It is next to impossible for any Realtor to discuss a short sale without the potential ramifications of the Unlicensed Practice of Law

It is next to impossible for any Realtor to discuss a short sale without the potential ramifications of the Unlicensed Practice of Law

Look we all know that Short Sales are pretty much the only real opportunity for a Florida real estate agent to earn a living today and until recently most had shrugged off the inherent risk that was involved.

What's your risk?

As a realtor you have an inherent conflict of interest, you get paid only if the deal goes through. I can tell you that this will factor into the coming lawsuits against the realtors when the sellers gets sued for the balance due in their notes.

As a Florida Foreclosure Defense Attorney representing hundreds upon hundreds of homeowners I've noted a current influx of potential clients all getting sued by their lenders after a short sale. Oddly enough, each of these potential clients state verbatim; "I sold my home through a short sale, everything was handled by my real estate agent who said he/she was a certified short sale specialist and that I didn't need an attorney. They assured me that the bank would never come after me."

Whether you said it or not, I can assure you that the seller will allege that you the realtor told them this couldn't happen of course you will try to deny it but I can assure you that any good litigation attorney will argue and win!

You have to remember that the second a client asks a question such as; "will I be released from the deficiency" and you answer, in any way other than to advise the seller to seek the advice of legal counsel, you are guilty of the unlicensed practice of law.

Collection letters demanding the outstanding balance due are already being sent to these sellers which solidifies what I've been saying for the past two years... there will be an onslaught of deficiency lawsuits filed against the sellers. DO NOT want to be one of those people to share in the blame and the pain?

So how do you conduct short sale business and protect yourself?

Make sure that you DO NOT allow any of your short sale transactions to close without your seller obtaining a written opinion from a licensed Florida attorney.

Remember your fiduciary duty to your clients.

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