The homeowner was relieved after they received the Short Sale approval on their Property, after almost a year of waiting for their property to sell and be approved by their lender for a Short Sale. Then just before closing, the title company handling the sale of the property discovered that the Condominium Association for the property had not been paid (in over a year) and refused to negotiate the amount owed and would not release the lien on the property.
This is when I received the e-mail ... that stated:
"Troy, My Short Sale is already approved by my bank and the buyer is ready to close. Now they (my Condominium Association) are stopping us because they want 100% of what I owe them. Is this right? Help! ..."
Before we "blame" the Condominium Association for this one, let's first understand the situation with questions that could clarify what really went wrong.
• Was the listing agent handling the sale of the property experienced in handling Short Sales? This is one of the biggest reasons Short Sales don't work! ... the Real Estate Agent handling the Short Sale for the Seller does not know what they are doing. It takes specialized education and experience to handle a Short Sale correctly. Listing your property with someone without Short Sale education or experience can be a huge mistake.
• Did the listing agent marketing the property, have a title search done when they listed the property? Yes, a title search needs to be done up front to determine what liens are on the property. This is a key responsibility of the listing agent handling the Short Sale and it is vital that the listing agent and title company work together throughout the process of getting the short sale approved.
• Does a condominium association have to negotiate their dues? In the State of Florida, a Condominium Association is "guaranteed" a portion of their dues, even if a property is foreclosed. Therefore, if a seller is unable to pay their condominium dues, a condominium association can foreclosure on the property or wait for the property to be foreclosed to obtain their dues. In some cases, condominium associations will negotiate their dues, however they are not legally required to, as there may not be any incentive for them to do so.
• Did the listing agent represent an accurate HUD to the lender of all the dues owed, before the lender approved the Short Sale? All fees need to be disclosed on a HUD, prior to a lender approving a Short Sale. Getting the lender to approve fees that were not disclosed on a HUD, prior to a Short Sale "Closing" can be difficult, but not impossible. A good Short Sale Real Estate Agent never gives up. The secret behind the success of most short sales is the persistence behind the listing agent and above all, the professionism they demonstrate to the lender with correct information.
In closing, No ... I don't believe the Condominium Association is to blame for wanting their money. The seller is in distress, is not paying their bills and needs proper guidance. So who would I suggest did not do their job regarding this situation? ... the real estate agent handling the Short Sale.
For more information on Short Sales visit www.TroyFunk.com. Troy is a Short Sale Real Estate Broker with Keller Williams Realty in Sarasota, Florida. Troy and his Team have successfully closed over 100 bank-negotiated sales in the Sarasota, Florida area in less than a year. Troy achieved the CDPE (Certified Distressed Property Expert) and SFR (Short Sale and Foreclosure Resource) certification. He works with a team of 5 professionals that work together to get short sales approved on a full-time basis. Their service is Free to consumers facing foreclosure, as they get paid only if they are successful in completing a Short Sale, with the seller's lender paying the real estate commission.