Short sales
Answers to real estate questions as appearing
in the Houston Chronicle
By george stephens, CRB, AND Charles J. "Chuck" Jacobus, JD
Dear George: Our lender offered us a short sale as an option due to the death of the primary borrower and loss of income stream. The property is FHA-insured. There is no equity due to a refinance in 2008. What are the pitfalls involved in this scenario?
Answer: It's usually a good thing if your lender suggests a short sale, provided this lender is willing to negotiate. Try and negotiate a "no deficiency" provision. Otherwise, the lender may accept a lower-than-fair-market-value price knowing that he can file a deficiency judgment against you. A deficiency judgment is the difference between the loan amount that your mortgage secures and the amount obtained at the public auction by the lender or his trustee.
Investors are not likely to offer you fair market value. Therefore, we suggest you look for a buyer who is not an investor but who intends to move into it. Have you tried selling the property yourself? Or has the property been listed for sale through the MLS? Try listing it with a REALTOR® who agrees to an exclusive agency listing. This would enable you to sell the property but owe no listing fee to your REALTOR®, provided you obtain the buyer yourself without an introduction to the property by any REALTOR®.
E-mail your question to "Ask George & Chuck" or fax it to 281/596-7591. The answers to questions in this column do not contain legal advice. If you wish to obtain legal advice, you should consult your own attorney.
George Stephens, CRB, is the broker of ERA Stephens Properties. He is licensed as a mortgage broker in Texas and a real estate broker in Texas, Georgia, and Massachusetts.
Charles J. Jacobus, JD, is board certified by the Texas Board of Legal Specialization in Residential and Commercial Real Estate Law, and the author of Texas Real Estate Law and Texas Real Estate, both published by Thomson Publishing. He also teaches at Champions School of Real Estate and Houston Community College, and is an adjunct professor at the University of Houston Law Center.
George and Chuck are co-authors of Texas
Real Estate Brokerage and Law of Agency published by Thomson Publishing.
