Author Topic: Any Short Sale Experts Out There?? Need Help Fast, Please.  (Read 7107 times)

Dicey

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Any Short Sale Experts Out There?? Need Help Fast, Please.
« on: July 22, 2013, 07:44:09 PM »
Fast facts: We have been in escrow to buy a home via short sale for six months.
Primary loan servicer became Ocwen about two months into the process. One word: NIGHTMARE!
If it matters, we are all-cash and this will be our primary residence. Also, per two recent appraisals, we are paying current market value for the home, but less than the seller owes.

We are finally about to close. Title Co. is trying to collect a "Short Sale Settlement Fee" of $1500.
We have never seen a good faith estimate, so this is quite a shock. Anyone have any suggestions? Do we have to pay this? We're supposed to close this week, so a fast response is appreciated!


olivia

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #1 on: July 22, 2013, 08:02:46 PM »
Do you have a realtor?  I would ask him/her about the fee.  I've never heard of a title company charging that much, it seems bogus to me.  I would push back big time and see if you can use a different title company if they won't budge.

dragoncar

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #2 on: July 22, 2013, 08:29:35 PM »
Sorry don't know the answer to your question.  But it seems to me that "market" is too much for a short sale because of exactly the hassles you are currently enduring. 

Is your market rising wildly?  Perhaps it's worth it to just suck it up and pay. 

Another Reader

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #3 on: July 22, 2013, 09:29:31 PM »
Is there a second mortgage?  Is that the payment the holder of the second lien requires to sign off on the short sale?  Or did the seller hire a short sale negotiator?  If the seller hired a negotiator, you should review the contract to see if you are required to pay the negotiator's fee.  That's fairly common.  If you are paying cash, you would not receive a good faith estimate.

SnackDog

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #4 on: July 23, 2013, 01:59:13 AM »
Don't pay it!

Dicey

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #5 on: July 23, 2013, 06:48:48 AM »
It's been a long time since I posted here on the forum. I just realized I'm in the wrong category. How do I move this question to the real estate section? Thanks and sorry for the returning rookie mistake.

cynthia1848

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #6 on: July 23, 2013, 07:53:31 AM »
I would see if you can find a real estate attorney quickly, and have him/her negotiate.  He/she will have seen this many times before and best be able to advocate on your behalf.

Rebecca Stapler

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #7 on: July 23, 2013, 07:56:15 AM »
If you can't talk to a RE attorney today, stop by your county's legal self-help center and see if they can point you towards the answer to this.

Another Reader

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #8 on: July 23, 2013, 08:11:08 AM »
An attorney will cost you more than the fee.  If it is on the HUD-1, you probably agreed to pay it.  Read the contract, including the addenda.  Not sure what a short sale addendum has on it in NorCal, but in Phoenix, hiring a short sale negotiator and requiring the buyer to pay is common and the contract wording will appear on the short sale addendum.  Your agent should be able to explain the fee in one phone call if you can't find the explanation in the paperwork.

arebelspy

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #9 on: July 23, 2013, 09:44:44 AM »
Step 1: Find out what the fee is.

Call your Realtor, the title company/closing attorney, etc.  Have them figure out what it is so they can explain it to you.  Don't accept "standard fee" or anything like that.

Step 2: Post back here more details. :)
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Dicey

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #10 on: July 23, 2013, 10:51:01 PM »
Thanks ARS, here are more details...
The exact verbiage on the Estimated Settlement Statement is as follows:
"Escrow Fee  SHORT SALE SETTLEMENT FEE" ... $1,550.00.

I called the title agent and she says that this is merely the "standard escrow fee" for this type of transaction. Bullshit or not, I can't yet say. My realtor/broker, who I trust and have been personal friends with for many years, is away today, so I haven't spoken to her. This whole transaction has been such a grind on everyone that I try not to bug her when she takes a rare day off. Just for fun, the 2010 CLTA/ALTA Homeowner's Policy clocks in at a whopping $2,308.00 Gads!

Another Reader

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #11 on: July 23, 2013, 11:13:19 PM »
Is the title company one that deals exclusively with banks?  I had fee issues with a couple of those when I was buying short sales and foreclosures.  They tend to be divisions of well known title companies and are never local to the property so they don't understand local laws and customs.  They can charge whatever they want because the seller picks the title company in these sales and negotiates a cut rate bulk price.  That leaves YOU as the profit center.

dragoncar

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #12 on: July 24, 2013, 12:19:24 AM »
Splain something to me.  So when you make a cash offer, you enter a contract to buy but you have no idea what kind of crazy fees the title company might charge?  Or do you put some kind of cap in your contract?  What's to stop them from charging, say $10k, $20k, etc. and basically force you to lose your deposit?

arebelspy

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #13 on: July 24, 2013, 08:50:30 AM »
Here is the Title Charges from the HUD-1 from my last short sale.

Quote
1100. Title Charges
1101. Title services and lender's title insurance $ 512.00
1102. Settlement or closing fee to North American Title Company $ 280.00
1103. Owner's title insurance to NAT and NATIC (from GFE #5) $ 615.00
1104. Lender's title insurance to NAT and NATIC $ 182.00
1105. Lender's title policy limit $ 73,500.00
1106. Owner's title policy limit $ 98,000.00
1107. Agent's portion of the total title insurance premium to North American Title Company $ 701.36
1108. Underwriter's portion of the total title insurance premium to NATIC $ 95.64
1109. Out of Office Signing Services $0

I only paid the $512 and $615.  Feel free to compare that to your HUD.

Again, talk to the title company and insist on knowing what that charge is for, and yes, wait for your agent to be back in town.

In the end it may just be a bullshit charge, and in the end you may just have to pay it (it could be neither of those, both, or one or the other, they do not necessarily go together).

But look into it for sure.

Hope that helps!
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jrs

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #14 on: July 24, 2013, 10:32:37 AM »
... to buy a home via short sale ...
..."Short Sale Settlement Fee" of $1500...

Just an uneducated opinion, but it sounds like that should be the responsibility of the seller.  Not the buyer. 

Dicey

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #15 on: July 25, 2013, 12:14:12 PM »
ARS- Thanks for this great list. I wonder if these prices are a function of the selling price of the house. Since we are paying a shitload of money (gasp - we can't breathe and the taxes will be HOW MUCH?) for this home, it could be proportionally the same as yours was.

Update - I sold my previous home in April 2013 for about 2/3 of what the new home will cost. I just found the box with the relevant documents in it and surprisingly, the charges were about the same. Maybe everything's just more expensive here. You'd think I'd be used to it by now.

Thanks to everyone for their input. After six months of waiting, we will probably just hold our noses, pay it and move on...

P.S. Yes, this new house is costly, but it will suit our family's needs for the next ten years or so. Bonus: it is three blocks from my husband's work. Woo-hoo for being able leave the paid-for vehicle parked in the garage! Less gas, less insurance and a little more exercise, hooray!

Dicey

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #16 on: July 25, 2013, 09:01:50 PM »
Thanks for moving me, ARS. You were so smooth, it didn't hurt a bit!

arebelspy

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #17 on: July 25, 2013, 09:22:46 PM »
lol.  No problem.
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tryan

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #18 on: July 26, 2013, 03:25:04 PM »
It's YOUR insurance ... pick another carrier.

jpaint

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #19 on: July 30, 2013, 02:03:51 PM »
Part of the confusion is that you said the Title Co was charging the fee, but in your later post, you said Escrow Fee. Title and Escrow are separate functions. Since it was actually the escrow company charging the fee, it's good to mention that escrow companies typically charge a flat fee + a dollar amount per $1000 of purchase price, so higher the price, higher the cost.

Dicey

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #20 on: July 30, 2013, 09:37:21 PM »
Hi jpaint,
The statement from the TITLE company specifically says "Escrow Fee...". Perhaps the functions are bundled for billing purposes in my neck of the woods. Good info on the price/cost ratio, thank you.

And yes, this does mean that we're still waiting for the damn thing to close.

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #21 on: August 03, 2013, 10:56:17 PM »
Hi Diane,
I may be a bit late replying, but I thought I would just add my opinion in case you still need help.
I am a real estate agent in Florida and have worked with many sellers and buyers of short sales.  So, I can tell you how fees are charged for short sales here.
It is common in this area for a representative from the title company to process/negotiate the short sale with the seller's lender, and in return for this they charge a settlement fee of $750-$2000, instead of a "typical" settlement fee to the seller for non-short sales of $250-$350, due to the extra time involved in processing a short sale.  And, this fee is charged to the seller's lender, not the buyer, and if the seller's lender does not pay the full fee (which is fairly common) the title company accepts whatever the lender is willing to pay them. The title company would charge a separate settlement fee to the buyer of $250-$350 for any transaction regardless if it is a short sale or not.

I have seen some real estate agents and/or their sellers choose to hire an independent 3rd party to negotiate the short sale with the seller's lender, and in these cases, there is typically a charge to the buyer of $1000-$2000, but this (should be)  is stated upfront, and there is an agreement signed by the buyer, which is typically required to be signed at the time their offer is submitted for consideration.

In Florida, the owner's title insurance policy is paid for by the seller (or seller's lender for a short sale), so for cash buyers, the only settlement/closing fees are the settlement fee of $250-$350, plus the cost of recording the deed, approximately $20.  The party responsible for paying the owner's title insurance policy varies from state to state.

As someone else stated previously, please check with your real estate agent about this charge, and also check the documents you signed during the transaction to see if there was something in there where you agreed to this charge.  If you did not agree to a specific charge for a short sale settlement fee, and if your agent does not believe that $1500 is a standard settlement fee in your area, then I would suggest you ask your agent to dispute this charge on your behalf.

Good luck :)


Dicey

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #22 on: August 12, 2013, 10:27:41 PM »
Quick Update: We finally recorded last Monday. We are now frantically painting, repairing, modifying, etc. so we can move in asap. We are still waiting for our Final Final closing costs, as I refused to pay some random fees such as "overnight" charges. I estimate that we came in at about 1/2% of the purchase price. It is what it is, and at least the damn thing has finally closed. Thanks to everyone for taking the time to offer your expertise.

Word to the wise: If you're considering a short sale, prepare to have plenty of patience. And if OCWEN is involved in any way, run, do not walk, in the opposite direction.

arebelspy

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Re: Any Short Sale Experts Out There?? Need Help Fast, Please.
« Reply #23 on: August 13, 2013, 01:06:42 PM »
Congrats! 
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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