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

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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Permalink Reply by James Roath on 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.

Permalink Reply by Enrique Vasquez-Plaza on 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.  

Permalink Reply by Valerie Hammack on 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. 

Permalink Reply by Michael Schneider, ABR, CDPE, SF on 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

Permalink Reply by Patricia Mealy on 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.

Permalink Reply by Patricia Mealy on July 22, 2012 at 3:09pm

let us know how it ends

Permalink Reply by Sean Ceschia Sean Ceschia on 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

Permalink Reply by Camille Roberts on 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.

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