Yonkers Short Sale: Do You Need an Attorney? YES

By
Real Estate Broker/Owner with J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY License # 49FA1074963

Here's one from the other side of the closing table, where I represented buyers on a 5-month odyssey to purchase a short sale in Yonkers. It made me appreciate the waiting game that buyers must endure, and how valuable status updates are to home purchasers of a short sale in order to stay engaged and committed to the purchase. Buyers need to be updated to, among other things, time their mortgage application, appraisal, and rate lock.

Note that I did not say anything about ordering title work. Title work in a short sale MUST be ordered by the seller's attorney in the beginning to ensure there are no 3rd party liens that might scuttle the sale later on. 3rd party judgments and liens are common in default properties because when there is financial hardship, there are other bills than the mortgage that go unpaid.

The home my clients sought to purchase was perfect for them- a recent build on a dead end street with a good location for their commute to work. Things on the seller's side were not organized from what I could see, until I made substantive contact with the seller's attorney, who entered negotiations later in the game when a private 3rd party hired to negotiate the short sale was sacked mid-process. I can't judge their circumstances, only the scenery from our point of view. From contract signing in May until August, everything seemed to be in limbo.

In early August, the seller's attorney spearheaded negotiations. The short sale was approved in late September with terms the seller could live with. We closed September 29, which was a nice anniversary gift. His communication with me was crucial to my buyer clients' management of their mortgage financing. When they were ready, we were ready. No delays, no snafus, minimal drama.

This was a unique file in that I had a direct line of communication with the seller's attorney, which brokers seldom have. Typically, I would deal with a listing agent, but that agent would be the conduit to their attorney. But the bottom line here is that the attorney's involvement was indispensable, and the communication with our side affected a successful outcome. New York is different from many states where an attorney is not part of the process. But in New York, Connecticut, and New Jersey, it is clear to me through experience that without an attorney closely involved in the short sale, the closing may not succeed.

(originally posted at New York Short sale Blog)

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Topic:
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New York Westchester County Yonkers
Groups:
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I Love NY
Short Sale Specialists & Pre-Foreclosure Education
Short Sales Specialists
Short Sale REALTORS®
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Rainer
372,583
Tish Lloyd
BlueCoast Realty Corporation - Wilmington, NC
Broker - Wilmington NC and Surrounding Beaches

Philip ~ Educational post -- I've been through so many of these and to have a strong advocate makes all the difference in the world.  Congratulations on the settlement and thanks for the information.

Oct 06, 2010 04:08 PM #1
Rainmaker
230,379
Dee Mayers
Covina, CA
San Gabriel Valley, CA

So glad this was a win-win for everyone, congratulations.

Oct 06, 2010 04:50 PM #2
Ambassador
2,363,990
Fred Griffin, on leave of absence from ActiveRain
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Philip, nice blog. 

My state of Florida is a "No-Attorney" state; we can close at a Title Insurance Company with no Attorney involved.

Nonetheless, I will absolutely insist on Attorney review before proceeding with a Short Sale - and that was before the Foreclosure Fraud Debacle.

Oct 06, 2010 05:28 PM #3
Ambassador
2,743,836
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

We're not attorney managed in MD or VA.  The key to getting to the closing table here is researching the qualifications and knowledge base of the listing agent. 

The agents/brokers in my network are all buyer's agents who understand short sales.  When we see a home in inventory that is suitable for a buyer/client, we then have to research the ability of the listing agent to get their job done.

What a nightmare.  However, we don't have walking buyer/clients and we get to the closing table.

Oct 06, 2010 10:34 PM #4
Rainmaker
645,636
Susan Mangigian
RE/MAX Preferred, West Chester, PA, RS152252A - West Chester, PA
Chester & Delaware County Homes, Delaware and Ches

PA is another state where you may have an attorney, but one is not required.  I think that attorneys have a bad reputation, as Realtors do, due to a few bad apples.  Most attorneys I've met have been helpful and competent and a pleasure to work with.  

Oct 07, 2010 01:16 AM #5
Rainmaker
1,055,452
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

I use an attorney on all my short sales. I would not want to take on the negotiating myself for a lot of reasons especially the time involved.

Oct 07, 2010 01:19 AM #6
Rainmaker
733,028
Eileen Hsu
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Attorney is a must with New York state. That is the same as Manhattan New York. Attorneys....

Oct 07, 2010 02:28 AM #7
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J. Philip Faranda

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