Economic bad news often feeds on itself, especially in the real estate world. Consider all those underwater homeowners out there(those who owe more on their house than its current market value). Beleagured homeowners may be motivated to sell for a variety of reasons, but they are often stonewalled from selling because mortgage companies can't agree to sell a property at a loss. Even when mortgage lenders agree to such short sales, it's not an easy process, says real estate attorney, Jerome Prager of Dallas-based Prager & Miller. In the meantime, the market stagnates.

Enter the Texas Real Estate Commission, which is working to reduce the number of residential foreclosures by providing some much-needed uniformity for homeowners and mortgage lenders in these situations. Until now, mortgage agents often altered sales contracts to address the need to sell a home at a loss, but this created a new set of problems because the contract language was often inaccurate or exposed agents to allegations of practicing law without a license. Newly adopted contract language simplifies the process and could lead to more such short sales and fewer foreclosures.

"Essentially there have been situations in which these edits and insertions by a real estate agent in contracts may lead to disputes and could be deemed to be the unauthorized practice of the law" says real estate attorney Jerome Prager, of Dallas' Prager & Miller. 

"These are obviously difficult times for the real estate industry, as well as for homeowners and prospective buyers," says Mr. Prager, who as co-chair of the Commission's Broker-Lawyer Committee helped draft the language. "It's more important than ever that unambiguous closing documents are legally binding, enforceable and drafted to cover virtually any contingency."

To speak with Jerome Prager about the contract addendum concerning short sales of homes, please contact Mark Annick at 214-559-4630 or mark@androvett.com.