A few years ago I received a phone call from a lady requesting a Letter of Opinion on the value of her house. This only happens in certain circumstances and when I asked her why she needed it she told me her bank requested it.
When I asked a few more questions as to why she needed it, she told me she found herself in a bit of a financial mess and I suspected she was applying for a second mortgage or she was in default on her mortgage. I found out later that she was behind on her mortgage payments and the bank was threatening to foreclose.
She said she would stay in touch, and would most likely be putting the house on the market soon.
Well, she called me a few nights later, and I went to her home to list it, BUT not before I asked to see all her mortgage documents to see if she actually still had some equity in her home to pay expenses, i.e. commission, lawyer fees. etc.
As it turned out, she did have some equity, about $50,000 after commission, lawyer fees, etc.
It is so important that we do our due diligence before listing a property. We could end up selling a home that has more debt than it is worth, and nobody gets paid!
A few years ago, when I was representing a Buyer we learned through the lawyer's title search only 10 days prior to closing that the home had liens registered against the home. These liens amounted to more than the value of the house, which meant there was "zero" left to pay anyone! Obviously the Listing Agent did not do her due diligence to determine whether or not it was in good standing financially.
It all turned out in the end as the lawyer negotiated with the creditors, and we all ended up getting paid, but it could have turned out badly for everyone.
Do your DUE DILIGENCE!! and verify mortgages to ensure there is sufficient equity in the home you are selling ... or you could be working and not get paid!!
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