Short Sale Process – What Should I Ask My Attorney?


The short sale process includes many steps that are not in traditional sales.  If you are considering a short sale you will need to contact financial, tax and legal professionals for qualified advice.  A real estate agent with short sale experience is typically preferable as well.  As the seller, you also need to know if your loan is a recourse or non-recourse loan. 

In a recourse loan the borrower retains personal liability for any of the deficiency after a short sale or foreclosure.  The lender reserves their right to pursue the personal assets of the borrower by obtaining a court ordered deficiency judgment.

A non-recourse, the lender is limited to whatever funds are available from its security interest in the property itself and cannot force the borrower to repay the deficiency.

The attorney can assist with the determination.  While interviewing legal professionals you can consider asking the questions below so that you have an idea of their experience and know where you stand on any payment obligation.

  • How many short sales have you done?
  • How many were successful?
  • What will I owe if we aren’t successful in getting the short sale accepted?
  • Do you charge billable hours or a flat fee?

A short sale can be preferable to foreclosure for several reasons.  It can lessen the impact to your credit, can have a less damaging effect on the community, may offer incentives for lender and seller and can allow for the home to be marketed and sold with less of a deficiency.

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