HELP! i'm trying to purchase a property that is bank approved short sale for 540,000

Asked by Karen, Jersey, GA Thu May 29, 2008

the sellers agent is telling us that in addition to the 540,000 we will have to dish out 55,000 for some insurance bill that needs to get paid. basically the contract will be for 540,000$ and the 55,0000 they want at the closing? can any1 please tell me if this sounds legit?

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Sharon Kozinn, Agent, Hillsdale, NJ
Fri May 30, 2008
Dear Karen,
You need to speak to your attorney, If they are not very experienced in handling short sales, you need to find someone that is. They will be able to guide you through the legalities and obligations of this sale.
Good Luck.
Sharon Kozinn
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Diane Glander, Agent, Spring Lake, NJ
Fri May 30, 2008
It could be a back insurance bill they are referring to. You will need clarification. I've heard buyers and./or their agents getting stuck for back water bills at closing, but never insurance. I'm sure it is the same principle. Have your agent and attorney get clarification. Your attorney can advise you best as to your liabilities which will depend on your sales contract.
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Pacita Dimac…, Agent, Oakland, CA
Thu May 29, 2008
I'd consider this to be a big, RED flag.

Do you have a copy of the preliminary title? If you are using a realtor as your buyer's agent, that realtor can call the title company and request a copy of the preliminary title which should provide information on the liens against the property. Additionally, the title company may also have copies of the latest notices (of default, notice to sell at auction, etc) so that you will be up to speed on its status.

For most short sales I've written offers on, the lender clears the liens, pays for the selling expenses. So for you as the buyer to be asked to pay off an outstanding bill on a short sale sound fishy.
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Gina Chirico, Agent, Fairfield, NJ
Thu May 29, 2008

Do you have your own agent or did you use the listing agent? Either way, you need to immediately request a copy of whatever "insurance bill" they are claiming you must pay. Is this the first time it has been mentioned? How far along are you in the contract? Did you conclude attorney review? Was it brought up during the attorney review period?

Sometimes short sales will state in the listing and/or require the buyer to obtain the CO (Certificate of Occupancy, I've even seen some say that buyer is responsible for any open permits) but an insurance bill?? What type of insurance?

I would definitely demand documentation and speak to your lawyer about ASAP.

Good luck and please post updates as so many people post questions and we all give answers and I'm always curious as to what the outcome of the issues are.

Gina Chirico, Sales Associate
Prudential New Jersey Properties
West Essex Regional
973-239-7700 ext 132
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Jill Ofer, Agent, New city, NY
Thu May 29, 2008
Insurance, for what?
Jill ofer
new York
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Frank Diaz, Agent, Honolulu, HI
Thu May 29, 2008
Where is the insurance bill? Have you asked for a copy?
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