Which Leins MUST Be Paid During A Short Sale
hi quick question,
correct me if i am wrong, but when a homeowner is losing their home via foreclosure and wants to list their home with a realtor, the realtor must legaly add up ALL debt and list in the MLS at the TOTAL is this correct.
EX. Jjoe shmoes house is worth $100,000. he owes $150,000 to the mortgage company, owes $5,000 on credit cards, owes $10,000 on child support. so back to my question: in order for the realtor to legaly list a foreclosure in the MLS he must list at $165,000 to cover all debt. yes or no
any help would be appreciated.
amynewbie
Some people come to closing fully aware that they will have out of pocket expenses and the proceeds to seller will be negative. I can list my house for any price on the MLS with a realtor, regardless of the amount owed. There is no way you realtor would even know what all is owed. Many personal judgements and liens do not show up until the title work is performed, which unfortunately can a bit further down the road.
There is no difference in listing a foreclosure vs listing a "normal" house except that for the disclosures to the buyer so that he is aware of the situation.
Brenda
"Correct me if I'm wrong. The realtor must legaly add up ALL debt and list in the MLS at the TOTAL is this correct?"
Ok, you're wrong. LOL
Legally? That doesn't enter into it unless there is an intent to defraud.
Part of the real estate broker's job is to try to determine the extent of what's owed on the property to assure that proceeds are sufficient to complete the transaction and assure payment of the r/e commission. As Brenda correctly suggests, it isn't always possible to determine what's owed... or predict what will be owed by closing time.
When I counsel real estate brokers and their agents how to list and service a listing in preforeclosure, whether it be a conventional listing, or a short sale listing...
I recommend that several disclaimers be included in the listing agreement's language, including, but not limited to "this listing and/or sale is subject to mortgagee approval... contact listing agent for details"
To answer the question in your subject box, "which liens must be paid...."
the answer is, 'they all must be paid'
For the Seller to transfer clear, insurable title to the Buyer, liens must be satisfied in full, or however they can be negotiated.
[addsig]
"$5,000 on credit cards, owes $10,000 on child support."
Additionally, most all credit cards are unsecured debt so they do not attached themselves to real property. Child support would not attach unless to the property unless it went to court and there was a judgement. Not all debt attaches to the property, especially if you are in Florida and it is homestead. Very few, if any, judgements attach to your homestead property in FL. But once you move out or if it is a rental, then they attach.
Title work and getting clear title can be very confusing and laboreous. I had a closing with a William Smith as seller, and everything in the entire county that had ever been recorded against a William Smith that did not use a middle initial attached to him. It took weeks, affadavits, and withholding money in escrow for two unresolved judgements to get the sell done. Then after closing I had to get the judgements resolved to get the escrow money back.
You can not expect the realtor to be a title company.
Brenda