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Kawain Payne,…, Real Estate Pro in Long Beach, CA

Is it wise to write an offer on a SS with two lien holders?

Asked by Kawain Payne, Realtor, Notary, Long Beach, CA Mon Jun 11, 2012

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Two lien holders is not necessarily an issue. The issue is who are the lien holders.
For instance, Bank of American and Beneficial Finance have proven to not play well together in the past. This oil and water combo ends up on the investor 'Watch List" and on the first look plans of 'A-list' buyers.

Representing the buyer places you in the least significant position in the process. As others have indicated, you are at the mercy of the listing agents strategy for resolving short sale situations.
As you are aware, there are no rules in the 'Wild, Wild, West" and agents have created solutions that best resolve the issues they see. Unfortunately, every short sale is different and requires a fluid strategy. The solutions that worked yesterday may not work today. It's stressful and unfortunate by product of a dysfunctional process.

It is a shame that every agent involved in a failed offer truly believe THEY could have solved all issues due to their incredible skill, advanced education, and train of letters following their name. The reality is..."Stuff happens!"

However, if you don't submit the offer, the answer is ALWAYS NO!

As Walter pointed out, the 'super lien' status HOA impose presents an issue the listing agent needs to know how they will resolve. Quite often the buyer will need to resolve this problem with a stack of dollars..

Short sales, aren't they simply DELIGHTFUL!
0 votes Thank Flag Link Tue Jun 12, 2012
Thank Yo so much for your advise!!!
Flag Wed Jun 13, 2012
Sure. From a buyers side, not much difference other than maybe a little more time to wait. It is all on the seller and listing agent. Buyer wont need to do anything different. If you client wants the property, they just need to be prepared to wait a possible few months as they should already be prepped for when making an offer on a short sale. Have no fear and good luck.
1 vote Thank Flag Link Tue Jun 12, 2012
Hi Kawain!
Many short sales with two lien holders do actually close but not necessarily in a timely fashion. Not that any short sale closes in a timely fashion : ) It's good that you did due diligence and found out that there are two lien holders (many agents do not due this) and you can advise your buyers to expect snags along the way and to prepare them for possible delays - - or worse. . . to not actually reaching the closing table.

There are no guarantees for anyone involved in a short sale. Not for the seller, the buyer, the agents, etc. But, it's a different story for the lender(s) as it is they who hold the cards and they can deal out what they want or feel the need to deal out.

Broker Associate, GRI
Lang Realty
9858 Clint Moore Road
Boca Raton, FL 33496
1 vote Thank Flag Link Tue Jun 12, 2012
Hello Kawain,
I would say yes. There are "easy" and "difficult" lenders, but at the end the short sale gets approved. Submit your offer, be patient, and follow through with the listing agent. If listing agent is not helpful, then you need to move on
1 vote Thank Flag Link Tue Jun 12, 2012
Two lien holder short sales are not as big a problem as deliquent HOA dues. Many of the large lenders have an agreement between the two lien holders. The standard appears to be 6% of the outstanding balance to the junior lien holder. My experience is most lenders will not pay anything towards deliquent HOA dues.
Good luck,
1 vote Thank Flag Link Tue Jun 12, 2012
Depends on the time line, if you don’t need to move this year or anytime soon, fire away.

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
1 vote Thank Flag Link Tue Jun 12, 2012
Writing the offer is one thing, having it accepted another. You should advise your client that it's likely going to take between 3-6 months to receive an answer and unless the short sale is already pre-approved by the lender, the chances of it going through are less than 50-50. Do your buyers have the time to squander is the real question.
1 vote Thank Flag Link Tue Jun 12, 2012
Short Sales with two liens are completed every day. Besides having a good agent you need to also be sure your offer makes sense for the value of the home in the market. If the home has any issues be sure to provide supporting documentation as to your justification for the reduction in price you are asking for.

Debbie Good
Realtor Associate
Dorrington Realty
id 01386548
1 vote Thank Flag Link Tue Jun 12, 2012
I concur with Phil.

is the listing agent familar with the short sale process. obtain 2nd lien holder 1st and so it makes the first much easier to know their net and more likely to approve offer.
1 vote Thank Flag Link Tue Jun 12, 2012
Writing an offer has a much better chance than not writing one.
1 vote Thank Flag Link Tue Jun 12, 2012
It can be a little more complex to negotiate a short sale when there are two lien holders but it can certainly be done and, in fact, IS done every day. And if the home qualifies for the government's HAFA short sale program, that is even better.
1 vote Thank Flag Link Tue Jun 12, 2012
Just make sure that if it is a credit union that the listing agent has already requested the banks short sale package. Most of the time they want 10% of the balance as a payoff. For example if the balance is $80,000 they will want $8,000 as a payoff. In most cases with credit unions will not negotiate any thing less than the 10% and they do not care if the property forecloses.
Most banks will accept $3,000 to $6,000 as a payoff. Good luck and don't let that discourage you.
0 votes Thank Flag Link Wed Jun 13, 2012
Sure.. I once closed one with 5 liens and a BK in the middle of it...
Two liens is standard... just make sure the listing agent know what they are dong... and the have the process buttoned down!

Best of luck!

Ron Escobar, MBA
Broker & General Contractor
0 votes Thank Flag Link Tue Jun 12, 2012
Short sales with two lien holders is very common. Just make sure you are working with an experienced short sale agent.
0 votes Thank Flag Link Tue Jun 12, 2012
Most short sales I have been involved in have more than one lien holder. Ask the listing agent questions such as: are you experienced in short sales and who will be negotiating with the bank(s)? You definitely want to deal with an agent that can close the transaction. Good luck!

Dot Chance
CA DRE#01494182
0 votes Thank Flag Link Mon Jun 11, 2012
Thanks Dot,

The listing agent is having a SS negotiator handle the SS. I asked her who the two lien holders are, so far no answer. I will try checking the tax records to see if I can find out who the two lien holders are.

Kawain Payne
Flag Mon Jun 11, 2012
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