Yet another reason to get legal advice. One of the main reasons to do a short sale is to get a release of personal liability, yet not every seller is released. Some loans carry a personal guarantee in some states. Some hard-money loans in certain states allow for deficiencies. Absence of verbiage pertaining to a deficiency in an approval letter doesn't necessarily mean the seller is released
According to FICO, the biggest hit to your credit rating seems to be when there is a deficiency remaining. With a deficiency, the affect on credit for a short sale is almost identical to that of a foreclosure.
Without, it's less. Lenders typically report a short sale on your credit report as "paid in full for less than agreed," but there are other reporting options.
You do a short sale with two loans the same way as a short sale with 3 loans and / or a bunch of liens. Individually negotiate. Typically, the lender in first position will allocate a small percentage of proceeds to junior lienholders. However, borrowers can also be asked to make a seller contribution.
If you have assets to shelter, disposable income, and are facing personal liability for a loan, those are 3 excellent reasons to hire a lawyer to do a short sale.
Whether you need a lawyer to negotiate on your behalf depends on the complexity and particulars of your situation. It is always a good idea to seek legal advice if you are unsure.
Simply stated, Probate is a court supervised (legal) process to administer a Will. Probate is a process for assembling assets and paying debts. Probate allows the transfer of a deceased person’s assets to the decedent’s Heirs. This includes administering the Estate of someone who died Intestate, or without a Will. Probate takes place in the county where the decedent resided at the time of death.
If someone dies with a Will, they are said to have died Testate. A Will typically names an Executor. The Executor “executes” the terms of the Will fulfilling the wishes and desires of the deceased person. The terms of the Will are validated as part of the Probate process.
If someone dies without a will, they are said to have died intestate. Without a Will, someone, typically a family member, or close friend, will need to Petition the Probate Court to be appointed Administrator of the Estate. Once appointed by the Probate Court, the Administrator’s role is to liquidate the Estate under the court’s supervision.
An Administrator is a person appointed by the Probate Court to administer the Estate of a person who died intestate, or without a Will. An administrator is also appointed by the Probate Court when a Will does not name an Executor, or if the person named as Executor in the Will is unwilling or unable to serve. An Executor is typically named in a Will and is appointed by the Probate Court to execute the terms of the decedent’s Will. The Administrator and Executor are commonly referred to as the Personal Representative, or PR.
The IAEA allows the Personal Representative to administer most aspects of a decedent’s Estate without court supervision. The authority to act under IAEA may be given by the Will or the Personal Representative may Petition the Probate Court for such authority. It is typically requested on the Petition to initiate Probate.
The Probate Process starts when a petition is filed with the probate court. Either the Executor named in the Will, or usually a family member if there isn’t a Will, petitions the court to be appointed Executor or Administrator. Although a probate attorney is not required to start the probate process in California, most people do hire a probate attorney.
Probate is the court-supervised administration of a decedent’s estate. The probate proceeding involves “proving the will” (if there is a will), appointing the personal representative, determining the decedent’s assets that are subject to probate, paying outstanding debts and disbursing funds to the beneficiaries. In some cases, the decedent’s estate includes real property that must be sold under the court’s supervision.
If a probate property is a Trust Sale or if the Executor/Administrator of the estate has been granted “full independent powers” under the Independent Administration of Estates Act (IAEA), the sale may not require court confirmation.
If the Administrator has full independent powers, he or she may elect to list the property for sale. Once an offer is accepted, the estate’s attorney mails out a Notice of Proposed Action stating the terms of the proposed sale to all the heirs. The heirs then have 15 days to object to the sale. If there is no objection within 15 days, the sale goes through without any court hearing required. (Regardless of the details of the probate transaction, sellers are strongly encouraged to work with a professional probate attorney to protect the estate’s best interests.)
A Property Profile is a report that provides details on a specific property. It contains information such as square footage, number of bedrooms and bathrooms, lot size, zoning information, use code, tax information and ownership information. Additionally, the profile has the recorded documents, such as the grant deed, quitclaim deed and copies of deeds of trust. The report can also contain sales comparable, school information and neighborhood information. A complete, current property profile is essential for setting the price of the real property and for determining problems that may interfere with the sale.
Your agent should be able to recommend a number of qualified specialists to help you prepare the property for sale, including removing belongings and obtaining professional cleaning. Your agent should also assist you in conducting an inventory of the real property for sale and in preparing a comprehensive property profile.
Your agent should provide you with detailed market data, called a Market Value Analysis. This includes the selling prices of similar properties in the neighboring area. It will also include in-depth information on recent sales in the area, such as price per square foot and the number of days the property was on the market. Taking into consideration the information in the analysis as well as other intangibles of the market, your agent will be able to help you determine a listing price that is appropriate for the market and will attract the greatest number of qualified buyers.
Your agent should pursue a number of strategies to expose your property to likely buyers. They include signage on the property, newspaper and internet advertising, direct mail, open houses for agents and the public and personal networking among successful agents who may represent qualified buyers. Your agent will conduct showings for interested buyers and their agents, will answer questions about the property and will continue to promote the property in order to secure the highest offer. Your agent should also communicate with neighbors in the immediate area, keeping them informed about the price and other details about the property. Ask your real estate agent for a written marketing plan and for explanations of how various types of marketing will benefit the sale.
Yes. In most real estate transactions, the seller is required to disclose information about the property, including defects, construction conducted without a permit, evidence of pest or water damage, etc. Because sellers of real property through probate, trust or conservatorship may never have lived in the property that’s being sold, special disclosure forms take this into account. Probate and trust sales require special disclosures, listing agreements and purchase contracts. In California, the California Association of Realtors has standardized forms specifically for probate transactions.
The minimum first overbid price is set by a statute in the Probate Code. Calculating the overbid assumes that there is an accepted offer on the property. The minimum overbid amount is 10% of the first $10,000 plus 5% of the balance of the accepted offer. The overbid must be presented in person by cashier’s check (no personal checks). If a property is highly desirable, there may be more than one overbidder. In that case, an overbid above the minimum would be to the advantage of the potential buyer. Here’s an example of how the overbid and deposit amount are determined:
EXAMPLE: A property is listed at $200,000. The accepted offer is $175,000. The minimum overbid is calculated as follows: Accepted offer = $175,000 +.10 x $10,000 = $1,000 + .05 x $165,000 = $8,250 Minimum overbid = $184,250 x .10 = $18,425 amount of cashier’s check
You are free to choose any real estate agent you like, but it is important to remember that probate real estate sales are complicated legal matters. Most real estate agents are not experienced or well-versed in the probate process. It makes sense to choose an agent who specializes in probate and trust real estate, and who understands the intricacies of pricing, marketing and presenting such properties. Your agent will represent your interests throughout the transaction; being able to understand and explain the process is essential.