Getting the 2nd to clear

Mark Yuschak · 2010-02-03T06:18:46-08:00

My wife and I are in the process of trying to buy a new home for us. The house we want is a short sale and the agent has her claws right in the deal and refuses to allow me to negotiate with the lenders....whatever... Until now... The 1st has been approved. But the 2nd will not approve the deal unless the buyers bring an additional $4,500 to the table. I have a REALLY hard time bring $4,500 to the table to make the deal work since I know what HELOCs are used for - to fund personal BS. Me bringing $4,500 is essentially giving $4,500 to pay for their cars, fancy vacations, etc. It's morally wrong, IMO. What are some things I can tell the listing agent, which she can relay to the holder of the 2nd, that will help ease this $4,500? My initial suggestion of having the sellers bring $4,500 to the table didn't fly. I even offered to split it and that didn't fly. The sellers can come to the table with nothing. I represent myself as the buyer and agent and I even offered to waive commissions and she says that won't work either. The listing agent is very difficult to work with on top of all this... :roll:

Jon Holdman

Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes

16y

How big is this second, and how much are they getting?

If you're determined to have this house, you may have little choice but to pony up the extra.

I don't buy the moral argument here. The sellers may have indeed blown the case on fun and toys. But the lender lent the money in good faith. Your moral argument is with the sellers, not the lender.

I have to give you the same advice I've given dozens of others who are trying to buy a distressed property for a personal residence. You've signed up for a mountain of heartache. Go find nine more properties that you would live in, and make offers on all of those. Then you should end up with one of them.

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Mark Yuschak

OP

Residential Real Estate Broker · Grand Blanc, MI · Member since 2008 · 885 posts · 316 votes

16y

I'm not sure how much the second is. The lein holder of the 2nd is requiring $12,500 and first will only pony up $8,000. So, they're looking to the buyer to pay the variance.

Yes, you are right Jon - I take issue with the sellers, not necessarily the lender.

I knew very well what we were getting into when we made the offer on the house 8 weeks ago or so. I work a lot of short sales as an agent for my clients and have never seen the 2nd require the buyers to put up cash to cover the deficiency. This is new to me.

I feel strongly enough about it that I would rather walk away than bring the $4,500 to the table. Makes me furious.

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Scott Hubbard

Rehabber · Tucson, AZ · Member since 2008 · 1k+ posts · 802 votes

16y

If the 2nd wants $12,500.00 and the 1st position is only allowing $8,000.00, how is the listing agent proposing to put this on the HUD1?

Something is missing here.

Secondly, your looking at this from the wrong angle. Do not think of it as your helping the seller. Focus on the value of the purchase. R U getting a good deal?

With an HELOC, the 2nd will likely file a deficiency judgment against the seller since the HELOC was probably more than $80K. Your $4500.00 is not going to ease anyone's pain.

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Steve Babiak

Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes

16y

Originally posted by Scott Hubbard:

If the 2nd wants $12,500.00 and the 1st position is only allowing $8,000.00, how is the listing agent proposing to put this on the HUD1?

Something is missing here.

...

Does RESPA not require that all transaction-related costs appear on the HUD1, including items that are POC? As an agent, you would know this, and you should have the listing agent made aware of this also...

If the first sees more money going to second, the first will demand those funds, or rescind approval, etc.

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Getting the 2nd to clear

Getting the 2nd to clear

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