Latesha shaw, Other/Just Looking in Patchogue, NY

I recently applied for a short sale and was charged a $ 2000 upfront retainer fee by the attorney is this legal?

Asked by Latesha shaw, Patchogue, NY Tue Feb 2, 2010

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I will tell you how my office handles short sales. Hopefully, this will provide you with some insight.

Assume we are the attorneys for the seller of a short sale property:

1.We charge a "LOW" upfront minimum fee (think hundreds, not thousands).

2. We usually put the short sale package together. If the deal fails, the low upfront fee is all we get as payment. The upfront fee does not come close to compensating us for the time spent putting the file together (too bad, so sad).

3.The bulk of our fee is paid by the bank. We request Y, but the bank usually cuts our fee to X. What do we do? We accept what we get from the bank and the low upfront fee as full payment.

That's how we handle short sales. However, I have heard of attorneys requesting full payment, or a retainer upfront. Requesting a retainer from a client is not, per se, illegal.

Ideally, each attorney will charge what he/she thinks is reasonable compensation for his/her services. It's up to the potential client, not members of a Q&A forum, to decide if the attorney's services are worth the requested fee.

All the best!

Robbie L. Vaughn, Esq.
Attorney-at-law
631-780-4758 (Phone)
East Islip, NY 11730
Web Reference: http://Rlvaughnlaw.com
0 votes Thank Flag Link Wed Feb 3, 2010
Dear Latesha,

I work very closely with attorneys and I know that they usually charge a retainer fee. Basically put when you hire an attorney they will draft a retainer agreement that explains the nature of their representation and how much it will approximately cost for them to represent you. In your case they may tell you that a standard attorney fee for a closing may cost approximately $3,000 but they will require an upfront retainer deposit. That deposit will then be applied against your final bill. In most real estate transactions you should ask for a flat fee arrangement, so you will have an idea as to how much it will cost upfront. Usually your money is returned to you if your transaction does not go any where, less the attorneys' time.

Refer back to your retainer agreement.

Good luck.

Nirmala Caraballo
Licensed Real Estate Agent
Cruse Realty
Tel.: 646-479-7873
Email: nhcaraballo@yahoo.com
0 votes Thank Flag Link Wed Feb 3, 2010
Latesha - the right person to ask for legal advice is an Attorney. There are a lot of Realtors who would be happy to work with/for you in the process of buying a property.
0 votes Thank Flag Link Wed Feb 3, 2010
Attorneys always want money up front ( a retainer) for new cleints. However, this is a expensive way to do a short sale. The differnce between doing a short sale with a realtor and a lawer is that a lawer is going to charge by the minute and hours when the realtor charge by the transaction. The realtor commision will be considered in the short sale transaction and the attorney fees will be difficult to be considered when completing the hud1.

In short you will be paying the attorney a lot of money just trying to find someone that will talk to. The attorney will have very little clout when talking to the bank. The attorney is great for legal issues but a short sale is not a legal issue, it is more a procedural issue.

The key things is to make sure :

the offer to purchase is through a 3rd party that is making a independent offer
The mortgagor is not receiving any funds
There is a hard ship on the borrower
There are limited assets by the borrower to incur the lost
There is proof that value has reduced


Good Luck


Keith Manson

First Weber Group
Certified Distressed PRoperty Expert
Metro Milwaukee


htp://www.milwaukeebailout.com
0 votes Thank Flag Link Wed Feb 3, 2010
Short Sales are an arduous journey - for you, for the seller, for the attorney and for the agent. You toss the dice - and then wait 9 months to find out what came up.

If you paid the fee within the last 3 days - I believe you can get your money back, according to state law - but don't quote me! That could just apply to cars and fancy TVs.

The link below is the New York Chief Administrator for the Courts Phone Number for disputes with attorneys - and you will get your answer immediately - here's their 800 number as well (877) FEES 137 Do this NOW - the best of luck Meredith Kurz LSA CBR CHMS EPRO
0 votes Thank Flag Link Wed Feb 3, 2010
An attorney can charge whatever retainer he/she wishes--however, do shop around--not knowing your circumstances--keep in mind there are attorneys who charge no retainer fees in doing short sales--they simply wait for the transcation to be completed and get paid by the bank.
0 votes Thank Flag Link Wed Feb 3, 2010
Latesha
I am fairly sure it is legal, I would say ask an attorney but I don't think he will like the question. However most short sales are handled by Realtors. I am sorry that you went that route, I hope the attorney does a good job for you.

Best of Luck
0 votes Thank Flag Link Tue Feb 2, 2010
Latesha,
Without knowing all the facts, I can only suggest that you speak with the attorney if you don't agree with the upfront fee. Remember, you can always fire your attorney. However, he/she may be entitled to payment for services rendered. Good luck!

Robbie L. Vaughn
Attorney at Law
631-780-4758 (Phone)
http://www.Rlvaughnlaw.com
Web Reference: http://Rlvaughnlaw.com
0 votes Thank Flag Link Tue Feb 2, 2010
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