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What Does The Home Seller Owe?


Written By: Blanche Evans
Monday, January 19, 2015

Buyers are looking for ways to get an edge over sellers. One way is to find out how much sellers owe their lenders on homes for sale. With this knowledge, they can gauge how much negotiation room the seller might have.

In a sellers market, knowing what the seller owes can help the buyer formulate an offer the seller will accept, avoiding an expensive bidding war with other buyers.

In a normal market or a buyers market, the buyer hopes that the seller will accept an offer that is lower than current market value, but high enough to allow the seller to get out of their mortgage debt without bringing money to the closing table.

Short sales are a little different. Short sales are more common in areas with high foreclosures or job losses. Banks have a lot of inventory on hand and are more willing to negotiate but they put the deal under a microscope.

The buyer has to understand and be prepared for a deal to take much longer, perhaps as much as three weeks longer than normal. The seller must prove hardship for the lien holder to agree to take the loss.

There are three ways buyers can find out what the seller owes -- public records, real estate professionals and asking the seller directly.

The amount owed on any mortgage is a matter of public record and can be found at the County Recorder. Buyers can search in person or online, where county records are available. Once they identify the property and lienholder, buyers can see the most recently recorded mortgage information. This may or may not reflect the most current amount the seller owes, but it may reveal new liens that could impact a sales transaction.

Sellers who advertise their homes as short sales may be willing to share information on their liens with the buyer. Because getting a lender to agree to a short sale is in the interest of the seller, the seller is motivated to give the buyer all the information possible to allow a sale to go forward. Many times, a short sale will be advertised with the price the lender has agreed to accept.

Buyers can also learn what sellers owe through real estate professionals. Once a buyer is ready to make an offer, the buyers agent can research the buyers selection for more information. Realtors can access public records quickly and easily through the industrys local multiple listing service MLS, where they are subscribers. Again, the MLS shows only information that has been recorded from the County Recorder, and it may or may not be up-to-date.

Buyers should know that what the seller owes on the home has nothing to do with market value, or what the seller will accept as an offer. Just as buyers wish to make wise investments, so did the sellers when they purchased their homes. But the information can suggest a negotiating range.



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Francis Hoet - Agent with Douglas Elliman