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Would You / Should I Take This Short Sale Listing???

Posted by Terry McCarley on July 18, 2012 at 4:38am in Short Sale Discussions

I have been contacted by an owner of a condo to list the unit as a short sale.  The seller has 2 loans - both with BoA.  The unit is worth approx 30k.

The biggest issue I see is that the seller vacated the unit in December of 2009 and has not paid any of the HOA fees which are currently running $350.00 per month.

I LOVE helping distressed homeowners but my instinct tells me this one will not go thru due to the excessive back HOA fees.

So my question to you is would you / should I take this short sale listing?  I want to help but yet at the same time don't want to waste my time fighting a losing battle.

Your thoughts and input will be greatly appreciated!!!

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Tags: Condo, Difficult, Sale, Sales, Short
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Replies

  • Camille Roberts July 23, 2012 at 12:07pm

    Hi here in California, the Banks state they can no longer contribute to any HOA liens. I have sold this fabulous home 3 times but HOA refuses to budge on the amount of the $13,000.00 lien, they want it all. The B of A first cannot contribute. The HOA has cost us the sale of this home and now we are pushing into the TD sale date. Unless a buyer is willing to contribute up to all of the HOA lien, in addition to the purchase price, they will all be willing to let it go to sale, and that is a shame.

  • Sean Ceschia Sean Ceschia July 23, 2012 at 8:00am

    I sold a condo in Tempe AZ,  for $490,000 and the buyer agreed to pay $45,000 in city and HOA backed fees,  just try to negotiated the HOA down and put the fee on the listing so the buyer is aware of the fees that he need to pay cash at COE.

    good luck.

    Sean Ceschia

    West USA Realty 

    602-330-7903

  • Patricia Mealy July 22, 2012 at 3:09pm

    let us know how it ends

  • Patricia Mealy July 22, 2012 at 3:06pm

    you can ask the HOA for amnesty for the difference the bank will allow ( if any) and home owner contribution. HOAs will release liens sometime but peruse the home owner  after the sale even on a foreclosure.Some HOA will wave the late charges. A lawyer told me to make sure I used the work amnesty when working with an HOA, worked for me. 

    I would ask the seller to try working with the HOA before taking the listing. You will not be fairly compensated on this one less than minimum wage per hour would be my guess.LOADS of stress depending on your personality.

    Do they need to do a BK? That would get rid of the HOA maybe and stop the foreclosure you can short sale after the BK.

  • Michael Schneider, ABR, CDPE, SF July 22, 2012 at 8:38am

    I would take it...

    short sales are not 100% successful...but they do open the door for additional opportunities.

    it's a volume issue as I figure. If seller is not cooperative with our process..then i may discontinue...for that becomes a chase.and unnecessary challenge.....etc. its a whole new industry out there./..after 22 yrs as a broker...yikes...it's so different these days.....but ya have to adjust. I have ! I developed a nationwide referral network...for Short Sales.

    There is always a silver lining .....just find it !  best wishes, and good luck. thank you for sharing.

    Mike in Windy-City

  • Valerie Hammack July 22, 2012 at 7:35am

    This is a very difficult short sale due to past due HOA. With over $10,000 in back HOA, I would get the authorization signed talk to the asssociation and BOA prior to taking the listing. Find out what they will/can do if anything to make the short sale happen. 

  • Enrique Vasquez-Plaza July 22, 2012 at 5:29am

    Great question.  Here are my thoughts:

     

    1. Taking it or not: Either way, if you TAKE IT or if you DONT TAKE IT, you are helping.  In one you do it, and on the other one you let others step in or either you assit seller to do deed in liu.
    2. The fact that both loans are with BOFA is good.  no negotiation on the 2nd since ussually they take care of the payoff internally.
    3. Price 30K.-  offers low commission, but offers the opportunity of obtaining cash buyers that will be calling you for you to represent them.  Here you have your chance to double the profits.  Most importantly: are you a 300K agent? or you usually deal with transactions like this?  I rather have 1 more opportunity that not have it (in my case) Do you have an assistant?
    4. HOA:  Is client willing to help? Ask negotiator whats the max this investor allows for HOA.  Ask the HOA in writing if they are willing to wither help or lose it.

    Good luck.  

  • James Roath July 22, 2012 at 5:25am

    Your instinct to be wary of this short sale is well founded. i have lost more short sales to HOA issues than any other single problem. Have the seller contact the HOA and see if they are in a mood to negotiate.  The issue of past due HOA fees is differerent in each state, but in Florida, under current law, subject to different situations, the HOA will normally only get 1 year of past due fees from the foreclosing instution. As I said, there are exceptions, but generally  investors will allow up to one year of fees to be paid.  Since this purhase price is so low, that may be an issue.  Another option would be to get a contract on the property where the buyer agrees to pay a certain amount of the fees. I guess what I am saying is the before flatly turning them down, put in a bit of work, you never know what referral may come from this seller.  Plus, it feels good to help the distressed homewoner and it's good for the overall market.

  • Sylvia Barry July 22, 2012 at 4:07am

    I have also sold a condo via short sale and BofA paid the HOA fees.  That's one way of doing it, but could be risky as you never know whether the lender will pay the back HOA rellated fees (meaning fees, penalties and collection fees).

    They other way of doing it is to disclose that on MLS and say the buyer will have to be responsible for that.  In this case, the same buyer was willing to pay the HOA fees if the lender did not approve, but the lender did so the buyer did not have to also pay for that.


    But make sure it's a condo at a price where a buyer will be willing to do that.

  • Jerri Schick July 22, 2012 at 3:06am

    I have been successful several times in getting the HOA to accept a contribution from the lien holder (just as if the HOA were a junior lien holder) and the HOA took it because they knew if it went to foreclosure they would get nothing.  Sometimes the HOA has to go to the board to get the amount approved but so far it has worked everytime.

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