I am still amazed at the number of REALTORS® that continue to list short sales and either attempt to process the short sale themselves and/or turn the file over to a third party title company. In many of these instances I have noticed the title company charging “short-sale processing fees” at closing in direct violation of the law. In fact, such a charge may be considered a felony as it violates Florida Chapter 494.
Federal and Florida laws involving short sales and their processing have continued to evolve over the past 2 years. Attorneys are now a most necessary and intricate player in the short sale process.
Florida Sellers be aware that it is unlawful for anyone other than a Florida admitted attorney to charge a fee in order to process a short sale. Real estate professionals and/or title companies are NOT permitted to charge any additional fees relating to the short sale and/or its’ processing. Only standard commissions and/or fees are deemed permitted.
Many title companies are attorney owned. However, such ownership does not make it lawful for that title company to charge a short sale processing fee. Title companies do not provide legal representation. Most typically, the title company’s attorney owner also does not provide legal representation to either the Seller or Buyer; their representation is typically considered transactional.
In the typical short sale all Sellers should consult with a competent attorney familiar with the short sale process and possible long term financial consequences. The short sale negotiations with the lender(s) should be handled exclusively by the attorney providing the Seller with legal representation. Such representation will typically be detailed in a representation agreement between the Seller and their attorney.
Our company routinely requires any and all short sale Sellers to consult with an attorney. Typically, we introduce the Sellers with a specific attorney that processes almost 100% of our short sale listings. This attorney has extensive short sale experience along with substantial real estate, litigation and bankruptcy experience. This provides for the best combination of professionalism and compliance with the law. Furthermore, our short sales are processed much more efficiently and to the benefit of all concerned parties.
I am not an attorney and this blog is not intended to provide legal advice. Quite to the contrary, my advice as a real estate professional and recognized expert is that all Short Sale Sellers should engage the services of an attorney to process their short sale negotiations. Do not reply on the REALTOR® and/or a title company to provide such important legal representation.
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