Making Your Own Short Sale Rules

Making Your Own Short Sale Rules

It only takes a few people breaking the rules to make things worse for the rest of us.  Today, I took my puppy, Etta, to the dog park for the first time.  There was a tremendous lead up to this event. She had to receive every one of her required shots, have flea and tick treatment applied, get her a dog license, be fixed, and I had to let her wounds heal for two weeks.  So, I was really looking forward to our first trip and to giving her an opportunity to finally mingle with other dogs.  Both local dog parks (Woof Pac Park and Rice Ranch Community Dog Park) have a small dog area and a large dog area.  However, inevitably some inconsiderate person believes that it is okay to bring their large dog to the small dog side.  Usually, they tell you “it’s a puppy” or “”my dog is gentle as a lamb,” as their rationale for obviously being on the wrong side of the park.  

Now the sign doesn’t say “For Small and/or Wimpy Dogs” or “Teeny Dogs and Overgrown Love Bugs Only,” it says “Small Dogs” and “Large  Dogs.”  I suppose a medium sized dog owner could get a little confused, or maybe they would be inspired to petition the city/county for “Medium Sized Equal Rights.”  But, I digress.  Clearly, if your dog weighs, say 50 pounds, and all the other dogs weigh less than 10 pounds, maybe, just maybe, you are on the wrong side of the park.  And, perhaps if your dog can’t make it on the big dog side even though they are in fact, a big dog, maybe they just aren’t doggie park material.  There I said it.  After following so many rules before even bringing my dog to the park, it was beyond annoying to have her first doggie park visit cut short by a huge and overly friendly pit bull mix whose owner had no regard for the rules.

In a way, short sales are similar.  Most people jump through a lot of hoops to get a short sale and they have to follow a lot of rules to get to the finish line.  Recently, I was contacted by a man who wanted to know whether it was ok for him to short sell his home to an investor, rent it for a couple years, and then buy it back.  I told him that it was probably not ok -- that his particular bank would make him sign an addendum saying he wasn’t in fact doing that very thing.  And, unless it was disclosed fully to the short sale lender, it would be fraud, and very easily discoverable fraud too since his address would remain the same and his name would go back on public records in a couple years.  He explained that, he really didn’t want to move, that his circumstances were special, and that he felt it justified him being able to participate in this improper scheme.

So, I explained to him that maybe, just maybe, a short sale is not for him.  Generally speaking, a short sale is for someone who is willing to move out of their house after the short sale is complete.  A short sale is for someone who wants a fresh start.  A short sale is not for someone who wants to ignore all the rules.

I suppose this is the reason why short sale sellers have to sign affidavits under penalty of perjury stating that they will vacate the property after the sale, that there are no hidden and undisclosed agreements to rent back the property, and why I have to deal with negotiators who are suspicious of short sale fraud at every turn.  Because no matter how many signs are posted, some people just think the rules do not apply to them.

Before deciding whether to short sell your home, it is essential that you obtain legal and tax advice, and consult with an experienced local short sale agent. If you are considering a short sale of your Santa Maria, Orcutt, or Nipomo home and would like a short sale consultation, please call my office to schedule a meeting or a telephone consultation at (805) 938-9950.

Tni LeBlanc is an independent Real Estate Broker, Attorney, and Short Sale Agent. She is a Certified Distressed Property Expert (CDPE), Short Sale and Foreclosure Resource (SFR) and Certified HAFA Specialist (CHS) serving the Santa Maria, Orcutt and Five Cities area of the Central Coast of California.

* Nothing in this article is intended to solicit listings currently under contract with another broker. This article offers no legal or tax advice. Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement.

Copyright© 2012 Tni LeBlanc *Making Your Own Short Sale Rules*