There are always ruthless people capitalizing on those who are in distress, whether it be a disaster situation, financial troubles, loss of job, or pre-foreclosures.  Someone is out there claiming to have the answers and help you need.  What we are finding out is once you have hired a person or company in most cases the information they provide is not accurate and sometimes they are just plain scams. 

There are some agencies that are good, legitimate short sale companies but, you have to know the difference between the good and the bad.

If you are considering a short sale or foreclosure please consult with an attorney and/or your CPA to find out the best solution for you as everyone is in a different situation and may need a different solution.

 Brandon Brittingham, a Maryland Broker offers this advice:

“If you have considered using a short sale specialist/negotiation company or you have run into a consumer who is thinking about using, or is currently using one, here are some red flags to look for:

1.  Is their type of practice even legal in your state?  Ask how many short sales they have closed, and how long they have been involved in short sales.  Ask who negotiates the short sales.  Ask if they have on-staff attorneys.  Who is the qualified specialist, and what makes them qualified?  Also ask for past references of clients they have helped with short sales.

2.  If they ask for any money up-front, there may be a problem.  First off, in some states, in a short sale situation, it is totally illegal for anyone to get any type of compensation from the seller.  I would be very wary of any company asking for any type of compensation before they performed any work.  Agents get paid at closing, as should these types of companies.  Not saying there is anything wrong with a legitimate company getting paid up-front, but just make sure you are 100% comfortable and that it is legal before you give compensation up-front.

3.  Be wary of any company that claims to specialize in this type of negotiation but has no affiliation to a real estate broker.  A lot of the companies I have run into that are running scams or offer no real service are not affiliated with a broker for a reason.  Brokers and agents have to follow a legal, moral and ethical code to our clients and consumers.  These types of companies do not affiliate with brokers for that very reason, so they don’t have to follow these codes.  Now there are good legitimate companies that aren’t affiliated with a broker, but just be cautious of the companies who aren’t because more times than not it is because they’re trying to avoid playing by the same rules. “