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Sammy2013
Posts: 4
Registered: ‎02-25-2013
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Seller wants 5k relocation benefits for a short sale from me, what!?

Maybe this is a SoCal thing but I've never heard of this in Norcal.  The seller is in a bank approved shortsale and would like 5k from me since the bank wouldn't give him the relocation benefits.   If you're a seller and shortselling, can you really demand to eat your cake too?  I've never heard of this but my agent tells me this is normal. 

 

-confused

Redfin Partner Agent
Adam-la
Posts: 1,895
Registered: ‎03-15-2011
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Re: Seller wants 5k relocation benefits for a short sale from me, what!?

[ Edited ]

Be very careful.   It is unlikely that you can legally give the seller funds outside of escrow.  After all, the bank is taking a loss on the sale and wants to recoup as much money as possible.   

 

Ask your agent why he/she thinks this is normal.   

 

 

Silver Regular Contributor
WheelinDealin
Posts: 561
Registered: ‎01-25-2012
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Re: Seller wants 5k relocation benefits for a short sale from me, what!?

[ Edited ]

I remember signing a form during my shortsale purchase attesting that I did not know the seller personally and had no outside financial arrangements with them to conclude the sale. Never heard of paying a "relocation fee" in a short sale. Sounds like the seller is trying to make a few bucks on the backside of the deal. Do they actually want to put the 5K in the contract or have you pay them on the down-low? I'm sure if the bank got wind of this they would either want the 5K or cancel the deal entirely. The bank is doing them a favor by agreeing to the short sale, the seller should count their blessings and move on. I wouldn't pay it.

Redfin Agent
johnunderwood
Posts: 15
Registered: ‎12-30-2011
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Re: Seller wants 5k relocation benefits for a short sale from me, what!?

[ Edited ]

If that $5,000 is disclosed to all short sale lien holders and agreed to and noted on the final closing statement/HUD 1 you are ok to do so if you choose.  If you are getting a good deal on the home it may be worth it.  However, if the $5,000 in "relocation assistance" is not disclosed to the short sale lenders or part of the settlement charges in the closing statement and is asked to be addressed outside of escrow that is loan fraud and illegal.  You should know that while many people may consider it normal it is against the law and authorities take such matters very seriously when discovered.

 

Also, the prior poster is correct.  You will be asked to sign a disclosure stating that this is an arms length ransaction in that you have no relationship to the seller and are not doing anything the short sale lenders aren't aware of.

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Sammy2013
Posts: 4
Registered: ‎02-25-2013
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Re: Seller wants 5k relocation benefits for a short sale from me, what!?

Thanks for all your responses, it really helped.  My agent was okay with it because he was also the seller agent.  After I used your advice and asked if it would be part of the escrow he backed off and stated he could talk the seller out of it since if we put it on the escrow the bank would have to approve it. I got a really bad vibe and walked away from the deal.

 

Yes, I knew going in that a double commisioned agent *might* be unscrupulous but this raised red flags.

Redfin Partner Agent
Adam-la
Posts: 1,895
Registered: ‎03-15-2011

Re: Seller wants 5k relocation benefits for a short sale from me, what!?


Sammy2013 wrote:

Thanks for all your responses, it really helped.  My agent was okay with it because he was also the seller agent.  After I used your advice and asked if it would be part of the escrow he backed off and stated he could talk the seller out of it since if we put it on the escrow the bank would have to approve it. I got a really bad vibe and walked away from the deal.

 

Yes, I knew going in that a double commisioned agent *might* be unscrupulous but this raised red flags.


Please post this clown's name.   I HATE agents like this that intentionally break the rules and make it harder for me to provide good service to my customers while ensuring their consumer protections are ensured.   

 

How dare he even suggest this as a 'normal' part of the sale.  

Silver Regular Contributor
WheelinDealin
Posts: 561
Registered: ‎01-25-2012
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Re: Seller wants 5k relocation benefits for a short sale from me, what!?

[ Edited ]

As many of you may or may not know "relocation fees" for short sales do exist. But they are generally paid by the bank to the seller. There are also numerous government programs which provide relocation fees to distressed homeowners who shortsale or give up the deed in lieu of foreclosure. Of course these fees are always approved and are in writing. What was going on here is definitely shady and borders on extortion.

Contributor
arvinz
Posts: 28
Registered: ‎11-13-2011
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Re: Seller wants 5k relocation benefits for a short sale from me, what!?

I'm going throught a shortsale myself as the seller and normally the relocation assistance comes from the bank NOT the buyer. 

Trusted Contributor
Philly44
Posts: 142
Registered: ‎03-31-2011
0

Re: Seller wants 5k relocation benefits for a short sale from me, what!?

I had a short sale put in their counter offer that I would pay the seller's legal fees up to the 3% of teh purchase price. I walked. I think the owner was in jail or old folks home or who knows, but it was filled with all his stuff untouched for 2 years. Even the dirty dishes and fridge full of food.

Contributor
tsuyoshi1
Posts: 13
Registered: ‎02-18-2013
0

Re: Seller wants 5k relocation benefits for a short sale from me, what!?

U think that was bad.  I recently cancelled escrow after a desperate attempt to buy a home through a "dual agent."  This guy from C21M ended up trying to force me into conditions of using his "preferred lender" which I declined later once finding out his lender also gave me a sketchy deal.  

 

He made it seem that it was "just" and the only way since I originally agreed, until I found out that I was getting royally screwed.  Not only I wasn't protected as promised, I actually felt THREATENED & PRESSURED by my "OWN" agent!

 

Worst experience ever.  I'm now totally skeptical now of however someone coming across to be frank and sincere!