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Realtors Seek Lawyers’ Help in Short Sale Negotiations

Realtors and lawyers may soon be working hand in hand to complete short sales, with the process continuing to drag for many borrowers despite efforts from the government’s Home Affordable Foreclosure Alternatives program.

More and more agents are finding sense in getting legal assistance despite the costs, as banks have proved increasingly difficult to deal with. With a lawyer on their side, many found that lenders were more responsive and cooperative.

Lawyers also help realtors become more efficient by taking over negotiations with lenders, which normally take up hours of their time. Bank bureaucracy often leads agents to talk to several different officers, none of whom take up any accountability.

A number of law firms have already included short sale negotiations as part of their services. Price Law Group, a group of debt resolution specialists operating in Arizona, Nevada, California, and New York, has recently added short sale negotiators to its staff.

The company's founder, Stuart Price, said that lawyers come in handy when it comes to understanding what banks want in a short sale. Realtors may be well-versed in real estate transactions, but they aren’t always able to present a strong hardship case, he added.

Legal assistance is particularly helpful in short sales that involve a second mortgage, as the secondary lender may ask for a contribution in order to finish the transaction on time. These usually have to be negotiated, which takes up even more of the realtor’s time.

The cost of hiring a law firm hovers between $1,500 and $2,000, depending on the case specifics, particularly whether or not a second lender is involved. However, Price says the returns come quickly as lawyers can get the bank to agree to a higher agent’s commission.