Signing docs tomorrow and seller has decided not to pay HOA delinquent fees.
Replies to This Discussion
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Permalink Reply by Bryant Tutas on
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Darlene. That sucks! I doubt the closing agent will close without the HOA being paid up to date whether there is a lien or not. And of course even if they did the HOA would come after you. So it needs to be settled at closing. My guess is that the seller and/or agents will sort it out. Just say "no" and see how it plays out.
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Permalink Reply by Christina Conrad on
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We have been burnt on this before..that is why we ask upfront before we start the ss process if there are homeowner dues owed...if so, then it is put on the HUD and comes out of the closing cost...Good luck...
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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Unfortunately, this has become VERY common in Southern CA. If the HOA is not settled at closing, it will carry forward to the property and it will be your responsibility along with ongoing penalties and possible legal fees.
It sounds like you're doing FHA loan. I doubt your loan will close without this being settled at closing. The lender may pull your funding.
As others have said, tell your Agent to "get it resolved".
Best of luck,
Thom Colby
Broker
Newport Beach CA
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Permalink Reply by Catherine Myers on
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Recently we closed one when the HOA would not settle w the seller. She owed more than 7k. Property sold for 80k and a 5% commission. As you can imagine there was no money for anyone to settle this. The escrow company drew up some documents, it closed without being settled and I forget the details but it was because it was a personal debt. Yes they will pursue seller bur they will likely only succeed in helping her file BK. Check with escrow... They may be able to close it. The one thing the buyer did get clear with her legal counsel is that the debt followed the seller only in California and not the property.
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Permalink Reply by Richard on
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For future reference, I'm wondering if the HOA fees can be negotiated down from the full amount? Has anyone had any experience doing this? And, what are the chances that the HOA will accept a reduced settlement rather than spending the effort to recover the full amount from the seller in the future or, even asking the buyer to step in?
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Permalink Reply by Jeff Payne on
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Richard, I have tried numerous times to get the HOA to negotiate their fees and have lost 100% of the time. In Florida, the HOA can collect in arrears from the bank if they bank forecloses, I believe it is 6 months for a condo, maybe a year. The HOA is usually better off not negotiating because they most likely would get more in foreclosure.
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Thanks once again Jeff!! Here in Arizona, it is probably similar as there are a lot of HOAs here. Both states got hit hard with foreclosures.
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Richard, you are correct, Arizona is much like FLorida. I have some really good friends who are agents in AZ who do hundreds of short sales, before long you are going to need to get your license :)
On a side note, I have been successful in getting the banks to pay all of the past HOA fees, BofA recently agreed to pay 18K recently for past HOA fees on a condo
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Hi Jeff,
You guys have a vast wealth of knowledge in this field. A lot more than I can digest at this time. I've decided I'm going to let you real pros take care of this national crisis. There's no need for me to muddy the waters. The country is in bad enough shape already :)
But it's interesting that you mentioned getting my license. Just by chance I was discussing real estate with a brother last night at my mom's birthday gathering. He informed me that my sister and neice had decided recently and had already started turning over homes in the Phoenix southeast metro area. So, interesting enough the main conversation aside from my mom's birthday was real estate.
When I think about it, its funny that I have a sister and neice with some money burning holes in their pockets and willing to do some tough work, yet another real estate agent brother who cringes at the sound of the word "short sale". I guess some people are not cut out for it.
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Permalink Reply by Sean Underwood on
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Hi Richard.
Some HOAs will cooperate in negotiating. However, it takes dedication on the part of the Listing Agent or assigned Short Sale negotiator.
The HOA is usually really mad at the Seller. So, getting the Seller to call and discuss with the HOA counsel is probably not a good idea.
I recently went to an HOA "Monthly Community Meeting" and had all of the HOA electives to speak with.
It worked out great. Their attorney called me the next morning and offered $4200 in place of the $11,300 owed.
Research the Statutes and know how much the HOA will be paid if the home forecloses. This is great leverage.
Also, if the HOA has already obtained "Certificate of Title"..... walk away.
Some HOAs will foreclose and obtain Certificate of Title to rent out the home and recover losses.
This is a losing battle 99% of the time. So, walk away from such a circumstance.
Also, do all of this negotiating BEFORE negotiating the Short Sale with the lender.
Place your negotiated amount on the submitted preliminary HUD Statement, and hold strong during your negotiations with the lender.
Happy negotiating :)
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Permalink Reply by Simone Mancuso on
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Definitely negotiate w/ the HOA. I have used several tactics to get them taken care of. Once the HOA has agreed on an amount, put it on the HUD for the lender to pay. I have also had the HOA agree to a soft note which the seller signed at closing. After closing I went back in and offered the HOA cash to settle the soft note. In the end, we probably only paid about 1/4 of what was truly owed to the HOA.
To make your negitiations stronger, check to see what will happend to the HOA if the house is foreclosed on. They may not received a nickle in that situation.
Good Luck!
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