Somethings your investments just don’t work out like you planned, and you might decide it’s time to sell your annuities.
But selling a structured settlement can be a tough task, especially because of the mandatory court approval requirements, and the involvement of other stakeholders such as claim adjusters, attorneys, and of course, buyers. In addition to all this, you also have to decide whether you want to opt for the services of a broker.
So how do you know if using a broker is the right decision?
Pros of having a broker help you out to sell your annuities:
Accurate representation of technical information about your settlements so that there are no last minute shockers – There is a lot about your structured settlement contract that you might not be aware of, and hence might miss out on mentioning to the buyers. In the due course of the negotiation, all details are explored, and it really would be a rude shock for to realize that the amount quoted to you would have to be reduced because of a discouraging clause present in your settlements contract. McKellar’s 101 on structured settlements suggests that when you have a broker to guide you on every step, you have a fool proof guide on presenting all details correctly.
A reliable source of financial guidance and negotiation advice – Lawyers, claim adjusters, and you – these are not the best people to work out the financial intricacies of a deal. This is the expertise of the broker, and you might as well get a great deal using their services. Brokers help you find the right buyer for your annuities, and also help you negotiate for the best possible deal, as explained by Simon Volkov in his article on the role of brokers. Also, there are several peripheral clauses to the structured settlement deal, and brokers help you get the best out of each.
Preparation of all the necessary documentation for court approval – All your intention of selling off your structured settlements will hit a roadblock if the court disapproves of the sale. A broker can help you a lot in terms of being prepared for the questions posed to you by the court, and preparing the necessary documents that help speed up the process.
Cons of having a broker help you out in the sale of a structured settlement:
Another financial blow – It is painful to have your financial emergencies eat away into the worth of your structured settlements. You only get the immediate cash after the value of the settlement amount is discounted to a certain extent. In addition to that, you have other expenses associated with the sale of the settlements. Adding a broker into the mix might reduce the financial viability of the deal further for you. Walter Rooney suggests that you need to compare the possible financial benefits of having a broker versus taking the deal forward without his/her involvement.
Fraudulent brokers – Yes, that’s possible. There are unscrupulous men and women out there who claim to be licensed brokers, but are actually agents of buyers. These brokers tend to coax sellers into going ahead with the sale with certain buyers without negotiating much. Of course, you will have to be a particularly careless seller to fall prey to their antics, but then, that is a real risk.
How to decide whether or not to go for the services of a broker?
Some questions you need to ask yourself before deciding upon whether or not to involve brokers in a structured settlement sale are given as follows-
How big is the amount of the structured settlement?
The amount at stake is the primary factor that you need to consider while taking a call on including or excluding a broker from the scheme of things. If you are just in the beginning phase of the settlement, it is likely that the amount involved in the sale would be huge, as most of your annuities would be unpaid at that time. In such a case, it might prove to be worthwhile having a broker help you get the best deal, as even a single percentage decrease in the discount rate could result in substantial improvement in the immediate cash amount that you will get from the buyer. A broker is well equipped with the technical expertise to negotiate better and pull out that additional percentage benefit from the deal for you, which, by nature of the amount of the settlement, would mean a lot of money. However, if the percentage of the structured settlement that is being converted into cash is not too much, then it might not be worthwhile having a broker, as the amount of additional money that he/she might be able to extract for you is likely to be offset by the fees anyways.
Can the broker tender any testimonials of his/her service?
It is not uncommon for successful brokers to take out testimonial notes from their happy clients, and you can use this as an indicator of how credible the services of the broker are. Look for brokers who are registered with the Department of Justice, and have solid background to stand testimony for them. It is worthwhile for you to consider researching online at different opinion forums about brokers, and seeing whether they have any words of praise or complaints recorded anywhere. Moreover, you need to answer for yourself – would you want to trust the broker with your sensitive information?
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