Attorney negotiation vs. Realtor negotiation?

[jdgin]

Hi everyone,
I have a Tampa Bay, FL property that is rented out (because I wasn't able to sell before and I was offered an out-of-state job) and am looking to list the house to start the short sale process. I was wondering if any one had any advice regarding my situation.

The main question is based on whether or not I should hire an attorney for $500 flat fee to work / negotiate my short sale... or save the money and work with the realtor who has experience with short sales.

Is there value in having an attorney involved versus just a realtor? Does it get me a better chance at successfully navigating and expediting the process?

Some more details: I am current on the mortgage but only because the tenant offsets some of my loss. The tenant is moving out so time is very important. I know that being current does not provide the best leverage.

I'm pretty nervous about this whole situation.

Thanks to everyone for all the education on this site.

Thanks for your time and help!

[HopingtoFind]

jdgin Welcome... the advantage of an attorney is that they would be able to protect you legally. Either one can potentially negotiate a Short sale, it is just that an attorney can review documents and make sure that you're protected from deficiency judgement, etc.

If you decide for an attorney to negotiate it for you, make sure that the lender will pay for it. Lender generally pays negotiator fees.

[jdgin]

Thanks for your reply!
I think you are on to something... if I'm trying to put myself in a position for protection and have someone look at additional angles, $500 will probably be a small price to pay.

I read the attorney retainer document and it also mentions that they would get the title work.

However, the realtor I'm looking at also works with a title company (and I think expects the title work). I hope there won't be any issues if I go the attorney route.

Have you had any experience or heard any stories regarding this?

Thanks again for your time! I really appreciate it.

[ohhhdear]

Just my thoughts/opinions

I would caution you that if you hire an attorney for $500--- to get that in writing. Lawyers are notorious for adding on more fees--unless it is in writing and/or you have absolute trust in your attorney.

As far as getting a Real Estate Agent-- be VERY picky, don't just pick anyone.

Good luck to you!

[BadBobMo]

I read the attorney retainer document and it also mentions that they would get the title work.

Attorney=deficiency judgement would me more up on the law!
I not quite sure which would be best!
But one very important question to the Attorney is how do they plan on showing the home.
Good Luck

[jdgin]

Thanks for your responses. I appreciate the feedback.

It got me thinking and I re-read the attorney retainer agreement again with your comments in mind. I've copied the "Services" and "Retainer" section below.

I think it comes down to that I don't really understand what their definition of "negotiate the terms of the short sale..." is... considering they say "Postclosing deficiency negotiations requires payment of additional fees..."
Do you have any thoughts on what they are truly offering? (like just sending in a package of my documents?)

I will ask them too, but any other interpretations would be very appreciated. I never been in this situation before so I might not know the right questions to ask.

Thanks for your time!

***
Services. In connection with the Firm’s representation of you, we will provide the following services: (a) negotiate the terms of the short sale with the lender (Please note that the Firm cannot guarantee the success of short sale negotiations. The acceptance of the terms of the short and subsequent release of liability is at the sole discretion of your lender. Also, please note that if the lender declines the terms of the short sale that the lender may pursue a foreclosure action against you and the foreclosure will not stop and will proceed with a sale date ultimately being entered and the property being sold at public auction if some action is not taken by you to resolve the delinquency with your lender); and (b) providing all title work for the closing. Postclosing deficiency negotiations requires payment of additional fees and is not covered under the scope of the short sale flat-fee.

Retainer. It is the Firm’s practice to require a retainer when we undertake a new representation; a flat fee deposit in the amount of [FEE///$500.00] will be required for the Firm’s representation in this matter. This fee represents the Firms’ fee to negotiate the terms of the short sale; accordingly our fees cover all of the above services. Our representation does not include any additional services not listed in this letter. Representation of any foreclosure action is not included under the terms of this retainer agreement. We will not bill you any attorney fees without your further express written consent.
***

[HopingtoFind]

I think it comes down to that I don't really understand what their definition of "negotiate the terms of the short sale..." is... considering they say "Postclosing deficiency negotiations requires payment of additional fees..."

Lenders when they agree to release lien might or might not release you from further liability (deficiency). Sometimes they just agree to a short sale without requiring you to come up with additional money either at closing or in the form of promisory note.

"Post closing deficiency negotiations" to me would indicate that lender agrees to release lien but you still owe deficiency, so attorney will negotiate deficiency after closing. This doesn't make sense to me, the time to negotiate deficiency is before closing.

If it were me I would not pay an attorney an upfront fee, negotiators should get the money from the lender upon successful negotiation of short sale.

[ohhhdear]

I don't trust attorneys. Most of em are crooks.

It says this is a retainer--meaning this is just the upfront money, but then it goes on to say no other money is required unless you agree--- that's conflicting info and attorneys are good at that.

I will bold the sentences which you should be very careful of.

Originally Posted by jdgin

....

***
Services. In connection with the Firm’s representation of you, we will provide the following services: (a) negotiate the terms of the short sale with the lender (Please note that the Firm cannot guarantee the success of short sale negotiations. The acceptance of the terms of the short and subsequent release of liability is at the sole discretion of your lender. Also, please note that if the lender declines the terms of the short sale that the lender may pursue a foreclosure action against you and the foreclosure will not stop and will proceed with a sale date ultimately being entered and the property being sold at public auction if some action is not taken by you to resolve the delinquency with your lender); and (b) providing all title work for the closing. Postclosing deficiency negotiations requires payment of additional fees and is not covered under the scope of the short sale flat-fee.

Retainer. It is the Firm’s practice to require a retainer when we undertake a new representation; a flat fee deposit in the amount of [FEE///$500.00] will be required for the Firm’s representation in this matter. This fee represents the Firms’ fee to negotiate the terms of the short sale; accordingly our fees cover all of the above services. Our representation does not include any additional services not listed in this letter. Representation of any foreclosure action is not included under the terms of this retainer agreement. We will not bill you any attorney fees without your further express written consent.
***

Be careful!

I agree with Hopingto Find

[Enough Already]

Hi jdgin,

We consulted with a real estate attorney, but once we decided to try for a short sale it became evident that we didn't really need to hire an attorney.

What we needed was a realtor with plenty of short sale experience, and success with getting them negotiated and closed. The realtor we hired also works with a title company, and has a negotiation team. We were also lucky enough to have been referred to him by some friends.

One of the perks of going with a realtor is the bank pays their commission, so if they don't negotiate a deal that you and bank find acceptable, and the house does not sell as a result they don't make a dime. That being the case the realtor has plenty of incentive to make it happen.

It's very important though, that you get someone who has successfully negotiated and closed these types of sales (not just one or two, but several). Find out how many they've done. Do they seem confident etc. This short sale thing is new ball game and not everyone knows how to play yet.

It seems that a lot of attorneys have suddenly gone into the real estate business. They see there's money to be made, so why not? An attorney gets a retainer from you, and (if successful) also gets a commission from the bank at the close of the short sale.

However, before you do anything I would advise that you talk to a real estate attorney (and an asset protection attorney if applicable) to make sure you've covered all of your bases.

Good luck!

[TrappedFL]

Originally Posted by ohhhdear

Just my thoughts/opinions

I would caution you that if you hire an attorney for $500--- to get that in writing. Lawyers are notorious for adding on more fees--unless it is in writing and/or you have absolute trust in your attorney.

As far as getting a Real Estate Agent-- be VERY picky, don't just pick anyone.

Good luck to you!

I am an attorney in FL, but do not deal with short sales (I am trying to work out my own SS, hence my presence on the forum).

In Florida, I think we definitely should have legal representation in the short sale, due to the threat of a deficiency judgment. I would be cautious in choosing any attorney in this business, as it seems many have jumped on this bandwagon. A lot of former closing attorneys, now lacking closings, are now doing this work. Ask pointed questions, google the attorney and firm, and search the florida bar website for discipline records. That said, $500 is more than reasonable for a retainer, which will be applied against the hourly fees. Ask for an estimate of the hours that will be spent and keep in close contact with the attorney about the time spent.