Real Estate FAQs
Do I need an attorney to buy or sell a home “by owner”?
When selling a home, a realtor normally helps you market the property and negotiate a contract. If you are willing to market the property yourself, an attorney can help you negotiate the contract and walk you through the closing for a fee that is usually much less than a realtor’s commission. In addition, an attorney may help you properly disclose any defects in your home to a potential buyer to help avoid future liability from the property.
When buying a home, an attorney can assist in making sure the buyer completes the inspection process for both the house and the property, in order to uncover any potential hidden defects or title problems. In addition, an attorney will review the mortgage documents prior to closing to make sure the terms of the loan you are promised is adequately reflected by the loan documents.
Should I consolidate high interest debts into a lower interest rate second mortgage if I am having financial problems?
You should consult an attorney before entering into a consolidation loan. While consolidation loans usually lower the monthly payment amount in the short term, the amount of interest paid long term can be substantially more. In most cases, any equity you have in your homestead is exempt from creditors' claims. If the underlying cause for the financial problems has not been resolved, some homeowners find they are forced to file bankruptcy at a later date, only to find out they could have avoided attaching the consolidated debt to their homestead.
What are my options if I have been served with a foreclosure?
If you have any defense to the foreclosure action, or any counterclaims to bring against the mortgage company, you must file a response within 20 days of being served. Even if you do not know whether you have a defense, you should contact an attorney to make sure the mortgage company has done everything required of them to enforce the loan. An uncontested foreclosure takes approximately 3-4 months to complete. This time period may be significantly lengthened during a contested foreclosure, depending on the nature of the defenses and/or counterclaims. There are a number of ways to prevent foreclosure prior to the foreclosure sale, including negotiating a repayment plan or loan modification, or filing for bankruptcy.
What is the difference between a repayment plan and a loan modification?
A repayment plan usually allows a borrower to catch up delinquent mortgage payments by making the regular payment plus an additional amount each month to go towards catching up the delinquent payments. The regular monthly payment amount, the interest rate and the length of the loan are usually not adjusted, and the mortgage company may or may not continue with legal action during a repayment plan.
A loan modification usually includes an adjustment to the regular monthly payment amount, by either modifying the interest rate or adjusting the length of the loan, or both. Most loan modifications will add the amount owed for delinquent payments to the balance of the loan, to be repaid over the life of the loan, so there is no “catch up” payment to make in addition to the regular monthly mortgage payment.
For further information on Loan Modification, please click here.
What is a short sale?
A short sale is a transaction in which a borrower who has suffered a hardship approaches the Lender and requests that the Lender allow the sale of the home for an amount less than what is owed on the mortgage. In a short sale, the Lender saves the time, effort and expense of foreclosure and re-marketing the property. The borrower finds an appropriate buyer, offering market price for the real estate, and agrees to devote the net proceeds from the sale of the property towards paying off the mortgage debt. Critical in processing short sales is determining and negotiating whether the borrower is going to be relieved of any remaining liability for the short fall between the sale of the property and the amount that was owed on the loan, i.e. a waiver of deficiency. There are also tax concerns to be addressed with a CPA prior to entering into a short sale. Many people who have consummated a short sale are surprised to find out later that the assistance they received with their short sale did not include waiver of deficiency and only released the lien on the property. That is why it is important that you use an experienced attorney to make sure that your legal rights are protected.