[Context: I sent a client doing a short sale the offer to sign on their home.]
“Do we have to pay anything from our pocket?”
Answer:
Simple question, long answer…
Refer to the “Short Sale Addendum,” paragraph “A.” It says:
“This Agreement is contingent upon…consent from all existing secured lenders…to reduce their respective loan balances by an amount sufficient to permit the proceeds from the sale of the property to pay the existing balances secured by the property, real property taxes, brokerage commissions, closing costs…[etc.]…without requiring seller to place any funds into escrow or have any continuing obligation to short-sale lender.”
So you won’t be contractually obligated to pay anything.
HOWEVER, I have told your wife that sometimes banks require the seller to pay back HOA fees and/or they require the seller to make a cash contribution or sign a note to pay back some of the loss over time if the seller has more than “X” dollars in the bank.
Banks don’t tell us what the “X” is until the bank responds to the short sale offer, which takes some time. I’ve seen the “X” be as little as $10,000 or as much as $35,000.
If the bank makes such a request, we have had great success reducing or eliminating that figure for our clients. If we can’t negotiate it to zero, it would be your option to agree or have the sale cancel.
Let me know if you have other questions. Thanks…
