It is our job to help direct the sellers through the process of getting to the closing table and we try to point them in the right direction. Making all the arrangements for the seller is my job and I do it well. When I go on a listing appointment I always ask the seller if they have a mortgage and is there any prepayment penalties on whether they can't sell for the first 2-3 years of ownership or they have the same issue because they didn't realize when they refinanced or they had a penalty as well.
The reason why I make sure I find this information out is from a past experience I had. A few years ago I had a client that had a problem before the closing with her payoff. I always try to get a draft HUD 24 hrs before the closing just to make sure there aren't any surprises. When I saw the HUD 1 I asked the title company why there was an additional $11,000 on top of the regular payoff. They said the client had a prepayment penalty.
I approached my client and she said she was told by the loan officer that there were no penalties. I asked her what happened and she said she needed to get an equity line on their home. She intends she was misled and instead of an equity line the LO refinanced the whole 1st and added the extra to the first instead of just adding a second. She said she never asked for that type of loan. So I asked her if she had it in writing and to check her note. She said she didn't have anything other than the loan officers verbal notification and when I saw her note...it said she had a pre-payment penalty and it was a bad situation. She kept saying said she was misled and that all she wanted to do was take a 2nd ,but as I mentioned earlier the whole first was refinanced instead. When we tried to negotiate with the bank...they refused and the loan officer was no longer working there. Apparently he was fired HUMMM...
I would like to make a suggestion to anyone working in our industry to check first with the sellers. She told me she really had no idea what was happening and it was unfortunately her responsibility to be aware of this but if she had worked with a Realtor® like me the first time when she initially purchased the home then I would have inquired about it and she probably would not have had to clean up this mess and pay the extra money to the bank.
We usually see clients with these types of penalties if their credit is not sufficient and sometimes they have no choice if they need a loan but I think it needs to be specified in more detail when they apply and make sure the consumer understands all facts pertaining to the loan. I had another property that was a referral and when I mentioned this to them they very happy to find out about it before...rather than after. Please remember that this seller was also a buyer at one time and I like to make sure that all consumers are aware if this possible scenario.
It is a shame that when things change in peoples life and they have no choice but to sell...this problem can occur.
As your Realtor® it is my job to help you make sure the property is always ready to show. Don't forget that your critics are just waiting to see your performance. This market is very unpredictable and anything can happen.
If you are thinking of selling your home in Weston Florida....please contact me for all your Real Estate needs.
Neal "The Real Deal" Bloom
Weston Florida Realtor (954)608-5556 or firstname.lastname@example.org
2500 Weston Road ,Suite 103
Weston Florida 33331