How a Lawyer Can Help with a Short Sale

 Posted on October 31, 2024 in Real Estate Law

In times of financial hardship, you may be forced to make a hard call about your mortgage and real estate prospects. If you are facing the risk of foreclosure, a short sale may be the only option to recoup your losses and walk away with some of your credit intact. However, negotiating with the mortgage lender by yourself can leave you at a disadvantage if you are unsure of your rights. A real estate lawyer can give you a voice in a short sale, ensuring that you are financially equipped to transition into another home.

Understanding Foreclosure in Connecticut

If your financial situation can no longer accommodate a mortgage, you may be faced with foreclosure. In Connecticut, there are two distinct types of foreclosure that can be ordered by a judge: strict foreclosure and foreclosure by sale. A strict foreclosure gives you a hard deadline to pay off any debts on the mortgage, referred to as Law Day. If you fail to pay off the debt by Law Day, ownership of the property is turned over to the lender. 

By contrast, a foreclosure by sale has a deadline to pay off debts before the house will be auctioned off, known as a Sale Date. A foreclosure by sale can be preferential if you believe there is value in the house; any money made by the sale of the property will go towards your debts, but the remaining balance will be yours.

Why a Short Sale May be Preferable

A short sale refers to selling a real estate property at less than the market value. To become eligible for this option, you typically have to submit proof of your financial hardships to the court, with approval from the lender. You will also need to secure a buyer before the lender can approve a short sale.

The main benefit of a short sale is simply that it is an alternative to foreclosure. A foreclosure can significantly damage your credit score, and making a short sale on your property can lessen some of that damage. Additionally, a short sale can potentially get you off the hook for mortgage debts; in a foreclosure, you can still be held liable for missed mortgage payments in a court-ordered deficiency judgment.

How a Real Estate Lawyer Can Help

As previously mentioned, initiating a short sale requires approval from the mortgage lender or bank, who may not be immediately willing to agree. A real estate attorney can represent you in negotiations, gather all relevant documents, and draft a comprehensive contract for the sale of the property. Furthermore, a real estate lawyer will be able to portray your financial situation in a sympathetic light to the lender and make a compelling case to avoid foreclosure.

Contact a Fairfield County, CT Real Estate Attorney

A foreclosure on your home can set you back for years, leaving you in a financial hole that you might struggle to climb out of. The Stamford, CT real estate lawyer at Law Offices of Daniel P. Weiner will fight on your behalf, combining shrewd legal knowledge with decades of experience to secure favorable outcomes. For a free consultation, call his office at 203-348-5846.