You may have seen solicitations from companies announcing “NO COST” Short Sales that can be closed quickly, sometimes as quickly as 45 days. We suggest that you use great caution when engaging these companies or recommending these companies to short sale sellers. First, there is no such thing as a free ride. In most cases, if a company states that their services are free, what they are doing is charging their fees to the seller at closing. While this practice is perfectly acceptable, the characterization of their work as “free” is at best misleading, and at worst, fraudulent. Make no mistake about it, the seller is paying fees for their work in the form of a greater deficiency balance. Most reputable firms charge the very same way, but accurately disclose their fees and how they get paid.
Second, any guarantees or representations about quick closings should also be viewed with great caution. While some lenders will approve short sales in a short period of time, most do not. Any company that makes such exaggerated claims is merely trying to get their foot in the door, so to speak. They have no more control over the process then any experienced short sale negotiation team. Worse yet, these companies may be a front for professional flippers who are merely trying to get your sellers to sell their property below market value. In doing so, the seller will face larger deficiency balances, something that is rarely, if ever explained to sellers.
We point this out to you in our ongoing efforts to make sure that you minimize the possibility of a negligent referral claim. Your decision to recommend a short sale team to your seller is an important one, and we recognize that exaggerated or misleading claims make that decision much more difficult. Please contact our office if you ever have any questions about promises or claims that seem too good to be true. They usually are.
Written by Attorney Evan N. Berlin Esq.
Posted by Karen Gagliardi, Business Development Coordinator for Berlin Patten, PLLC.