My husband's friend wants to sell his condo & wants me to list it, but he is in a bind! Here is the scenerio: He owes about $191k they are selling for $189k, 5yr prepayment penalty (only has had it for about a yr),and he will have to pay agents commission. He has no money to pay the difference at closing. Someone at my office said to figure out the numbers & list it for a certain amount & be firm on asking price, but without even offering an incentive of maybe paying closing costs who would buy it! What other routes are available for him. He purchased this place & his life took an unexpected turn. I am fairly new and I would like some suggestions because I want to guide him the right way.
Thanks.

This really doesn't sound like something you can overcome.

If the fair market value for the house is $189k and you list it too high (to cover commissions, payoff, and PPP) all that will happen is you will look bad when the property does not sell.

Choose your battles wisely...

Don't forget that you as the listing agent are liable for paying the buyer's agent his/her commission. (at least that's how it is in my market). If the seller doesn't pay you (cause they're outta cash), you might have to pay the buyer agent yourself!!

I don't see a way out of this for the seller unless you explore the short sale (which I know nuthin' about!)

plus, keep in mind that if you list it too high for the market, then if it does not sell it will be YOUR fault.

The agent did not do their job, etc....

Don't ask me how I know....

You could always explore a short sale, call the lender and see what they have to say.

What's the market value of the property?

How much is the pre-payment penalty?

How far behind are they on payments?

Have they recieved the acceleration letter with intent to foreclose by the lender?

This definitely sounds like a short sale.
especially if what is owed is equal or more than current market value.

Is this his personal residence or an investment property?

If it's an investment the lender might not allow a short sale because the seller could refinance his primary residence to make up the back payments to the lender.

He could always see if the bank would let him do a deed-in-liue of foreclosure.

NOTE: While short sales are not brain surgery, that are far different than traditional real estate and if you attempt one with out being fully aware of the potential problems, Your husband may have one less friend and you could be seeing how good your E & O policy really is.

It is very easy to mislead a seller if you don't know how the process works. It is also easy to step over the disclosure line and you must know what mortgage fraud looks like when you try to bring a buyer into the loop.

You may be best off referring the sale to someone who actually does them as a normal part of their business. Maybe shadow the process and learn or just get a referral fee.... or just help the guy out be getting him the best and most competent agent you can. don't try to be a "expert" in every area... this is in the non traditional area and your broker may not allow you to work it.

If we are put in that position (client may not be able to pay) we do have 2 options here in Winnipeg.

1) Payment in advance, and I'm told this has been done in my office.

2) If we are caught out, and find out after contracts, but before transfer, we can slap a lien on the house. I don't know if thats been done in my office, but it is a legal option for all brokers in Winnipeg.

Thanks for all your input. I have been talking to someone from my office that works directly w/lenders. I just want to make sure of the options so I can guide him the correct way.