What You Should Know About a Short Sale

short sale, Wheaton real estate attorneysWhile the economy has steadily improved over the course of the last decade or so, things are still not where they should be in many respects. As people experience financial hardships, some are forced to sell off assets, houses included—often for less than they are worth. This is referred to in real estate as a short sale, and it can be quite complex to navigate through on your own.

Short Sale Requirements

Many people are vastly unaware as to how complex a short sale can be, but it can be because there are not only questions regarding the nature of the asset for sale, but also the remainder of the debt or loan that is not being resolved by the short sale. Short sales are only successful if everyone involved (the seller, the bank or other entity holding the loan, and anyone else) agrees to take less money than they might otherwise make. However, a lender does not actually have to agree to a short sale in order for one to go forward, at least in Illinois; only the mortgage holder must agree, and the two are not always the same.

There are four items generally required in order to complete a short sale and obtain the mortgage lender’s permission. They are:

  1. A hardship letter, with an explanation of why the mortgage is in default;
  2. Proof that the property’s current value is less than the cost of the mortgage and closing costs;
  3. A showing that a buyer for the property exists, and that buyer is not related to the seller; and
  4. Credible testimony that there is no better alternative.

The third item can be a concern in particular, as it is not unknown to simply transfer an asset to a friend or family member as a sort of surreptitious trust; such actions are illegal under the Illinois Fraudulent Transfer Act. These factors all being met do not necessarily guarantee a successful short sale, but they greatly increase the odds that all involved will be able to come to a consensus.

After a Short Sale

Assuming the sale itself goes according to plan, you will still be left with the question of the remaining balance on the mortgage. In Illinois, this may be disposed of in two ways. The lender will either forgive the debt—usually not out of a sense of altruism, but rather because it is possible for them to write it off—or they will try to seek a deficiency judgment. A deficiency judgment is just what it sounds like, where the lender files a civil suit in order in an attempt to collect the remaining balance due on the mortgage.

In a short sale, it is possible to insert language into the offer letter agreeing to waive any remaining liability, but unlike some other states, such as California, this is not required. If a deficiency judgment is entered against you, your wages may be garnished, your bank account may be levied (frozen) and in extreme cases, you may have assets or other financial instruments seized to make up the difference.

Contact a Wheaton Real Estate Attorney

Real estate can be an extraordinarily complex area of law, and a short sale can be one of the most intricate and difficult enterprises to undertake, especially alone. Contact an experienced DuPage County real estate lawyer at Stock, Carlson, Oldfield & McGrath LLC today. Our knowledgeable professionals can help guide you through the short sale process, and answer any questions you may have along the way.

Sources:

http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2055&ChapterID=57

https://www.irs.gov/taxtopics/tc453.html

Why Hire an Attorney When Buying or Selling Residential Property?

Illinois real estate lawyersAs a consumer, you make hundreds – if not thousands – of purchases each year. Some are small and require nothing more than your debit card, credit card, or cash payment. Others, such as the purchase and sale of residential property, require a larger investment. Learn how the aid of an experienced real estate attorney can protect that investment while also decreasing the chances of costly or unexpected delays and challenges along the way.

Practicing Your Due Diligence

Anyone that has ever purchased a used car knows that there is always a risk of purchasing a "lemon" – a vehicle that never seems to run properly and always needs repairs. Sadly, not everyone knows that this can happen with houses, too. A home with the gorgeous wainscoting could be hiding mold or fire damage underneath. Structures that do not give much access to the crawl space could have more foundation issues than originally thought. Due diligence, performed with the aid of an attorney, can reduce the risk of these costly and unexpected problems.

Avoid Vague and Unclear Contract Terms

Real estate contracts are long, complex, and potentially confusing documents that few individuals have the knowledge to decipher. Instead, they usually find out too late that they are responsible for more of the closing costs than anticipated, or that the real estate agent has added commission fees to the contract. Avoid such issues by ensuring you have an experienced real estate attorney on your side, long before you ever sign a single document.

Negotiate a Better Deal in the Purchase Agreement

The purchase agreement is one of the single most important documents in a residential real estate transaction, and not understanding it can cost you dearly. For example, it may be listed that the home was altered, but it may not have been done lawfully. If you do not know this before signing the purchase agreement, you could become subject to fees and fines, imposed by your county, city, or state, for the continued use of unlawfully built or zoned structures. Additionally, you would be responsible for the demolition or correction of the structure in question.

Contact Our DuPage County Real Estate Lawyers

Regardless of whether you are purchasing or selling residential real estate, contact Stock, Carlson, Oldfield & McGrath, LLC. Dedicated and experienced, our seasoned DuPage County real estate lawyers can protect your real estate investment. Call 630-665-2500 and schedule your personalized consultation to get started today.

Source:

https://www.investopedia.com/articles/mortgages-real-estate/08/real-estate-attorney.asp

Experts Release Predictions for Chicago's Housing Market in 2017

Illinois real estate lawyersBuyers, sellers, and investors alike have been watching the Chicago housing market with bated breath. An area that has stalled in comparison to other major cities throughout the country, it has been a market where many homeowners are underwater, investors fear serious loss, and buyers wonder if buying in a stagnant market is truly the smart choice. Certainly, the market has belonged to buyers for some time, but many recognize that life changes and, should they want to sell later on down the road, they may be out of luck. Thankfully, it looks like at least some areas may be looking at an appreciation, and that could be a positive thing for anyone looking to buy, purchase, or invest in real estate in the area.

Most Homes Continue to Fall Behind Their 2006 Value

Throughout much of the country, homes have reached their pre-crash value in 2006. Others, such as Seattle, have not only hit their pre-crash value, they have hit all-new highs. Yet most homes in the Chicago area remain at about 19 percent below their original market value. Further, experts predict it will take at least another year for the market to hit its 2006 benchmark.

Some Areas Are Seeing Higher Than Normal Growth

Despite having the weakest housing market in the country's top 100 major cities, there are specific neighborhoods in Chicago that are seeing higher than normal growth. For example, the North Side has remained fairly stable over the years and homes in the area are now about 3 percent above their original peak. The Loop, West Loop, and Fulton Market areas have also been performing well and are expected to continue appreciating. Granted, these areas are not expected to appreciate greatly in the next year, but they continue to be a safe investment.

There are some areas that seem to be primed for a sharp appreciation, however. Bridgeport/Brighton Park and Humboldt/Garfield Park are just two prime examples. the areas, though still 48 percent below their 2006 peak, have had double digit increases in the past year and are expected to make yet another sharp increase in the next one.

This could make these areas prime opportunities for high-risk investors willing to slowly increase rental properties over the next few years. It could also be a great place for buyers who are looking to purchase a home that will have a higher value in a few years. Those that have been waiting to sell because of significant losses could potentially take advantage of the sharp appreciation, or they could continue to wait it out for a better market.

Get Legal Advice Before Making a Decision

While the market is recovering and set to appreciate in some areas, buyers, sellers, and investors should never make a final decision until they have had the guidance and assistance of an experienced attorney. This can protect their interests, and their financial futures. Stock, Carlson, Oldfield & McGrath, LLC have you covered. Schedule a consultation with our DuPage County real estate attorneys by calling 630-65-2500 today.

Source:

http://www.chicagotribune.com/business/ct-chicago-housing-forecast-0104-biz-20161230-story.html