For the past 3 years I have been working with a client base that, more than normal, consults with their lawyers regarding the issues surrounding their real estate transactions. I am speaking, of course, of distressed homeowners who are facing foreclosure. As a Certified Short Sale Specialist in King County my clients face a myriad of legal issues surrounding their real estate that most homeowners don't have to consider.
Issues such as the following:
How is foreclosure going to affect me legally?
Will I have to pay back any money that the lender is not able to recover from a short sale or foreclosure?
Should I declare bankruptcy?
What should I do if the lender files a lawsuit against me?
I recommend all of my clients seek legal advice from their attorney. The results from different attorneys are definitely mixed. Some attorneys support the clients efforts to sell the property prior to the lender foreclosing. Others tell their clients just to let the property go back to the bank, or to an investor, at the trustee's sale.
I find the variety of responses from my clients and prospective clients perplexing. Why such a wide range of responses? Considering the benefits of short selling and the lack of cost to the client why would you not short sell? Consider the benefits:
1. Short Sales will gain you 2-3 more months in the house payment free. This gives you time to save up for the eventual move.
2. Short sales are less damaging to your credit. Short Sale Credit Issues
3. You can recover from a short sale and be ready to buy a house again in 2 years, if you chose to.
4. It costs you nothing.
Still, about 50% of the time I get that answer form the client "my attorney said just let it go to foreclosure.". When discussing the subject with various individuals you get responses like "there's nothing in it for them so they just say let it go", or "there's no difference between a short sale and foreclosure so why bother". Personally I think they have good reason for their recommendations and would like to hear from some attorneys what their thought process is on the matter.
Ken Crotts, Certified Short Sale Specialist
Windermere Real Estate 206-999-7998
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