One of the most frequent questions I get is: “What if the seller has moved out or they plan on moving out?” Handling this correctly could mean the difference between making the deal work, and having it die much sooner that you thought possible and here’s why.
In Michigan, the lender has the right to shorten the redemption period from 6 months (or longer) to 30 days if they deem the property “abandoned”. What is “abandoned”? Well, that seems to be a VERY grey area. The only thing a lender needs to do is to post a notice on the house that it’s abandoned (even if it’s not) and allow the homeowner 15 days to respond. If they don’t respond, it’s abandoned. EVEN IF IT’S NOT.
Do you want to lose 5-11 months of marketing time because of this? I don’t think so. And please don’t think just because it’s listed and you have a sign in the yard that this posting won’t happen.
So, how to you avoid this? It’s tough to avoid, but you do need strategies – all of which will take time. Here are some ideas.
1) Encourage your client not to move.
2) If they do move, encourage them to check the house weekly for any postings.
3) Encourage your client to read and send you copies of everything they get from their lender and the lender’s attorney.
4) Don’t rely on your client – you need to visit the house at least once a week to look for postings.
If it gets posted: Have your client write a letter as instructed in the posting stating the house is not abandoned. This should be sent via certified mail.
Even with all of this caution and planning, you may still lose the listing to this “abandonment rule” unless you or your client is willing to pay an attorney to fight it for you.
We got a call this week from Margie, who is an appraiser. The housing slow down has affected her businesses and her adjustable rate mortgage recently reset. She’s behind and is about $20,000 upside-down. I’ve gotten quite a few calls over the last few months from people in the Real Estate business losing their homes to foreclosure.
Do you have any listings like this?
Do you have clients or friends in the Real Estate business in Margie’s situation? Give me a call and we can discuss how we can solve this problem for your client while making sure you get paid. Don’t lose the listing and your marketing dollars to a foreclosure.