Tulsa Home Sellers – know your mortgage payoff
I recently had a real estate transaction go sour because the Tulsa home Sellers did not know their mortgage payoff. We literally negotiated the contract and almost had everything signed before the Seller fessed up to her Realtor.
The Tulsa home Seller had taken out an equity line of credit, which is equivalent to a 2nd mortgage. She did not realize that this had to be paid off before she could sell her home. Additionally, she was four months behind on mortgage payments, which her Realtor was unaware of.
Sellers, if you are in trouble, be honest with your Realtor. From day one when you list your home for sale, you should discuss all selling expenses, your mortgage balance and what you may net from the sale – or the amount you may need to bring to closing.
And if you do have an equity line of credit, please disclose that to your Realtor also. The collateral for that line of credit IS YOUR HOME, so obviously you have to pay this off along with your mortgage before you can convey clear title.
Tulsa Home Sellers – know your mortgage payoff
Sadly by the time we discovered all of this, the bank had already begun foreclosure proceedings. Even with both Realtors chipping in and my Buyers increasing their bid by $2,000, this still left a deficit of $9,000 which the Seller could not come up with. The bank chose NOT to work with us and proceeded with the foreclosure process.
I understand that Sellers are embarrassed when they are upside down on their mortgage or behind in payments. But, it does no good to bury your head in the sand. Your Realtor is there to guide you and represent your best interests. Tulsa home Sellers – know your mortgage payoff and communicate that to your Realtor!
If the Realtor in this situation had known about the equity line of credit and the missed mortgage payments, she could have been communicating with the bank about a short sale. A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts. While it’s still a hit on your credit, it’s less damaging than a foreclosure.
So, before you list your home for sale, know in advance the amount you might net or the amount you might owe.
Content written and published by Lori Cain.
