Seller Says No - But I Have Deed & POA
A seller in preforclosure contacted me. I had her sign "the paperwork" which included a trust, assign of beneficial interest, warranty deed to trusteee, and a power of attorney. She is sharp asked a lot of questions. I did not hide anything and she knew what she was signing. I have not recorded the deed.
Now that we are down to three weeks before the sale, she is not happy that the second lien holder will not settle in full and will go after her with a deficiency judgement. She owed the second 70k and the second wants 65k to settle or 7k to satisfy the lien. 65k prices the home out of the market. Again, the seller is sharp and we discussed the possibility of a deficiency judgement and she signed my CYA letter.
She says that she is not happy because of the deficiency judgment but would sign the papers if she got 7k. Basically she now wants money. She understands that she will get the deficiency judgment also if it goes to sale.
So ... do I just go ahead with the sell using my POA or Trustee even though she does not want to sell .
Brenda
Brenda,
What was your agreement with her at the time of signing papers.
Did she expect to get walk away with with no money and you getting the house?
In case of deficiency judgement, what was agreed at time of signing the papers?
Is the purchase contract subject to no deficiency judgement?
Let us know..
Bginvestor
Quote: What was your agreement with her at the time of signing papers.
That I would do my best to stop the foreclosure and save her credit, but that much of that depended on the banks.
Quote:Did she expect to get walk away with with no money and you getting the house?
I told her that she might be able to get some money, it depended on what the banks would set as a payoff.
Quote:In case of deficiency judgement, what was agreed at time of signing the papers?
I told her to contact a CPA or lawyer about a possible deficiency judgement. That yes it was possible that either bank might issue a deficiency judgment or a 1099 for the difference.
Quote:Is the purchase contract subject to no deficiency judgement?
The P&S contract has no special language concerning a deficiency judgement.
This sounds like a moral or ethical question rather than a legal one. It seems pretty obvious to me that you can proceed to purchase the house.
I am assuming that the $7,000 makes the numbers not work anymore? If not, I might consider it. Don't be greedy. Where did the number come from that the seller wants? Don't know?--Ask!
You may explain to the seller your predicament. Tell her that you don't know what you should do because you and her had an agreement and that you have the power to purchase the house but that you feel like she is taking advantage of your kindness and helpfulness by wanting changing the agreement that she already signed. Tell her that you'll give her the 7k but she needs to give you something of equal value.
Never be afraid to walk away from a deal. You might explain a story that happened "earlier this week" to another couple that you couldn't help and how it hurt their credit, etc. Remind her of how scared she was before you offered to help! Remind her of the bad things that can happen.
You may also try to negotiate further with the 2nd mortgage holder. Say that the first mortgage holder will not accept their offer and that you wanted to let them have another shot at it so that they don't loose their entire investment.
The game is not over yet....Keep trying for that win-win transaction! There is soooo much you can do! GOOD LUCK.
My concern would be are there any legal precedences set by someone verbally revoking a POA. Can it be construed from her now reluctance to sell that the POA is no longer valid and you bought the house w/o her consent? What is the scope of your POA? How specific, how general? Is the property worth getting into a legal hassle over the POA if the seller comes back and sues? Sounds like a hornets nest if you go ahead w/ the sale. I'd get it all cleared by a lawyer and most of all w/ the seller.
Maybe you can confirm this, but it doesn't seem that you have talked this scenario through before signing the papers.
When I do short sales, I always put in my contract that the offer is contingent on the lenders waiving any deficiency judgment. Fankly, I think its unfair expect the seller to take on the deficiency judgement without both parties agreeing to it. In Arizona, it makes a big difference , because if the house is on 2.5 acres or less, there is no deficiency judgement if the house goes through the trustee sale. So in this case, the seller would definitely not want to get stuck with a lien if she could get out of it by just letting the house go.
I understand that you may be in a different situation depending on your state laws.
I guess the ethical question you have to ask yourself is, "After dealing with this person, is she better off than if I did not meet her" If the answer is no, you may lose if she takes you to court.
Good luck,
Bginvestor