Dear Real Estate Colleague:
Have you ever turned down a listing opportunity because it involved a short sale? Have you taken a short sale listing and tried to negotiate the short sale yourself, taking valuable time away from other selling activities? Have you outsourced your short sale negotiation to a third-party short sale negotiator, paying them thousands of dollars out of your commissions?
It is possible to have a short sale negotiated by an attorney and have the seller's lender pay the full negotiation fee, leaving you with your full commission. An attorney can negotiate a fee with the lender in a short sale and the lender will usually pay the legal fee. However, only an attorney can negotiate this fee. A real estate agent or third-party non-attorney negotiator cannot charge this fee to the lender.
Should you be using an attorney to negotiate your short sales? If a real estate agent or another third party negotiates a short sale, they may be practicing law without a license according to Washington State law. The Washington State Supreme Court adopted General Rule (GR) 24 in 2001, defining the practice of law, which includes negotiation of legal rights or responsibilities on behalf of another entity or person(s). Anyone negotiating with the borrower’s lender on their behalf is negotiating the legal rights and responsibilities on the borrower’s original loan agreement with the bank, which would fall under the Supreme Court definition of the practice of law.
If you use a third-party short sale service to negotiate short sales on behalf of your clients, under the same rules, the third-party short sale service would need to use negotiators that are licensed to practice law (i.e. attorneys). Can any attorney negotiate a short sale? Don't assume you can just use any attorney to negotiate your short sales. An attorney who doesn't have adequate short sale experience could cause your short sales to fail, leaving you with lost commissions and upset clients. A license to practice law alone doesn't guarantee that a short sale will be handled properly.
Our short sale attorney is not only licensed to practice law. He is also a licensed real estate broker and an escrow attorney. His law firm has over 100 active short sales in progress at any time. So why would we be giving you this information? If we can't receive any kind of finder's fee from a law firm for referring business to them, what do we have to gain?
First, we're building a network of real estate agents that we can refer business to and vice-versa. Some short sale listings may be in areas that are outside where we prefer to work or may be a type of property that we don't specialize in, and we know that you may run into similar situations. If we're going to refer a short sale listing to another agent, we want to be assured that the short sale will be handled properly. We know that the law firm we use will handle the short sale properly.
Second, every short sale that the law firm handles builds more experience with a particular lender--their policies, loss mitigation rules, loan products, timelines, and relationships with the bank negotiators. As the law firm negotiates more short sales, we benefit on our own short sales from the additional experience gained from work with different lenders. Why wait? Take action now! Stop fearing short sales. Gain more listings. Keep more of your commission. Show prospects that you're better qualified to represent them, because you'll have their short sale professionally negotiated by an experienced attorney.
Contact us now for more information and to jump-start your short sale business.
Additional Resources:
Is Your Real Estate Agent Breaking The Law?
Unlicensed Third-Party Short Sale Negotiators - Washington Department of Licensing's Official Stance |