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HOA's have a lien for delinquent dues in AZ and title cannot be transferred without the HOA being paid. Of course. if it goes to foreclosure then the lien is wiped out.
Part of that $3900 is going to be fines. The listing agent should be negotiating with the HOA to see how much they will forgive.They will negotiate, but it takes time because it has to either be done through their attorney or at the board of directors meeting.
I would advise to not stand on principal. If the value of the house is worth $3900 more. then pay it and close. Otherwise, you may spend a lot more time trying to find another property and may not find one equal to this one. Then again you may find a better deal.
Neither the listing agent, nor the selling agent should pay anything out of their pocket for these fees. I'm one who does not believe in agents subsidizing buyers and sellers purchases, and I would let a deal fall through if the buyer and/or seller can't come to an agreement. My theory is, if I can't get a deal negotiated, then I don't deserve to get paid.
More than likely the Title Company or Buyer's Mortgage Lender will send out an Estoppel Request to the HOA.
When this occurs, with or without the placement of a lien on the seller or property, the parties will be made aware of the HOA delinquency.
Asking agents to offer ANY sum of funds is not right..... This is not their delinquency or insolvency issue.
Consider agents to be mediators.... would you ask a mediator to pay any portion of your lawsuit?
It's unfortunate that you've been placed in this predicament.
However, it is able to be settled..... although there will be a delay of your closing.
The settlement with the HOA should have been done long ago..... prior to submitting the Short Sale to the lender.
The banks are not required to pay ANY delinquencies (e.g. HOA fees, taxes, insurance, etc.) until full foreclosure occurs.
Once foreclosure occurs, specific statutes (state and federal) will dictate what the bank is required to pay to the lien holders or demanding parties.
Get the listing agent to set up a meeting with the HOA and discuss a settlement.
Once a settlement is reached, have the seller and/or listing agent negotiate with the seller's lender in getting the lender to pay the settlement amount.
Remember, someone is losing money here.
This means negotiations are required, and it will not happen instantly.
Having patience, or walking away.... your only 2 choices.
I wish you the best :)
Darlene,
Find out what is the minimum net payoff for the 1st and 2nd liens. If there is extra money left, then discuss with both agents (listing and buying) where to get other money to meet HOA payment. then revise the HUD1 showing the changes. I know this is a slim chance but I think, worth a try. You may go back to HOA and negotiate to reduce HOA liens.
Good luck!
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