We are in the lineup for this year’s Fall Conference! The program has been approved by the Appraisal Institute, and additionally approved for 7 CE hours by the New Jersey State Board of Real Estate Appraisers, the New York State Board of Real Estate Appraisers for 7 CE hours and approved by the Insurance & Banking Commission for NJ Real Estate Continuing education for 7 elective CE hours. Approved by the State of New Jersey Tax Assessor Continuing Education Board for 4 appraisal hours & 3 administrative hours. Purchase tickets on the Metro NJ Chapter website here: https://ainewjersey.org
Tag: real estate law
My Realtor is Acting as a Dual Agent – What Does That Mean and Why Should I Care?
If you are in the hunt for a house, or likewise selling your own, the topic of dual agency will (or should) come up for discussion with your agent. Most people give consent for their agent to act as a dual agent if the opportunity arises, but do you really know what that consent means?
Under New Jersey law a disclosed dual agent works for both the Buyer and Seller. To work as a dual agent, a brokerage firm must first obtain the informed written consent of their client. It is not necessary that the agent representing both Buyer and Seller be the same person, rather dual agency runs to the brokerage firm. This means if your agent is with one of the handful of large brokerage firms in the area, it is more likely that your transaction will be one in which dual agency applies.
The agent affiliated with a brokerage working as a disclosed dual agent must carefully explain to each party that, in addition to working as their agent, the brokerage firm will also work as the agent for the other party. The agent must also explain what effect working as a disclosed dual agent will have on the fiduciary duties their brokerage firm owes to both the Buyer and Seller.
Dual agency gets tricky in a transaction when the agent is aware of confidential information that would benefit one party and negatively impact the other. A brokerage firm must have the express written permission prior to disclosing confidential information of one client, to the other.
Examples of confidential information includes the highest price a Buyer can afford to pay and the lowest price a Seller will accept. It also includes either party’s motivation to buy or sell. Remember, a brokerage firm acting as a disclosed dual agent will not be able to place one party’s interests ahead of those of the other party and cannot advise or counsel either party on how to gain an advantage at the expense of the other party because of such confidential information.
So why should you care? Well, it’s not likely you’ll be able to avoid a dual agency relationship, and you should not necessarily try to do so. If your agent is a dual agent, it means perhaps it was internal advertising that brought a Buyer to you for your home; but, it does mean you should strongly consider being represented by an attorney in a dual agency transaction. It is the only way to ensure you have an advocate protecting your interests up to and at the time of settlement.
Questions? Feel free to give us a call.
If Your House is Worth Less Than You Owe, Let’s Talk About a Short sale
The process of selling your house is stressful enough in a normal situation, but in the event of a short sale the process may seem completely overwhelming. First, what is a short sale you ask? Simple, if you owe more on your house that it is worth, you should consider a selling it for less than is owed. Or, perhaps you have lost your job and foreclosure is inevitable. Both of these life stressors can be alleviated by selling your house and moving on. Of course, in order to do this successfully, you need the cooperation of your lender.
Next question – why bother? Easy, a short sale has a much less negative impact on your credit than either deeding it back to the bank, or losing it in foreclosure. In other words, it is in your best interest to be proactive when you are faced with negative equity or a job loss.
First, talk about the options with us. Circumstances will vary depending on the value of your home, your lender, and any other liens on your property. In other words, do a complete evaluation of your particular hardship circumstances. Do not make the critical mistake of waiting and hoping for better days. Eventually the foreclosure notice will come in the mail.
- Understand the Process
Although there is a sharp divide in both practice and opinion, we believe being represented by an attorney is beneficial in any real estate deal, but in the case of a short sale, a lawyer experienced with short sales is critical. Once a lawyer establishes you are qualified, you will complete your lenders forms and your lawyer will communicate with the bank as well as oversee the listing and sale process.
Notice that with a short sale it’s very important to talk about a short sale BEFORE you list the property. Other options exist, and they should all be explored with counsel before you list your home for amount of the mortgage balance and hope for the best. A thoughtful strategy is the most successful way to short sell your home and move on.
- Make sure your real estate team knows what they are doing
In the event that you need to short sell your house, engaging a lawyer in advance of listing your home allows you to build the team to work together toward a common goal. Real estate agents with short sale experience are what you need. Not an agent acting as a quasi-lawyer. That scenario can get everyone in trouble. Short sales require a cooperative bank, a patient buyer, and a bit of luck. Experienced real estate agents will be better equipped to deal with problems as they arise and will likely be able to warn you at the beginning of the process about the most difficult parts of the process. Having a great real estate agent can also ensure you are selling your house quickly, because in a short sale price does not matter to you, only your lender.
- Be Patient!
Short sales require lender approval, which often is slow to come. In the event you do have an interested buyer you will need your agent working hard on the deal, but you also need to be aware the deal may fall through if your buyer finds another property.
- Understand what comes next
You attorney can not only help you through closing, they can also help you understand the aftermath of the sale. In the event a bank is willing to negotiate a release, you may be able to get out of any money you owe beyond the sale price of your property. This is essential and usually the primary reason to fully participate in the sale process. Working with an accountant or financial adviser is also something to consider to help you deal with and understand any remaining debt and/or tax consequences you may face after the short sale is complete.
If you are facing difficulties and fear foreclosure is in your future take control of the situation before it is out of control. Evaluate your options early and often. Surround yourself with qualified professionals. Give us a call at Bergmann & Good if this sounds like something you need to discuss.
Bergmann Law LLC 