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House for sale...but seller is applying for loan modification. Is this material fact?
Yesterday, I showed a truly adorable cottage to my client.
The seller is not (yet) underwater on her mortgage, but could be if she receives an offer less than what she owes at which point, it could be a short sale. The property's current market value isn't worth what the seller is asking for. It's already gone through two agents, has had the price adjusted more than once. And it's still over-priced.
I talked with the listing agent to get the full story.
And she told me the seller is applying for a loan modification, and that she should get an answer by April. So...what if her loan is modified? The agent said the seller will keep the house. But what if there's an offer and it's accepted before the seller gets an answer to her loan modification aplication? The agent said it will have to be at the listed price for the seller to accept the offer. What if the buyer spends the money for the appraisal, after which the modification is approved? The seller will back out of the agreement (and the buyer is out of luck and won't recover the cost of the appraisal unless the seller reimburses ... more

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