Replies to This Discussion

Permalink Reply by T Arnold on June 4, 2011 at 10:20am

Hi Bryan, Thank you for your reply. I understand that the bank approved of paying certain things that were listed on their approval letter, basically everything. That's fine. As the seller, the bank did not ask me to contribute to sale. My stance is the following, I think the buyer who is getting a property at a greatly reduced price should be happy and understand that in a short sale they should not expect for seller, meaning me, to pay for repairs if any found. There should be nothing wrong with the property. I know the buyer has a right to ask for whatever they want, and I have a right to say no, since I have no money. One lien holder, Chase. They are paying for everything including back taxes, commissions, HOA transfer fees. HOA dues are current, so not in arrears. I have an agent. I don't think she has much experience representing the seller side of short sales.
Brian Avery said:

Hey T Arnold it is all part of the negotiation. Not uncommon for lender not to pay for certain items. They may ask for repairs?. If you want to go over your scenario I am in CA and a partner in www.freeshort-sale.com .  I will be happy to walk you through some items. Who are the lien holders?

 

Brian

858-405-5094

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Permalink Reply by Eric Mieles on June 4, 2011 at 12:39pm

Hey T Arnold. I can understand your point however I'm going to take a little different angle here. Just for the sake of healthy conversation.

There's a couple of things that you didn't mention regarding the deal that may help in finding a resolution. Is the buyer paying all cash or financing? Are they already using much of their capital in down payment on a conventional loan or are they FHA buyers with little to put down? Has your agent asked them to cover the Termite and Doc Fee to successfully close the deal?

I ask because let's say the buyers are tapped or better yet they truly are sticklers and one of those stubborn buyers I would hate for you to lose a deal over $300-$500. I don't know if you are just fighting for the "Principle" of the short sale situation and sellers shouldn't have to pay anything or are truly insolvent.

I only bring up this perspective because I like to think in different terms and look at all sides. Now if I'm your agent I would have had the Doc Fee on the Hud and paid for and my job would be to get that additional money from the buyers through negotiations with the buyers agent.

However if I'm the buyers agent I'm trying to save my buyers every single cent I can however I wouldn't advise my clients to lose the home of their dreams to an additional $300-$500.

In the end the point I'm trying to make is don't lose your home to foreclosure because of the principle of a short sale and not having to contribute anything to get the deal closed.

Good luck

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Permalink Reply by Kimberley Kelly on June 5, 2011 at 2:59am

I love reading these questions and especially the answer from other Short Sale Agents.  Always gives me a good perspective.  I do lots of Short Sales.  Chase is very sticky about their BPO's and agreed Sales prices and what they will and will not pay.  Knowing this going in, your LA didn't cover you well enough.  However, EVERYTHING is negotiable.  I do agree wtih the agent that suggests taking a deep breath and thinking about the money.  Is it worth losing this deal for $400??  If your Buyer refuses, do you really want to close the file, and start over completely??  Think hard on that one..

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Permalink Reply by T Arnold on June 5, 2011 at 5:13am

Thank you for you replies. The buyer is paying cash for the property. But, as a buyer's agent isn't the buyer informed that it's pretty much "as is"? From a seller's point of view, I've already lost well over $100k cash on this property. I've continued to pay HOA dues, so costing more money. The only people making money on this deal are the Real Estate agents. So at this point, I'm just done, and feel that the agent needs to educate the buyer.

Kimberley Kelly said:

I love reading these questions and especially the answer from other Short Sale Agents.  Always gives me a good perspective.  I do lots of Short Sales.  Chase is very sticky about their BPO's and agreed Sales prices and what they will and will not pay.  Knowing this going in, your LA didn't cover you well enough.  However, EVERYTHING is negotiable.  I do agree wtih the agent that suggests taking a deep breath and thinking about the money.  Is it worth losing this deal for $400??  If your Buyer refuses, do you really want to close the file, and start over completely??  Think hard on that one..

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Permalink Reply by Stephen Thomsen on June 5, 2011 at 5:24am

Banks will normally disallow HOA arrears, fees and transfer, home warranties, and inspection fees to name a few. Some will pay more then others. If the buyer is asking for a termite inspection they should pay for it, unless they don't understand "as-is."  As for the other disallowed costs, either you or the buyer will need to pay them or there will be no sale. Bank is not going to ask you to contribute, they will just say they aren't paying them. I see this all the time. In Nevada there is a specific addendum to both the short sale listing and purchase agreements. Again, you need to be specific with as-is and no repairs.

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Permalink Reply by Tara Polley on June 5, 2011 at 10:32am

While I think there are some good points here, I think people tend to forget one thing: The bank is not the seller. You, the homeowner, are the seller, and your contract is between you and the buyer, contingent on the bank agreeing to allow you to sell the property for less than you owe. THAT is an agreement between you and the bank. It has nothing to do with fees, and the bank is not in an agreement with the buyer in any way, therefore, they will only specify what they will pay, and won't specify what you have to pay. That's what the contract is for.

What does your contract say? If it says that the buyer is requesting you to pay for the closing costs such as, termite inspection, escrow, title, and HOA Doc fees, and you've agreed to that, then you are contractually obligated to pay them, and are fortunate the lender is willing to cover a portion of those. Your agent should have protected you by countering that the buyer would cover any fees the bank was not willing to cover, releasing you from the obligation to pay them. 

As far as the "as-is" clause, in California, it simply means that the buyer understands they are purchasing the home in the condition it was in when they made the offer, including anything you've disclosed in your TDS's up front, and you as the seller will deliver it in the condition it was in at that time. If the buyer does further inspection, and finds issues that were not available at the time the offer was made, those new issues become negotiable, and each of you can decide if you are willing to let go of the sale over them. 

Hope that helps, good luck! 

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Permalink Reply by obed montez on June 5, 2011 at 1:46pm

I just have a couple of  question ? Who is really saving money here. How many months have you not paid the mortgage?

As for the buyer getting a deal on you home is not true cause he can buy any other home in the area and your property could become a foreclosure with the way you are blaming every body.   As for agent commisions, some times they get split in so many ways that the agents are not making out as you think. Accept live for what it is and move on.  

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Permalink Reply by Todd Stearman on June 5, 2011 at 5:20pm

Hello T Arnold-

 

IF you have included in the contract the Short Sale Addendum as part of the RPA, then you have the right to not go through with the short sale because the addendum states that you must be satisfied with the terms of the short sale approval letter (The buyer must be satisfied as well).  However, looking at the fees you are talking about, $300 for HOA doc fee and a termite inspection fee which usually costs about $85 (without repairs), it may be in your best interest to cover this amount.  If you look at the big picture...You have 1 lien. In CA the 1st lien holder must now release ALL rights to seek a deficiency judgment if they approve the short sale.  So not only are you protected from being sued, you get to NOT have a foreclosure on your credit.  I agree with some of the other comments that your agent perhaps should have protected you a little better up front with a counter offer stating that any fees not covered by the lender will be Buyer's responsibility.  If this deal falls through, at least on the next go around you can insist that this type verbiage is written somewhere in a counter offer.  My advice would be first ask the buyer to pay for these fees.  If the buyer refuses, you really should think of paying the fees yourself so you can put it all behind you.

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Permalink Reply by T Arnold on June 6, 2011 at 10:01am

Thank you again for your replies, a lot of great points by everyone, not missed by me.

Reply to Tara's comment: I had countered to the original RPA that " I, the seller would not pay any closing costs." The buyer signed and agreed to my counter.

 I must add that I do know how hard agents work for their commission, and by no means was I trying to imply otherwise. I would not let the property go into foreclosure over a few hundred dollars. All in all I'm very happy that the bank agreed to a short sale, and hope that no major problems come up with inspections. I think I was just frustrated that my agent may not have covered me better up front, but it's certainly not the end of the world, and if it closes I will be thrilled. 

 

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Permalink Reply by Enrique Vasquez-Plaza on June 6, 2011 at 11:08am

That is a great question.  

Remember that all those fees will be always your responsibility, lets have that clear.  HOWEVER since this is a short sale, your common sense is in total right track, you have no money that is why you are selling.  N.1 your agent should have this explained from day 1.  

Usually when I represent sellers I counter the buyer letting them know that the short selling lender is not paying for all those things, and I leave that up to them.  Most buyers just pay for that, and some others dont.  I you do not have the money please inform your agent so he can get creative with the situation rather than discouraged.  I had many transactions involving HOA, and usually I always make clears to clients to keep current.  Transfer fees are usually paid by buyers, although many may differ.    

Most buyers wont mind to pay 300 to get the house they want but you have to push to get that point clarified and not leave that to uncertainty.   

Regarding the termite, I protect all my sellers (in the disclosures) for them not to have to pay for repairs!!!! NEVER!! they only pay for report (WHICH IS FREE!!! so who cares right?)  So bad one right there.

Finally If I am your agent I would be clear to all buyers, that all to be paid, is whatever the SHORT SELLING LENDER IS APPROVING, the rest, they will have to pick up.

 

So please, be consider with your agent, expose this proposal and maybe you will be able to get away from this.

Good luck!

 

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