Asked 3 months ago - Bellwood, IL
FlagWe are currently in the foreclosure process.
I caution anyone who thinks they don't need a lawyer for a real estate transaction, especially for a short sale. If you have legal questions, you need to hire a lawyer.
Laws change, often. Banks have lawyers on staff who graduated from top-tier law schools. If a bank can find a way to put the squeeze on you in a short sale, they will not hesitate in the slightest especially if you do not have counsel.
Here are two good reasons why you will want to retain a lawyer for a short sale:
Release of Personal Liability
Although a bank may forgive the balance between the mortgage balance and the final sales price, the bank might not release you from personal liability. This means it is possible that the bank might be able to legally garnish your future wages, attach bank accounts or otherwise pursue you for that money. It's called a deficiency judgment.
The short sale approval letter may or may not contain verbiage that spells out the bank's specific rights. Absence of such language is no guarantee the bank has released you.
Asset Protection
Banks scrutinize a seller's financial statement. Banks examine a seller's bank accounts, tax returns and have been known to pull a seller's credit report. If the bank is taking a loss on the sale, obviously the bank would like to recoup part of that loss. That's why the bank looks at the seller's assets and disposable income.
If the seller is attempting a short sale without hardship, it is highly likely that the bank will ask for a seller contribution. Even if the seller qualifies for a short sale through a financial hardship, the bank could demand a contribution. This means the seller could be required to bring in money to close. The bank might ask the seller to liquidate a stock account or tap retirement funds.
The peace of mind that comes along with having good counsel as you navigate through a real estate transaction is priceless and well worth the investment.
I agree. Additionally it is traditional in Chicago for the seller’s attorney to order the title commitment and prepare the closing documents. As a general rule, at a short sale you will not be able to take any money away from the closing. It is likely that attorneys fee will be included in the closing fees, and depending on your payoff letter, you will probably not be required to bring any additional funds to the closing. Lastly, some people might stand to really benefit from not doing a short sale. Talk to an attorney asap. Good Luck.
More information is needed. While I agree with the other posters, your question is overly broad because it is unclear if (a) you are participating in the foreclosure lawsuit, (b) how much time remains in the lawsuit, (c) whether the lender has agreed to a short sale, (d) whether you will have a personal deficiency or will have to bring money to the closing to complete the transaction, and (e) whether you have a buyer with funds.
There are many reasons why you would want to have an attorney represent you. You are not required to have an attorney to handle any of those concerns, but because of the complexity of short sale transactions, and because many attorneys charge reasonable fees (which are sometimes fixed rate fees), the benefits of representation greatly outweigh the detriments.
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