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Committed to Sell for less than what is owed

By Doug Voss

Services for Real Estate Pros with KC Improved Housing Solutions

September 11, 2008 01:33 PM

I have a Seller who is absentee, has 2 vacant houses that he owes at least twice what I know we will be able to get out of them. They are both vacant investment properties and in need of repairs. I have inquired about what he is going to do about the remaining debt once we have an acceptable offer (which will be half the amount of the debt or less). The way I see it, they will need to find another way to fund this remaining debt themselves with cash or some other unsecured credit. Do I need to be overly concerned about this situation as the Listing Agent. Does it need to be figured out before I officially list the properties? This is the first time I've been in this situation.

Thanks for your help!

Doug Voss, KC Improved Housing Solutions 913-856-5466

agent for Realty Resource of KC

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Edward moloney

Edward Moloney Loan Officer GMH Mortgage Services - Holliston, MA

Loan Officer Providing 5 STAR SERVICE

My thought is this will become a shortsale. If that is the case then you may wante to partner with a local agent that has some expericnce with these type sales. They are different.

Sep 11, 2008 01:43 PM

Terri Visser

Desert Sky Real Estate, LLC - Redmond, OR

CRS - 12 Years Selling Central Oregon Real Estate

Sometimes in a short sale the lender forgives the "leftover" debt. Sometimes they don't. I've know investors who are required to repay that difference. It's important to stay in close communication with the lender and recommend your client talk to an accountant and attorney. And document that! They may hear you say it, and they may acknowledge it, but you never know when something will go south. It's hard to take those kinds of financial hits and you don't want to be stuck in the middle.

Sep 11, 2008 03:51 PM

Doug Voss

KC Improved Housing Solutions - Overland Park, KS

Edward and Terri,

Thanks for the comments. But this investor is not in trouble with the lender. They have been making payments and can still make payments but have had trouble with vacancy and want to unload this property. Short sale is not what they have in mind, they just either need to pay off the remainder of the note somehow or refinance it with unsecured credit (ie credit cards or some other means). Should I be worried about this condition as the Listing Agent in order to get a potential transaction closed? Doug

Sep 12, 2008 12:38 AM

Fred Griffin Florida Real Estate

Fred Griffin Real Estate - Tallahassee, FL

Licensed Florida Real Estate Broker

We invite you back to ActiveRain in 2017.

Much has changed since your last blog post.

Best to you!

Jul 13, 2017 07:35 PM

Committed to Sell for less than what is owed

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Doug Voss

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