with collection proceedings after foreclosure of the first mortgage. Saved client $30,000.00 of debt and avoided bankruptcy.
- Represented a client who obtained a waiver in full of $300,000.00 on its first mortgage on a short-sale transaction and discharge of the second mortgage lien.
- Represented clients facing commercial foreclosure and successfully negotiated a deed in lieu of foreclosure and negotiated a reduced loan to avoid a potential bankruptcy with a savings of over $100,000.00.
- Received referrals from realtors and title companies assisting their clients in negotiating with their lenders to assist in facilitating a quicker short sale transaction as it is in the best interest of all parties to short sale transaction that the debtor/seller be represented.
Let Christenson & Fiederlein, PC help you protect your assets and future livelihood in a short sale real estate transaction.
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