Not Paying Your HOA Fees Is The #1 Killer of Short Sales and Deed In Lieu

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Services for Real Estate Pros with Get It Done For Me Virtual Services DRE# SL641317
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Not paying your HOA Fees is the #1 Killer of Short Sales and Deed in Lieu. 

Many homeowners who are behind in their mortgage payments are also behind in their HOA fees. When we take on a short sale listing it is very important for the seller to understand the ramifications of NOT paying HOA fees. 

In the state of Florida the HOA can foreclose on you, they can lock you out of the pool and clubhouse, they can evict you after the foreclose on you and rent your condo or property out, they can deny you access through the gate. 

And the HOA can do this very fast. Many people here are being told by their agents, by their attorneys and by their friends and family members that their HOA can not foreclose because the first bank, the main lien holder, is in first position and if your bank has not foreclosed the HOA can't. Well, that is NOT TRUE. 

The HOA can foreclose on you subject to the first lien holder. They don't need your bank to foreclose on you first or at all. 

If you are planning on doing a short sale then you should do all you can to keep up with your HOA payments. If you are far behind and the HOA has their legal council contacting you- make some arrangements to pay towards the part you are behind. 

If your HOA fees get too high, your lender is not going to approve those to be paid out of the net loss they are getting at closing. 

If you want to do a deed in lieu you have to be current with your HOA fees or you have to negotiate with your lender to pay a portion of those fees for you because you must give clean title in a deed in lieu. 

Attorneys tell us that for deed in lieu- the number one killer is the homeowner being behind in their HOA payments. 

Most every attorney we know that understands the short sale process advises their clients that even if they are not making their mortgage payments they should keep current with their HOA payments. 

We are not attorneys and we are not giving you legal advice. Consult an attorney if you are behind in your HOA payments. There are options to foreclosure. 

If you or someone you know is behind in their payments consider a Florida short sale.Contact Nestor or Katerina Gasset at 561-753-0135 today for your private confidential interview to go over your short sale options. 

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Re-Blogged 9 times:

Re-Blogged By Re-Blogged At
  1. Susan Goulding 01/23/2012 05:11 PM
  2. Cheryl Thomson REALTOR Army Ret 01/24/2012 05:11 AM
  3. Devona Garrigus 01/24/2012 05:38 AM
  4. Dawn Maloney 01/24/2012 06:21 AM
  5. Steven Cook 01/24/2012 07:05 AM
  6. Scott Godzyk 01/25/2012 12:57 AM
  7. Petra Norris 01/26/2012 02:12 AM
  8. Barbara Altieri 01/30/2012 09:59 AM
  9. Lanre-"THE REAL ESTATE FARMER" Folayan 02/01/2012 05:38 AM
Topic:
ActiveRain Community
Location:
Florida Palm Beach County Wellington
Groups:
Short Sales and Forclosures ONLY
Short Sale Specialists & Pre-Foreclosure Education
Short Sales Specialists
Short Sales and Foreclosure Resource
Legal Aspects of Short Sales, Foreclosures, Loan Mods
Tags:
florida short sales
wellington florida short sales
wellington short sales

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Rainer
55,748
Ahmad Zeki
Zeki Real Estate - Lincoln, CA

Sellers not paying HOA dues is killing the condo projects in the Sacramento region.  Many are rising above the 15% delinqency rate, making it harder for buyers to obtain loan financing, especially FHA and Conventional loans.

Thanks for sharing this blog post and best of luck to you in 2012!

 

Jan 24, 2012 07:31 AM #29
Rainmaker
835,138
Barbara Altieri
RealtyQuest/Kinard Realty Group, Fairfield and New Haven County CT Real Estate - Shelton, CT
REALTOR-Fairfield County CT Homes/Condos For Sale

Katerina -- Many homeowners in trouble and trying to stay afloat will let their HOA payments go thinking they are not as important as trying to pay the mortgage. The HOA will foreclose (I just picked up a client in that situation) and you're right....delinquent HOA fees will sink a short sale. I will reblog this as well. VERY important info. Thanks.

Jan 24, 2012 08:25 AM #30
Rainer
96,727
Bart Foster
Keller Williams Realty Boston - Metro - Boston, MA
Boston MA Real Estate

It is important that HOA understand that to collect in full from the lender that they must first send a demand to the unit owner's lender for back owned condo fees. I believe this has to do with the concept of a HOA Super Lien. HOA's should be a little more aggressive with collections including foreclosing.

Jan 24, 2012 08:45 AM #31
Rainer
144,389
Victor Zuniga
Berkshire Hathaway Home Services California Properties - San Diego, CA

More and more we see banks not willing to pay for back HOA dues nor buyer's closing costs and it's killing deals left and right. So please at least have your clients pay their dues to give your deal a better chance of closing.

Jan 24, 2012 10:03 AM #32
Ambassador
428,779
Rich Cederberg
eXp Realty - Albuquerque, NM
eXp Realty Agent Albuquerque

Ron is absolutely right, back HOA payments are a deal breaker in any situation.  Best to stay on top of those fees and remind buyers of this information when they are shopping.  They may wish to opt for a neighborhood that has no HOA. 

Jan 24, 2012 11:42 AM #33
Rainmaker
710,187
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

Nestor and Katerina

I actually blogged about forced place insurance at least a couple of times. May have to bring it up again. I had a client who elected to vacate her place and asked what she can discontinue. Told her to keep the utilities on (easier to show when we can turn on the lights, and the fridge won't get moldy) and absolutely keep her insurance on. 

 

Jan 24, 2012 02:17 PM #34
Rainer
172,530
Luis Iniguez
Option One Real Estate - Fontana, CA
Search Inland Empire Homes For Sale - Short Sale Agent

This is very true.  I had a client a year and half ago and we had his condo listed   He didn't pay his HOA and the property got foreclosed by the HOA.  Nothing could be done about it.

 

Jan 24, 2012 02:22 PM #35
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1,175,914
Ellie McIntire
Ellicott City Clarksville Howard County Maryland Real Estate - Ellicott City, MD
Luxury service in Howard County & Catonsville

That conversation with a seller includes paying other items like the front foot fee and ground rent. There is no point in complicating matters even more.

Jan 24, 2012 02:34 PM #36
Rainmaker
374,103
Gina Chirico
Lattimer Realty - Fairfield, NJ
Real Estate Agent - Essex County, New Jersey

Thanks for posting.  I'm going to have to look into that here in NJ.  I haven't been a part of any deals where an owner was behind on HOA dues or in foreclosure on their unit.  Now I am aware - I will investigate it what the rules are here.  Thanks!

Jan 24, 2012 03:04 PM #37
Rainer
358,311
Keith Lawrence
RE/MAX Properties - Mahwah, NJ
ABR, CDPE, SFR, 203K Specialist

Good information.  People are mis-informed about the power of the condo association to be able to foreclose on a homeowner.

Jan 24, 2012 11:57 PM #38
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Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Katerina...

Yes indeed ... we have seen the HOA fees nearly kill several deals ... but we got them closed because the buyer agreed to pay them. However, they were less than enthusiastic about it!

Jan 25, 2012 12:20 AM #39
Rainmaker
619,666
Morgan Evans
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

I can totally see the HOA dues getting neglected also and how that could have a very sudden impact on the sale.  You figure that is probably one of the smallest bills the owner has to maintain the property. 

Jan 25, 2012 12:31 AM #40
Rainmaker
2,853,411
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

This is fantastic information, i have seen it in person where my buyers lost out due to the seller not being educated on what they should or should not be doing. I have seen the HOA place very large cement barriers blocking off  the driveway to a unit who had not paid in over a year. The HOA can foreclose very fast as well as add some hefty legal fees to what is owed also killing the short sale unless the buyer wants to pay even more. It is very important to educate the seller when you take a short sale listing

Jan 25, 2012 12:52 AM #41
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Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Richard- You are also fortunate to have buyers who can pay the HOA arrears. On our cash sales we can do that- since  it is the listing side we work- we let the buyers agents know up front before they show that their buyer is going to have to bring their offer price down a bit to keep some money set aside for the HOA fees in those situations. But if the buyer is doing FHA financing their guidelines most of the time will not permit the buyer paying those fees. 

Jan 25, 2012 01:44 AM #42
Rainer
211,241
Jack O'Neal
Conway Real Estate - Gilbert, AZ

good stuff, had it happen to me on my 3rd short sale

Jan 25, 2012 03:18 AM #43
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Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Scott- WOW! Large cement barriers! Now that is a new one on me:) But I would not put anything past the HOA. We go before many of the boards to beg them to reduce the fees so we can close trying to sell them on the fact they will have a new resident who will pay the fees on time- but they look at us with that look- we used to be able to get at least half off but now, they just say, well we really don't care because we are tired of paying for the owners who don't pay and when the bank forecloses by law they have to pay us... so no deal! 

Jan 25, 2012 03:53 AM #44
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Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Thanks for the suggests, thanks for the feature and thanks for all the great comments. I can not respond to each comment. I do appreciate each of them! Katerina

Jan 25, 2012 03:55 AM #45
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2,646,053
Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Re-Blogged by 25 agents! Thank you a million times thank you!!! Spread the word! 

Jan 30, 2012 05:49 PM #46
Rainmaker
799,449
Lanre-"THE REAL ESTATE FARMER" Folayan
Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC - Bowie, MD
I don't make promises.I deliver results.SOLD HOMES

Coach "K" this is the main reason why my short sale is not going anyway. We even got an offer on my short sale and we were only off $4,751 with a Conventional loan. And the bank still wouldn't approve the deal. BEYOND FRUSTRATING. And I feel very bad for my client who is super great as far as giving me what I need whenever I ask her and be patient as well. Have to re-blog this one. Thanks for sharing.

Feb 01, 2012 05:30 AM #47
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2,646,053
Katerina Gasset
Get It Done For Me Virtual Services - Wellington, FL
Get It Done For Me Virtual Services

Lanre- Good luck with your short sale listing! 

Feb 01, 2012 04:42 PM #48
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