Legal Question in Real Estate Law in California
Is it possible to represent a client in listing agreement of a short sale as both the listing broker and the client's attorney. There is a guy who is licensed as a CA real estate broker and he is a lawyer as well. He charges clients both an attorney fee and a real estate commission to list their short sale. Is that possible or does it violate any laws or rules? For example, If I am both a lawyer and a real estate broker, am I able to represent a seller in both capacities and charge two separate fees, one for my legal duties and one for my broker duties?
1 Answer from Attorneys
Of course. If I own a gas station and a roadside diner, I don't have to choose between charging you for the gas or the meal. What I question is what anyone needs a lawyer for in most short sales, and why any ethical attorney would be advising a client to proceed with one when they are almost always of no benefit to the owner, only the brokers and the bank. It is a myth that they are any better for your credit score than a foreclosure. Fair Issacs, the people who do the math for all three major credit agencies, has gone on record in the Washington Post saying so. And short sales involve costs that a foreclosure does not, while exposing the seller to all the legal risks of a real estate transaction. The ONLY time a short sale is better for the seller than foreclosure, is if the first lender is going to foreclose and there will be a sold-out full-recourse second, AND a short sale would pay off the first in full and pay enough for the second to agree to walk away.