Should real estate agents negotiate short sales?
No. Absolutely not. It is replete with legal issues, risks, deficiency issues (amounting to tens or hundreds of thousands of dollars of liability to the Seller), tax implications which can be huge, foreclosure attorneys that need to be dealt with, bankruptcy courts/attorneys, divorce attorneys, U.S. attorneys in the release of tax liens, collections agencies, debt collector law firms, mortgage fraud, fraudulent short sale transactions by the buyer, etc
When should an attorney get involved and what is the fee?
A qualified attorney should be involved in the transaction immediately! We receive numerous Sales Agreements from real estate agents who have spent a lot of time and money on their listing only to become frustrated when we inform them that the transaction cannot be negotiated! Wouldn’t it be nice to find out if the deal will go through before you even take a listing and spend your precious time and hard earned money? Now you can, by referring the client to this firm. The reason you hear horror stories of Short Sales taking forever only to have your commission cut is because the real estate agent failed to qualify the transaction through an experienced attorney. Do not end up like one of the daily agents we speak to who has wasted their time and money on a hopeless sale! There is no consultation fee whatsoever; we’ll speak to whomever you’d like in order to ensure you concentrate your effort towards worthy endeavors.
A real estate agent cannot give legal advice as to deficiency judgments or if there will be a complete release of liability or pending foreclosures, stopping foreclosures, interpreting bank approval letters, tax advice, otherwise the agent begins to negotiate legal terms which result in a legal settlement that is binding against the homeowner. . . and can put the homeowner at grave risk. . . which is the practice of law. Giving advice as to legal issues from a nonattorney is the Unauthorized Practice of Law, a Class 1 misdemeanor. Furthermore, ones Errors and Omissions policy would typically exclude any unauthorized practice of law.
Why use Kayser Law Center?
Here are a few things to consider:
- You cannot navigate, negotiate and advise a Seller in a short sale without giving legal advice as to deficiency, deficiency laws, tax implications, foreclosure laws/proceedings, and sometimes bankruptcy law and proceedings, and divorce proceedings and attorneys.
- A law firm handles all of these legal issues and legal interpretation of bank documents.
- A law firm can better save a short sale if a foreclosure sale is imminent.
- A law firm can navigate bankruptcy proceedings and still get the short sale done.
- A law firm provides a legal opinion as to legal bank documents/approvals, deficiency issues, promissory notes, cash contributions, and tax implications.
- As an agent, your job is to make transactions, not spend endless hours negotiating with a bank bureaucracy trying to know together a deal.Let us do that.
- We can ensure you receive your maximum commission.
- We can get your deal closed many times without having to pay us a dime from your full commission.
Negotiating with banks is what Kayser & Associates does. It worked out so well that the law firm now counts three managers and a total of eight associates who negotiate short sales.
Many real estate agents, while they may be capable negotiates regarding the sale of the home, they aren’t always the right ones to understand what banks are looking for in approving a short sale offer and negotiating tricky contributions and deficiency and lien issues. That’s out job. That’s what we do.
This is particularly important if there is a 2nd mortgage (“2nd”) involved – the 2nd may demand a contribution which needs to be negotiated and shown on the HUD. Same goes with mortgage insurance (“MI”) companies, says Kayser. MI’s can kill a deal and often do, unless negotiated properly.
Contract language can be confusing and ambiguous. Approval letters need to be interpreted as to deficiencies and negotiated, so the Seller closes on the deal with “eyes wide open”. There are many legal documents and ramifications for signing these. Kayser helps their clients sort through the maze of questions that come up regarding these documents, issues regarding contributions, MI’s promissory notes, and deficiencies.
Our short sale law firm accelerates the process to complete a short sale in many ways. If 80% of the listing agent’s time is dealing with the bank and 20% is dealing with the marketing and selling of the property, which is backwards for the agent. Kayser will take the 80% from you and place you in the best position to get your deals closed. An agent markets and sells real estate. If they now have to quadruple their hours in order to get a short sale done, that’s not an efficient use of their time. Many agents using Kayser have multiple short-sale deals pending. They were able to ramp up their short sale listings exponentially and substantially increase their business.
Kayser sees a lot of last-minute business from agents who are involved in a short sale but find a foreclosure sale date looming and can’t get it stopped. Dealing with banks to get a sale date stopped is not easy. It is not a quick phone call – it’s calling day after day. This is one of the many areas where the team at Kayser excels. Kayser doesn’t stop with the banks; they go right to the foreclosure attorneys here in St. Louis to get the job done. In sum, they use every tool they have and are tenacious at getting these foreclosures stopped. Many lenders also cut the commission to 5%, but kayser negotiates this back up to 6% in many deals. Kayser also knows when the loan fits a certain profile where the lender is mandated to pay 6% and Kayser will remind them of this mandate, thus protecting the real estate agent.
It is quite common for the lender to pay all of Kayser’s legal fees out of the sale proceeds. Our fees go right on the HUD. The bank accepts, counters, or rejects. Kayser then advocares for these fees to be paid just like the agents’ commissions, very often resulting in full fees and 6% commissions.