HOA's and Short Sales


HOA's and Short Sales

The HOA can be one of the most challenging and frustrating elements to deal with in a Short Sale. Knowing how the HOA and its Board of Directors operate can be instrumental in getting your transaction completed.

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Latest Activity: Feb 23, 2017

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Comment by Roger Hartzog on March 11, 2014 at 5:58pm

Had a long discussion today with an HOA collection attorney. I was making a case for a disabled retired couple to be released from a lien that had been filed by the HOA in 2011. The attorney informed me that one option that could be pursued is to release the lien from the property in order to allow the short sale, but refile the judgment so that it can be enforced upon the couple's estate (should they even have one) after they both die. Sort of macabre, but an option nonetheless. Anyone ever heard of such a lien release and refiling post SS?

Comment by Roger Hartzog on March 9, 2014 at 7:15am

The View from the Dark Side

HOA's hate owners who don't pay their dues. Everyone knows that. But do you know what they hate even more than that? They hate vacant homes. And as a real estate professional specializing in Short Sales that places you in a unique position... and one you might not expect. You are actualy an ally of the HOA!

So, why do we dislike HOA's so much and consider them to be "enemies" when it comes to our Short Sale transactions? Well, that's simple. Our Sellers usually owe them money, and unless we can get it paid in some way or work out some settlement with the HOA our transaction is more than likely going to go down in epic flames!

So, what do we do? The first thing is to adjust your perspective; change your paradigm. Quit viewing the HOA as your enemy, and begin seeing the HOA for what it really is: a group of residents concerned about the quality and stability of their neighborhood. As a real estate professional this should align with your own goals when helping your clients either sell or buy a home. Nobody wants a vacant home in the neighborhood and the weeds and maintenance issues that usually come with a vacant home. Nobody wants the downward pressure on home values that inevitably accompanies vacancies. Nobody wants the crime that can result from vacancies in a neighborhood. So, you see, you have a ton of values held in common with the HOA.

What does this mean to your Short Sale? This is really simple, too. If you're workign with a Short Sale client who has a significant delinquent HOA dues account (or even a lien filed by the HOA's collection company) you should meet the HOA on that piece of common ground and begin your negotiation to free your transaction. And, DON'T WAIT!! Most HOA Boards meet only monthly, and some meet every other month. Don't get caught behind the eight (week) ball!


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