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Short Sales of Real Estate

What Is Asset Protection And How Does It Work In A Short Sale Transaction?

In a short sale, a property is sold when a seller has negative equity in the transaction. We can help clients negotiate with their lender/bank the payoff or waiver of the deficiency balance on the loan thereby protecting the client’s current assets and avoid a future collection by a creditor.

At CFlegal, PC., our attorneys can assist you with protecting your assets and as part of that protection, assisting in the negotiations with your lender regarding the sale of real estate. Call us at (810) 292-3115 today to discuss your case with a member of our firm.

Real Estate Short Sale Example

With short sales, a buyer would purchase the property from the lender directly at a discount on the mortgage, in order for the lender to avoid possible foreclosure proceedings or bankruptcy. For example, let's say we have a homeowner with an existing mortgage of $260,000.

  • Net Sales Price: $250,000.00
  • Mortgage Loan 1: $260,000.00
  • Mortgage Loan 2: $40,000.00
  • Closing Costs: $20,000.00

We can negotiate with lender #1 to discharge its mortgage for receipt of a certain sum with a waiver the $10,000.00 deficiency balance. The Lender for Mortgage #1 will usually pay a nominal sum to Lender #2 to discharge its Mortgage #2. The deficiency on Mortgage #2 then has to be negotiated or if not negotiated it is open for a collection against you, if not charged off by the creditor.

If you do not have an attorney, you may not understand the complex legalities of this transaction. You can be sued years after the short sale is completed on the deficiency balance by a collection agency. It may cause you to file a bankruptcy to protect yourself.

You may be liable to the IRS for the waiver of the debt. Your realtor may not understand what a deficiency is and the realtor will get paid a discounted rate whether you negotiate the deficiency or not. Further, the bank may commence with the foreclosure sale if you do not retain an attorney to have the foreclosure sale adjourned, allowing you time to find a buyer and complete a short sale.

Examples Of Satisfied Clients

  • Represented a client in Oakland County on a short sale and obtain a waiver in full of a loan deficiency of $140,000.00. The client never defaulted on the mortgage and protected a foreclosure on his credit report and avoided a potential chapter 13 bankruptcy. The client had moved to a new home in a different state before selling a second home via a short sale.
  • Represented a client in Genesee County needing to negotiate a payoff for a second mortgage company that was commencing with collection proceedings after foreclosure of the first mortgage. Saved client $30,000.00 of debt and avoided bankruptcy.
  • Represented a client who obtained a waiver in full of $300,000.00 on its first mortgage on a short-sale transaction and discharge of the second mortgage lien.
  • Represented clients facing commercial foreclosure and successfully negotiated a deed in lieu of foreclosure and negotiated a reduced loan to avoid a potential bankruptcy with a savings of over $100,000.00.
  • Received referrals from realtors and title companies assisting their clients in negotiating with their lenders to assist in facilitating a quicker short sale transaction as it is in the best interest of all parties to short sale transactions that the debtor/seller be represented.

Let CFlegal, PC. help you protect your assets and future livelihood in a short sale real estate transaction. Call us at (810) 292-3115 today.

Every Case Deserves Individual Attention Recent Reviews From Clients

  • You made all the difference!

    “I so much want to thank CFlegal, PC. for their help. I needed professional representation to help me with a difficult situation. They were very approachable and listened to my case. With their help my case was dismissed. What a relief. Thank you all for your help. You made all the difference!”


  • CFlegal, PC. are very knowledgeable and efficient!

    “I was the previous owner/manager of Quality Rental Management, LLC, a residential property management company and, as such, used the services of CFlegal, PC. to handle my landlord/tenant matters including appearances for non-payment of rent, termination of tenancy matters, as well as procuring Orders of Eviction and coordinating the removal of hold-over tenants. Since selling my interest in Quality Rental Management, LLC, I have continued to use the law firm of CFlegal, PC. as my attorney for other business and personal needs including evictions. I have found the staff of CFlegal, PC. to be knowledgeable and efficient with regard to the execution of these matters and I will continue to use those services if necessary. Curt McIntosh is the owner at McIntosh Building, LLC.”

    Curt McIntosh

  • I have retained the law firm of CFlegal, PC. on numerous occasions & they are always efficient.

    “I have retained the law firm of CFlegal, PC. on numerous occasions over the last several years to handle my landlord/tenant evictions in the Flint area. I have found the attorneys and their staff to be efficient and knowledgeable in handling these matters on my behalf. I would not hesitate to use and/or recommend this law firm in the future.”

    John Fotenakes

  • Thanks for your efforts and hard work on my case.

    “Thanks for your efforts and hard work on my case. Also, thanks to all your staff for their professionalism. ”

    Megan Clark