I hope you all are doing well. I have a question an hopefully some of you can help me. I recently had a closing and I was representing the seller in a Short Sale, it came to the HOA and not being able to get in contact with them. the closing attorney try to contact this people for two weeks to find out if there were any outstanding fees,but they did,t get any response from them. The day before closing they told me that my client had to pay for the 2008 fees, which my client didn't pay, and of course my client said that he had no money, by now is the day of the closing and they contact the buyer and let her know that she needs to bring an extra cashier check for $750.00;money that they will put in a trust account just in case the association was not paid. the association is $300 and, the year in question is 2007. assuming that the seller paid for 2006 because he bought the home in 2006. Now, the bank paid for 2008 out of the closing cost .. Here is the deal; the attorney WONT give me my commission check until they get a response from the association, because they told me that, if there are any fees and late payments, they don't want to be sue. Does any body have any comments or suggestions. Is this legal what the attorney is doing??
Fortunately in my state we use escrow companies to do the closings. I have not seen a situation like that before.
The seller should have properly disclosed the debt to the association.
You would have to contact another attorney for that answer. What did your Broker say?
I'm not an attorney, I'm an agent just like you, so I can't give you advice as to whether it's legal or not. But in my experience with short sales, it is necessary to do your due diligence before the net sheet or HUD1 is prepared for the lender. I always overestimate the "sellers net proceeds" when I send it to the lender for these type of situations, although $750 is a lot of "overestimating". Granted, the HOA fees are supposed to be cleared and paid to grant clear title BEFORE the transfer of the deed, but, in this case, there were no proceeds to pay the fees out of, therefore, I feel the seller is responsible for the fees because they were incurred during the time the seller lived at the home.
I remember in my real estate class, almost 7 years ago now, my teacher had a quote for us he used over and over and over...."REAL ESTATE IS NOT ONLY WHAT YOU KNOW, BUT WHAT YOU SHOULD KNOW" You may get caught paying for this one, but live and learn, and think of it as a doing business daily expense. I just dropped off $100 today to my seller, who also closed on a short sale Tues, who wanted to sell her Washer and Dryer, that was included in the contract. No, I didnt have to, but she was very, very cooperative in the sale!
Good Luck Veronica!
In Maryland, (I can't speak for Georgia), this is legal. In a short sale the agent gets paid last and their commission can be cut to make sure the bank gets what they need and if the buyer doesn't have money to pay it has to come out of the proceeds. Generally here it's split between the two agents. No one gets paid until everything is ironed out. But, I would check with an attorney.
There are a lot of forms and disclosures in florida that deal with this sort of thing. If their is an upaid special assessment the outstanding balance could be larger then you think.
Check with your broker for your states rules. I would think that you would not be liable for your sellers mistakes.
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