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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!
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 :)
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.
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!
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 :)
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.
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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