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Short Sale Contract Language Challenging not just to Foreign-Born Agents

By
Real Estate Broker/Owner with Highland Realty, Inc 0225 099336

 

 

If you are a Office Broker, manager or team leader and you have foreign born (English as a 2nd language) agents working short sales or foreclosures, I hope you are working with them carefully as the nightmare addendums and paperwork comes through the office.

I consider myself fortunate to have several really capable native Spanish and Vietnamese Realtors working with me, who are quite fluent with English, but are no match for the addendum language being generated by foreclosing and short-sale lenders of record who are “sort of” trying to divest themselves of a growing and unwanted inventory of properties. I say “sort of” because I have difficulty believing they actually expect people to totally surrender any and all purchaser rights in the transaction. I also understand the concept of “as is”, but if you don’t read every line, every word of the addendum, you and your agent could be setting the purchaser up for a financial disaster. 

This is problem enough for educated American-born agents, but, from what I have experienced, it is a serious problem for those 2nd-language folks who do not understand 20% of the terms used and 50% of the implication of the twisted terms and conditions proposed in the counteroffer.

For example: 

One of my Spanish-speaking agents submitted a 25-page offer for contract on a property being advertised as a short-sale. A week after the offer was submitted, she received a 26-page addendum full of legalese in counter to the offer presented. Essentially, it minimized or eliminated any remaining purchaser rights after he agreed to buy the property “as is”.  One section of the addendum addressed homeowner association documents. It specified that the seller would not provide them and that the Purchaser had 11 days to remove the contingency or forfeit the right to review. In Virginia, the HOA’s have up to 14 days, by statute, to prepare and deliver the documents. Hmmm. Something didn't add up here.

On behalf of my selling agent, I contacted the listing agent and asked how they planned to compel the HOA to prepare the documents and provide the purchaser with the Virginia State mandated three-day period of review to accept or decline the documents. After a long pause, he said, I guess we could write in an amendment to extend the timeframe…. After paying $312, the Purchaser received the documents - one day before closing (There was another provision that the seller could require closing immediately following loan approval). Two of the several reasons you want to see HOA documents relate to dues not paid and architectural committee inspection results. Both convey with the property if not caught by the new lender or remedied by the current owner.

We found out that there was a $2,200 dues arrearage and $1,500 worth the exterior maintenance to be completed. Before closing, we required a seller credit for same.

This is just one hideous example of what is happening to buyers in short sales. I almost forgot to mention: there was another provision that stated that the seller could terminate the contract at any point prior to closing without cause (like if they receive a better offer). The purchaser would have no recourse and waived all rights to sue for performance or recover fees and expenses paid to date. The only recognition would be to refund the purchaser’s earnest money deposit. No reimbursement for any inspections, appraisal. survey and other related fees.

Many of these deals are really complicated. I would urge you to work closely and carefully with all of your agents, not just the ones who know another language better than they know English.

Are my agents just picking the wrong properties or are any of you having similar difficulties?  Where do you draw the line in giving up purchaser contract rights? Any success stories or other examples we need to watch out for?

 

 

Dave Rosenmarkle

Broker Owner

Highland Realty

Arlington, VA  22202

 

davidrose@mris.com

www.HighlandAgents.com