I am involved in negotiating a short sale on a foreclosed property. The bank says no sale proceeds to owner, which is typical and understandable. The owner, a packrat, has agreed to completely clear the house of massive debris (i.e. provide a service) for a fee, which will help her with moving expenses. So this fee is for a "service" (not for sale of the home) and will not appear on the closing forms. Therefore, this owner wants proof somehow that I will pay her at the end. How do I set up an escrow situation for this "fee" payment. After closing, if she cleans house, I will give money. Do I go to a bank? Do I go to a court? Not sure how to set this up. Please help. :)
2007-09-02 03:55:38 · 6 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Also, how much would setting this up cost?
2007-09-02 03:56:55 · update #1
I am assuming that you are doing this to have an easier time of:
1 - making sure the current owner is out
2 - trying to get the house back somewhat clean
3 - make sure the current owner doesn't trash the place before you purchase it
Personally I wouldn't expect #2 to be the reason because you won't get the place back clean. Prepare to have a cleaning crew ready to haul everything out and go to town on the place. I'm guessing that it's either 1 or 3 which I have seen the the past and of these, only 3 is a realistic expectation to have.
As it stands, I don't think you are allowed to have any other contracts with the owner. You cannot provide any cash to them at all. I believe you will need to sign papers to this effect at closing.
That said, you will need to "hire" a friend to clean the house. your "friend" can then hire the current owner to clean the place up. You should have a legal and binding contract with your friend about what is to be expected in cleanup and how much you will be paying him.
Your friend should then have a contract with the current owner stating what is expected from him/her with regards to cleaning the place.
As for payment, there will have to be a level of trust on the current owner and your friend and you. You'll need to reassure the current owner that since you have a legal contract it would be enforceable in court. After that a simple cashier's check drawn BY YOUR FRIEND for payment to the current owner for the amount. Show the check to the current owner so they know it's on the up and up.
Remember to have your friend there for all the dealings with the current owner. You simply introduced two people together for a business deal. You have no financial obligation to the current owner at all.
Good luck with the short sale!
2007-09-02 05:09:16 · answer #1 · answered by Patrick 5 · 1⤊ 1⤋
No money can go to the seller. Period. You need to hire an outside, professional cleaning service and get a copy of the bill to put in the mortgage file.
It is the current owner's responsibility to leave the premises empty of her belongings. You cannot pay her to do something for which she is already responsible. If she does not perform her responsibility, you may be able to contract with an outside company to do this. But you cannot pay her to do this.
After the loan closes, it will go to the post-closing department where the lender will scrub the file to be sure everything was done correctly. About one in ten files also goes to a post-closing audit in some lender shops. Any money going back to the seller in a short sale is going to be a trigger for further examination. You are setting yourself up for trouble down the road.
Plan to have a disaster clean-up crew at the home immediately after closing. Give them instruction to just haul out and trash anything left in the home.
ADDITIONAL
Do not execute a separate contract with her to do this. You will sign a contract at closing that states there are no additional contracts between the two of you. Lenders now take a very dim view of any lies on the closing documents.
2007-09-02 04:06:32 · answer #2 · answered by CJKatl 4 · 1⤊ 0⤋
You have no legal liability nor responsibilty in this. If her stuff isnt out of there when the house closes. Get a dumpster or hire a service and then bill her. She is trying to rip you off. Since th ehouse is being foreclosed only the bank is invovled. You may have to pay for the removal of her stuff but that is a risk you take in buying a foreclosed home. However you do not have to pay her for anything. In fact you can charge her for the costs of removal. So no escrow is needed.
2007-09-02 04:01:40 · answer #3 · answered by Bob D 6 · 1⤊ 0⤋
If it is Not part of the home sales , Then it is Not part of escrow .
This cleaning fee is a separate contract .
Escrow is done through a title company / lawyer and is for the legal house finance issues only ,
Not for the side jobs .
Write up a simple contract that states you are hiring her to clean the place ( and detail your cleaning expectations 'cause it sounds like she has lower standards ) for whatever price you agree on .
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2007-09-02 04:04:05 · answer #4 · answered by kate 7 · 1⤊ 0⤋
i will of course provide my seat to the previous individual. In a bus it fairly is lots crowded, how can the previous individual even pass to the senior citizen's seat? nicely, i'm a toddlers and it does not soreness to stand for a whilst.
2016-10-19 21:42:35 · answer #5 · answered by ? 4 · 0⤊ 0⤋
Consult a real estate attorney.
2007-09-02 04:00:31 · answer #6 · answered by Jeff S 2 · 0⤊ 0⤋