Home > Uncategorized > “To Sign the Note” or “To Not Sign the Note” — That is the Question

“To Sign the Note” or “To Not Sign the Note” — That is the Question


“To Sign the Note” or “To Not Sign the Note” — That is the Question

A Realtor approached our title insurance company 45 days ago and indicated that she had been unsuccessful in getting a Seller’s lender to agree on the terms of a short sale request.  My staff suggested that the Seller allow us to attempt to facilitate an agreement with the lender and the Seller agreed.

After several telephone calls, faxes and emails we were able to successfully reach agreement with the Seller’s lender.  We even got the lender to agree to absorb past due Home Owner Association fees of $31,000.  Not bad for a few days work…

The Lender, however, had a stipulation in the approval of the short sale —- the Seller must agree to a Promissory Note of $6,000 to be paid over 5 years with 0% interest.

When presented to the Seller, he decided that the note is not in his best interest and is going to allow the property to foreclose.  His line of reasoning is that he feels that he is “entitled” to a better deal than the Lender is offering and shouldn’t have to pay for a note (for any amount).

Even though the Buyer only made a total of 5 payments on the property prior to default and even though the lender is willing to relieve the Seller of any remaining debt obligation for this investment property, the Seller continues to feel “entitled”.

If the reasoning was based upon something that would financially harm the Seller or if it affected his credit more turbulently than the alternative (foreclosure), then I would probably be able to see the reasoning.

Oh well, I guess it goes back to the first thing they should teach in real estate school — check your ego at the door! That said, I still don’t know how I feel about this one.  I suggested he speak to an attorney so he can make a decision armed with the most information possible.

This all brings me back to my original statement:  “To Sign the Note” or “To Not Sign the Note” — That is the Question!

Rick Schuster

Licensed Real Estate Broker – 

Jaycee Realty, Inc.
Licensed Title Insurance Agent – Home Guardian Title, Inc.
Licensed Mortgage Broker – Leading Edge Mortgage Corp
20283 State Road 7 – Ste 400
Boca Raton, FL 33498

561-206-2835 – via Google Voice
561-988-2546 -Fax


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