Legal Question in Real Estate Law in Wisconsin

In any short sale of real estate (where the lender accepts less than what is owed), the details of the transaction are entirely negotiable, with no requirement that the lender promise not to collect again in the future from their borrower. When one settles with a mortgage company, the negotiation can therefore either include any option from releasing all liability to the lender releasing the mortgage lien only. Often, the latter is the case; that is, the mortgage holder gives up just enough to allow the sale to go through and deliver a clean title to the buyer, but makes no other promises to the seller about what the future will hold for him or her. This allows the lender to still sue the borrower (seller) or otherwise attempt to collect on the promissory note (which goes along with any mortgage) from the seller at a later date, even if the mortgage is satisfied. Leaving yourself open to such a claim can expose you to everything from an adverse credit posting to a formal lawsuit eventually leading to a wage garnishment. For this reason, nobody should ever agree to a short sale without the advice of an experienced real estate or bankruptcy attorney who represents them (as opposed to an attorney representing some other party such as the buyer's attorney). Because many people do not hire lawyers, it is common for them to end up getting little or no benefit from the sale, plus face future collection of the unpaid balance after the closing. Brokers who stand to make a commission on the transaction are loath to provide this information to their customers because it might "kill the deal," and may sometimes even discourage the seller from getting a lawyer. That is why it is always critical you hire your own independent attorney to advise you in every major transaction in your life, since the only professional likely to be totally free from any bias will be one who does not stand to profit from the transaction (and who might, in fact, give you the advice not to proceed with the transaction at all, which advice rarely be given by commissioned sales staff). Attorney responses on this public website are intended only for public educational purposes rather than as legal advice for your specific situation. Responses to your questions therefore do not create an attorney client relationship between us and should not be relied upon for making any important decisions until they have been reconsidered by your private attorney. You are; however, welcome to contact my office in Racine to discuss any additional questions which you may have or to seek private advice intended for you alone. Answers on this website may also contain attorney advertising materials.