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Permalink Reply by Jessica Anaya on July 6, 2012 at 5:43am

Hi Harry,

Thank you for the information. We do have short sale approval already; however, we were told that the lender did not approve the HOA Document Fee nor the Transfer Fee.

Listing Agent is asking that buyers pay for these two fees and we want to go back to ask if the seller can pay them. In short sales, are you seeing buyers paying for these types of fees regularly?

Not sure if CA SB458 would apply since the Lender is not requiring the seller to pay anything.

Thanks again for the advice!

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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on July 8, 2012 at 1:39am

It depends.  I have seen very few transactions in CA where the short sale lender allows HOA fees to be paid from the proceeds.  If anything, they sometimes allow a transfer or doc fee and typically under $300 total.  I've never seen them allow past due HOA fees to be paid from proceeds.

 

Good luck!

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Permalink Reply by Robert Boerner on July 8, 2012 at 3:57am

Was there a bank-provided short-sale addendum added to the purchase contract?  If so, did it address HOA documents and the transfer fee?  I wonder what the estimated HUD-1 indicated regarding the fees when it was approved by the lender.  Were you given a copy of the lender's approval letter and the HUD-1?

Even in a short-sale or REO deal, California law requires the seller to provide certain HOA documents to the buyer.  If requested by the the buyer, the seller must also provide 12 months of HOA meeting minutes as well.  (Cal. Civil Code Section 1368)

If the seller does not provide the documents, they won't be able to meet their disclosure timeline.  Pointing this out to the listing agent might get a positive response. 

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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on July 8, 2012 at 4:28am

Robert,

True, the Seller is required to provide the HOA Docs and facilitate / cooperate with the HOA transfer.  But, there is no requirement that the short sale lender allow the costs to come from the short sale proceeds.  Recently (at least with the deals I've had visibility into) it has become more common for short sale lenders to remove these fees from the Seller's side (unless under $300 as I said above).  So, if the Buyer is willing to pay the fees, a simple Addendum works.

I'm working on a file where the monthly HOA fee is greater than $2,000 per month and is delinquent more than a year.  Obviously the lender has decined the almost $30,000 in past due HOA even with a lien against the property. The Buyer may pay it, with an equal reduction in price.......  we'll see.

 

Cheers,

Thom Colby

Broker & Negotiator

Newport Beach and Palm Desert CA

 

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Permalink Reply by Katherine Muhs on July 8, 2012 at 6:04am

It is not illegal in Ca for a seller to pay s s fees. It IS illegal for a s s lender to require a seller contributioN. (SB 458). That said, I do a lot of ssales with Hoa docs. Only once have I seen the lender approve the doc fee (MetLife). It's up to the buyer and seller to decide who pays for what. The reality is the seller is short selling due to financial hardship so having seller pay hoa fees isn't usually feasable. As the listing agent I either post to the MLS that buyer is to pay HOA doc/xfer fees. If the offer says seller to pay, we counter before acceptance. You can ask seller to pay them but is the buyer really willing to lose the property over a couple of hundred dollars ??

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