short sale ...rules

[jim2798]

What is the name of your state (only U.S. law)? California

I am just looking for some feedback, because I already walked away from this deal....sounded fishy:

Property is listed noting notice of default filed, seller seeking short sale.
We made a full price offer at the listed price. After hemming and hawing, they came back a day later and asked us to lower the offer $2500 and pay $2500 at closing to cover seller's delinguent condo HOA fees. I felt that at best that was inappropriate, and not my problem. We just said no, and our original offer is still on the table, but has not been either accepted or rejected, in writing.

Thank you for any comments.

 

[seniorjudge]

Obviously I haven't seen any of the paperwork, but what do you care where the money goes?

If I say, "I'll sell you my house for $100K," and you say, "Okay," then what difference to you is it if I then say, "You give me $75K and at closing, I want you to give my Great Aunt Tillie $25K"?

 

[justalayman]

well, there is apparently a lien on the property and unless that lien is released, the sale isn't going to be completed. So, rather than getting into the sale at the price you offered and then tossing another $2500 on top of that, they accepted reducing the price so it does include the delinquent HOA fees.

Since it's short sale, whatever price it agreed to is up the the bank in the end.

I can't see a problem with the situation right off. That doesn't mean there isn't some scammer that figured out how to scam a couple bucks from a deal like this though.

 

[seniorjudge]

My Great Aunt Tillie really needs that dough for her trip to Tunica.

Bail money, gambling, booze, stuff like that.

 

[jim2798]

Thank you both very much for the feedback. That does give me some perspective. I understand that it is 6 vs half dozen for me. It does seem like it lets the seller get $2500 that the bank should get, but on the other hand, yes there is surely a HOA lien, and in a sale that does have to be cleared somehow.

It did adversely affect our cash position. $2500 one way or the other on the loan is not a big deal, but it would be $2500 MORE cash out of pocket at close, and we were wanting to minimize that. IN FACT, our initial offer was $5k above list, with seller to credit us $5K at close. But apparently in the circumstances, there was just no way for that to fly. So we made is just a simple full price offer, no strings.

We are told that the deed sale is actually scheduled for August 10, so I think we were just never in the picture. We could not have closed a loan in that period of time. The condo has been for sale since March 2008! We are told that there were a few previous tentative sales that fell through. We suspect that the short sell specialist the seller is working with has manipulated the situation to allow her to remain in the house all this time...paying neither the bank nor the HOA!. The reason I am suspicious is that the condo is even today priced $25K under very recent comps. so something is fishy that it has never sold.

Anyway, thanks again . We are out of that one and will keep looking.

 

[tranquility]

Because of the nature of the forum, "?"'s are appropriate. Please provide.

 

[calgirl58]

It has never sold because the price is Make believe. The lender has probably no idea what price the seller has placed on the home. The seller simply hopes to get you excited, get into an escrow and then see if the bank will accept the price. I alwsy check to see how upside downa seller is on a short sale...because it will speak volumes about the house actually closing an escrow

 

[nextwife]

It has never sold because the price is Make believe. The lender has probably no idea what price the seller has placed on the home. The seller simply hopes to get you excited, get into an escrow and then see if the bank will accept the price. I alwsy check to see how upside downa seller is on a short sale...because it will speak volumes about the house actually closing an escrow

Really? I work up short sales for bank approval, and what we approve has all to do with current market value and nothing to do with how upside down they are.

 

[jim2798]

calgirl and nextwife....thank you very much for your input. Comps are hard these days, I am sure, and the 55+ age restriction complicates it....but I feel the asking price is low, but on the other hand, it has not sold yet. They told us the foreclosure was to be 8/10. Don't know how to find out if that happened. It does seem the agent is working ( "scheming"??) to let the lady stay in her home as long as possible. Thiscondo was purchsed for $285K in 2006, went for sale in 2008 for $265k, and has been on and off the market ever since, with the asking price recently at $165K.

Would it be out of line for my broker to ask who the bank is and try to contact them directly??

 

[nextwife]

calgirl and nextwife....thank you very much for your input. Comps are hard these days, I am sure, and the 55+ age restriction complicates it....but I feel the asking price is low, but on the other hand, it has not sold yet. They told us the foreclosure was to be 8/10. Don't know how to find out if that happened. It does seem the agent is working ( "scheming"??) to let the lady stay in her home as long as possible. Thiscondo was purchsed for $285K in 2006, went for sale in 2008 for $265k, and has been on and off the market ever since, with the asking price recently at $165K.

Would it be out of line for my broker to ask who the bank is and try to contact them directly??

Sure, contact them. It should be public record.

 

[tranquility]

Still, "?" helps focus issues.