Section 1 Part 1 The Attorney

There are several important pieces to the short sale puzzle. The first piece for any investor is to establish their team. Once the investor lands a short-sale client, he needs to rely on his team to help to get the transaction across the finish line.

First on the list, is an attorney. And not just any attorney mind you.

Your attorney needs to have as many of the below-listed characteristics as possible. In my opinion, these traits are listed below in their order of importance.

• Owns a title company
• Has short sale knowledge/experience
• Can make effective arguments regarding consumer protection and foreclosure defense
• Has a member of his staff available to serve as a short-sale processor?

Attorney

 A sometimes-overlooked feature of successful short sale transactions is the presence of an attorney. The attorney should have some experience with foreclosure defense work. Because if the deal starts to appear it mike be going off the rails, a well-written attorney letter has a better than average chance to bring things back under control.

Who hires the attorney?

In my experience, I find that it’s usually better if the property owner hires the attorney. This way the lender knows that the owner is represented and will generally conduct themselves accordingly.

I’ll make the introduction, but it’s much more effective if the owner is the attorneys' client. Additionally, I prefer to refer foreclosure defense attorneys that also own title companies.

How is the attorney paid?

If the attorney owns a title company, as well as a law practice, they’re guaranteed a payday from the closing (if one occurs).

Additionally, from the 100’s short sales in which I’ve participated, over 80% of the lenders allow for an additional attorney fee to be charged to the file. Funny, once the attorney is approved for a fee, the lender rarely eats into it. (The same cannot be said of real estate commissions.)

It’s important to every attorney that they get paid for their time. However, your client / his client, (the homeowner) doesn’t have any available cash. The moral of this story is hopefully the attorney will recognize the value in having your business and might look the other way instead of demanding a retainer.

Sure, they’ll be paid for their services as a closing agent as well as their representation of the homeowner during the short sale. But only 25% of all short sales close. Hopefully, this training will give you a clearer sense of how to measure potential short opportunities. It’ll be hard, but maybe you won’t open a file just because a homeowner agrees to move forward.

On a side note. What should you do if a homeowner wants to make a short sale application and either the property or the homeowner doesn’t meet the qualifications set by the industry for short sales?

One of the main concerns of the attorney is to defend the homeowner against the lender's attempt to simply release the lien versus satisfying the mortgage. If the lender merely releases the lien, it affects only the property. Leaving the homeowner vulnerable to any additional judgments or debt left behind by the mortgage note.

You need an attorney. Your clients/ homeowners need an attorney. Just make sure you get one hired.

The next member of your team is a real estate agent/broker.