My group and I always check court records before we go into contract for a short sale. Even better, we never try to go into contract on a short sale and find is best to go for a REO or a regular sale.
Hope this helps!
Real Estate Broker, REALTOR Â®
Short Sale Foreclosure Resource â€“ SFR
Five Star Institute REO Certified
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"There are no perfect men, only perfect intentions"
Unfortunately, this happens. The agent now has to negotiate with the 2nd lien holder to get a pay off order then they have to submit that order to the 1st lien holder to see if they can pay it. If not the agent will of course see if the Homeowner can come up with any funds to take care of it or they may even ask you to contribute to pay off 2nd lien. The property cannot close until that 2nd lien is satisfied; if you can contribute to get the 2nd lien satisfied then you should not be worried; if you cannot contribute to get the 2nd lien satisfied then you should be worried. Hopefully, another player in the transaction will be able to resolve this 2nd lien.