Posted on Sep 27, 2012 in Roseville and Sacramento Short Sale FAQs

Hi, this is Mark Peek with Keller Williams Real Estate, your short sale specialist for Roseville and Sacramento. I wanted to talk today about negotiating the short sale when you have a HOA if you’re in a planned unit development. What do you do and how do you handle that? It’s different from if your property is outside one of these associations.

One thing that we’re seeing a lot of is these HOAs putting restrictions for the number of investors or non-owner occupied buyers that can own these units. The most common number we’ve seen is 15% maximum; so at minimum 85% of the homes have to be owner-occupied. There’s good reason behind this because they want to ensure that there’s good pride of ownership in the community because it keeps property values high and owner-occupants pay the HOA dues more than investors. Right now in this market we’re getting multiple offers on properties so one of the things we need to do if we have a property in an HOA is find out what kind of buyer it is and if they will qualify through the HOA. The HOA is also a decision maker in this process as well because they’re on the title. What we don’t want to do is get an investment buyer approved for the short sale and then find out they can’t qualify to be an owner because the HOA has already exceeded their maximum amount. If this happened, you would have to start the short sale process all over again.

Another issue with HOAs is that some units don’t always qualify for FHA financing, so an HOA may not approve the offer if they’re not on the HUD approved list. These are just some things to consider if you are interested in doing a short sale. If you have any questions on whether or not it’s a good decision to do a short sale, try out the short sale calculator on my website. It gives you a nice picture of whether or not a short sale might be the best option for you or if you should stay in your home.

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