A short sale is the sale of property at a price that provides net proceeds to the lender in an amount less than what is owed to them. The difference in what is owed to the bank and their net proceeds from the sale is referred to as the deficiency balance. Sometimes lenders will forgive the deficiency balance or a portion of the balance. Depending on the sellers’ ability to pay, the lender might require a cash contribution at closing. Other times they will expect to settle the remaining debt after the short sale closes.
Frequently Asked Questions
Our on-staff attorney and professionals, involved in tens of thousands of real estate transactions, will be happy to assist you with any questions that may arise during your closing process.
• Standard Coverage addresses such risks as: forgery and impersonation; lack of competency, capacity, or legal authority of a party; deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner); undisclosed (but recorded) prior mortgage or lien; undisclosed (but recorded) easement or use restriction; erroneous or inadequate legal descriptions; lack of a right of access; and deed not properly recorded.
• First American's Eagle Policy covers all of the above risks plus: off-record matters, such as claims for adverse possession or prescriptive easement; deed to land with buildings encroaching on land of another incorrect survey; silent (off-record) liens, such as mechanic's or estate tax liens; pre-existing violations of subdivision laws, zoning ordinances or CC&R's (Covenants, Conditions & Restrictions); post-policy forgery; forced removal of improvements due to lack of building permit; post-policy construction of improvements by a neighbor onto insured land; and location and dimensions of insured land (survey not required).
The lender's policy covers only the amount of its loan, which is usually not the full property value. In the event of an adverse claim, the lender would ordinarily not be concerned unless its loan became non-performing and the claim threatened the lender's ability to foreclose and recover its principal and interest. And in the event of a claim, there is no provision for payment of legal expenses for an uninsured party. When a loan policy is being issued, the small additional expense of an owner's policy is a bargain.
Not at all. At the mere hint of a claim adverse to your title, you should contact your title insurer or the agent who issued your policy. Title insurance includes coverage for legal expenses that may be necessary to investigate, litigate, or settle an adverse claim.
The cost varies, depending mainly on the value of your property. The important thing to remember is that you only pay once, then the coverage continues in effect for so long as you have an interest in covered property. If you should die, the coverage automatically continues for the benefit of your heirs. If you sell your property, giving warranties of title to your buyer, your coverage continues. Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from you, your coverage continues to protect your security interest in the property.
This is a summary of the financial portion of the real estate transaction. The title company or closing agent is required by the Department of Housing & Urban Development to use the HUD-1 on virtually all one-family to four-family residential real estate transactions involving a lender. The statement will list the purchase price, loan amount, closing costs for the buyer and seller, and will show all sums being charged and disbursed to the parties involved. It also clearly summarizes the total amount due from the purchaser.
Yes. There are some "hidden hazards" that even the most diligent title search may not reveal. For instance, a previous owner could have incorrectly stated his marital status resulting in a possible claim by his legal spouse. Other hidden hazards include fraud, forgery, defective deeds, mental incompetence, confusion due to similar or identical names, and clerical errors in the City/County land records. These defects can arise after you've purchased your home and can jeopardize your right to ownership in part or full.
A title search can show any number of title defects, liens, and other encumbrances and restrictions. Among these are unpaid taxes, unsatisfied mortgages, judgments against buyers/sellers and any restrictions or conditions limiting the use of the land.
A title search is a thorough review or examination of the public records that pertain to real property ownership and the rights/limitations of its use. The search period begins with the current owner(s) and extends back in time for a period of 60 years (commonly referred to as the "chain of title"). All documents affecting the subject property are reviewed for accuracy, completeness and proper execution. Similarly, all owners of record during the search period are indexed to determine their ownership interests, marital status and legal and mental capacity to enter into a contract to sell/buy real property. All conveyances must have been properly conducted and approved by the appropriate governmental departments.
When you buy a home--or any property for that matter--you expect to enjoy certain benefits from ownership...to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights. Without an owner's title insurance policy, you may not be fully protected against errors in the public records, hidden defects not disclosed by the public records, or mistakes made during the examination of the title of your new property. As a result, you may be held fully accountable for any liens, judgments or claims brought against your new property. However, your owner's title policy insures that if such an occasion arises, you will be defended, free of charge against all covered claims and paid up to the amount of the policy to settle valid claims.
It is an insurance policy that protects the insured against loss should the condition of title to the land be other than as insured. Unlike other types of insurance that offer protection against future possible occurrences, title insurance offers protection against past occurrences which could result in a claim at a future date. Coverage continues in effect for so long as you have an interest in the covered property. If you should die, the coverage automatically continues for the benefit of your heirs. If you sell your property, giving warranties of title to your buyer, your coverage continues. Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from you, your coverage continues to protect your security interest in the property. Title insurance provides the insured with "peace of mind" in knowing that you are receiving good and meritable title to the real estate you are purchasing.
Call McNeese Law Firm at 850-337-4200! We will be happy to provide you with an overview of the process and answer any questions specific to your situation and to your lender. In addition, we always recommend that our clients consult with their tax adviser concerning any tax implications prior to beginning the short sale process.
McNeese Law Firm gets paid at closing by the short sale lender. There are only two instances under which Attorney Richard McNeese reserves the right to bill a client (seller) directly for short sale services: 1) If the seller fails to submit lender-requested documents in a timely manner thus causing delay or a decline of the short sale, or 2) If McNeese Law Firm gains short sale approval in terms that the seller can agree with and the seller decides not to go through with the short sale closing.
First and foremost, McNeese Law Firm is retained by the seller. Our goal is to negotiate a short sale approval that best fits the seller’s financial position and intentions. We work closely with our in-house closing agents at McNeese Title, LLC, to present timely and accurate HUD-1 Settlement Statements to the lender throughout the short sale process. We also depend heavily on our team of Listing and Selling Agents to gather all the information needed to present the offer to the lender. Once the offer documents have been submitted to the short sale lender, McNeese Law Firm provides weekly updates to the client, Listing Agent and Selling Agent. When short sale approval is granted, Attorney Richard McNeese and staff carefully review the terms of settlement set forth by the lender.