Reserved Parking For "The Lovely Wife"...TLW...ROAR!

Hun (Blog Boy)...

I guess I'll have to wait to shop for all those size seven clothes I am going to need.

Are you absolutely sure you want me to gain weight? At this rate it might be a bad idea. We should re-think that. 

Oh. Before I forget please don't tell Lenn I really did eat that entire box of brownies by myself :)

P.S. Hmmm. I bet in light of the circumstances I sound somewhat self involved. Well, I am. It's good to be alive and able to be self involved :)

TLW...ROAR!

Wow.  Great blog post Brian, can you specify exactly what you mean by back up contract.  I am very uneducated about the short sale process.

All that work for nothing. Poor seller, poor you.

Hello BB, we're all going to inevitably be there if you haven't already.  Aligning yourself with a loss mitigation expert is the only way to go.  Thanks for all of your posts!  Well, not all. 

Interesting. 

In our contract, the buyer is permitted to pursue secondary mortgage approval.  However, if they fail to cooperate with the primary lending source, the one with which the seller accepted the contract, they lose their earnest money.

This is a default.  A buyer cannot simply "change lenders" unless the seller, by addendum, agrees.  Once the buyer failed to pursue financing with the first lender they defaulted. 

In that case, the seller would not sign a release and the buyer would not get their earnest money back.

The fact that they changed loan types is a further default. 

That's why we have financing clauses in our contracts.  Sounds like neither the second lender nor the buyers' agent knew what they were doing.

Of course, I know didley about Florida contracts.

Feel so sorry for the seller. To be so close and have everything fall apart.

I'm definitely not an expert on short sales...in fact...I just closed a bank owned property (different) and just got the hang of doing that....with the bank not doing much of anything.

One thing is for certain...After reading Lenn's comment....:)  I most likely would include additional contingencies to ensure that the buyer doesn't go shopping all over and miss the boat...without paying a penalty with their earnest money deposit.

We have financing contingencies in our contract to begin with but it seems everyone is wanting to shop around right now....with limited options for loan programs...I can't figure that one out. :)

BB all I can say is that just plain SUCKS!

Oh man, That sure does suck. Why did the buyers change mortgage brokers to begin with?

Sean Allen

What a crying shame that this seller had to lose her house after waiting through months of what appeared to be an approved buyer to end up defaulting!  Frustrating with a capital F for all involved.

BB, in todays market, doing business is a PIA.  I do not know why your borrower changed agents/products but most of the time they are trying just to get the best rate, not service.  And on a short sale, you need team work. AJ

So much work, it's so frustrating.  No one wins them all, it is just the nature of the business, on to the next.

So much work, it's so frustrating.  No one wins them all, it is just the nature of the business, on to the next.

Lenn, The buyer is indeed in default and the seller has made claim against the deposit. Please remember I am dealing with a property worth 100k and a $2,000 deposit. Just finding a buyer willing to purchase a short sale in my market is very very difficult. As much as it sucks they hold most of the cards. Your market and my market are worlds apart. The seller MAY get the deposit but only if the buyer agrees to sign the release. If not that deposit will rot in escrow with the title company. But none the less my sellers house has been sold at auction.

AJ, The buyer was working with their own agent. I didn't know they had changed lenders until they already had. They changed due to costs. Turns out the 2nd lender sold them on being able to do 100% financing with USDA even though it couldn't be done on this property. The buyer walked because they were jerked around by that side of the transaction. As a listing broker I have to rely heavily on folks being straight forward with me. In this case I'm pretty sure they weren't.

Lynn, Frustrating indeed!!!

Sean, I believe they were getting advice(bad) from too many people. It's obvious their agent did not have control of the situation.

Bill, SLURPS the big one..

WooHoo, Sounds good in theory. But in my market right now the buyer can just go find another  housing. We have almost 3 years worth of inventory. Plus it's just track housing. They all look the same. 

Sandra, I actually sold the seller this house back in 2005. It was my listing at the time. They bought it to flip and they lost.

Kevin, I think there are many parts of the country that have a hard time understanding how bad it really is in some areas. Our values are down 60% in 18 months!!! And we have a 15% foreclosure rate. It's a completely different ball game.

Hi Beth, It sucks.

Robert, A back up contract is not specific to a short sale. What it is though is a contract in a 2ndposition. For example, even though a seller has accepted a contact from a buyer they are still able to negotiate and accept additional contracts. These contracts would be contingent upon the first contract not closing. The seller would have to honor the terms of the first contract. BUT...if for some reason the first contract did not close the 2nd contract would come into play. It was very common during the boom to have back up contracts. Basically more than one buyer wanting to purchase the same property and negotiating a deal with the seller. It's a great position for the seller to be in. Did this answer your question?

Miriam, All we can do is try to learn something and then move forward.

BB,

If you're winning more than you loose, you're ahead of the game. As for becoming an expert, not a chance for me. I avoid these things like the plague. We're finding that the majority do not go through when working with a buyer. As for a ss listing, maybe 50/50 if everyone is co-operative and very lucky.

BB - We continually accept backups on our shorts in my office.  I had a property just recently that had 13 contracts on it. 

Sucks all around to not close, but sucks worse knowing you (or seller) spent money on that pool cleaning and didn't reap a return!

btw, that's also the first glowing report of a wells fargo transaction that i have ever heard.  If I get another one, I'll be begging you for your contact info!

Well that really sucks!  Sorry for you and for your seller.

Hi BB, I have one listing that will be a short sale. I hope everything works out well with it. Sad when one falls apart before a closing. You have my sympathy.

Bryant,

Thanks for the post. Sometimes you go to the wire and the extra distance just isn't enough. The lenders take an inordinate amount of time to agree to a short sale and then want it closed immediately. Your extensions were a blessing. However, every now and then things happen beyond your control.

What sad story to go through all the work and get nothing and the seller has to give it back to the lender. Sorry for you.

BB - That makes it even worse! Had a former client who is in trouble call me today, it is breaking my heart.

That is so sad. I hate it when that happens. I'd say that 80% of my short sales has to go through 2 offers (due to buyer's flaking out or not get financing) and about 50% of them have to go through at least 3 offers before it finally closes. I feel like we should get paid 2-3 times. But of course not. So sad that your seller lost their house. It seems odd that the fc/auction wouldn't have been pushed back with a closing coming up. Too bad.

BB, no I won't be a good short sale real estate agent. Now that I know that this type of transaction somehow blew TLW's spending money, I'm simply going to get good at bank owned.

CRAP!!

BB, on this one it sounds like you gave it your best shot.

It is very frustrating to work so hard only to have some banks really not have their act together, but then again that is one of the reasons they are in trouble isn't it?

Hi BB,

Sounds like you did everything you could to try and save this one. I went through 3 buyers on my last short sale before we got one who was willing to go the distance. The bank was actually waiting on an offer from us, we closed in 22 days! Not an expert yet but working on it. :)

BB- I feel for you, I had a deal go south today too. I might be facing my first month without pay if I can't resurrect it. :( 

By the way, that pool is the same color as TLW's toe!

TLW: You're worried about a size 7?  Goodness..how short  tall are you? Okay...I'm just trying to justify why my height at 5'6" makes a big difference in why I am able to eat a bunch of brownies like you LOL!

BB: Three years????? Wow. 

I ache for your sellers. 

BB,

You are a professional with an admirable work ethic - it is frustrating that loss of control over the outcome of your hard work as well as the effect on your customer or client.

(I am a control freak and short sales make me insane.)

BB, I have yet to jump into the arena of short sales but planning to do so soon.  Thank you for the advice.

Short sales are the smelly armpit of real estate that's for sure.  It sounds like your bank was on board and they are usually the problem.  I'm sorry for your seller and I hope she realizes you did all you could do in this situation.  It looks as though the buyer had cold feet and was looking for an out.

Bryant - What a disappointment!  I empathize... You did your best. Next!

That is horrible! I hate them too. I'm fighting right now to hold a commercial sale together...that should have been a piece of cake. It is sooooooooooo frustrating and nerve wracking. I know the sellers are heartbroken also. NEXT TIME! GBU!

BB - I haven't had a short sale yet, but I had better start learning about them, because I want to service my market area and the chances are that this will occur at some point.  I'm sorry to hear about the loss of your sale at the last moment.  How sad for your sellers and you. 

BB,

I have a similar one right now going on 4 months because of the banks stupidity and loss of everything. Now we went to court and the attorney suing didn't show up which was great but that still doesn't mean they can't call it in tomorrow. Now we just lost two buyers. We got the verbal approval on Thursday. I rush to call the first buyers agent...he seemed like it was possible to get the buyer back but until we get the written approval we ain't doing squat. Meanwhile as of Friday...no answer...no buyer...no nothing.

Hey guys. Thanks for stopping by. Short sales can certainly be a big pain in the rear end BUT as a listing broker I have no option except for to get better at them. They are a HUGE part of my market and I feel will become much more prevalent with the "bail out package" that was passed.

Plus there is a really good feeling that comes with helping a seller out that is in this position. Working short sales is very satisfying.

Now when I'm working with buyers I do not like short sales at all.Mainly because I don't have control over the transaction. So I certainly understand why buyer's agents do not want to show them. The solution of course is for me to price them low enough that they are too good to pass up AND to get a reputation of being able to get them approved.

Neal, You have to real careful that you have written approval PRIOR to letting the buying side know it'd been approved. I know from experience that the approval may come back with changes made from what was submitted. For example...closing costs contributions and commissions. 

Bryant:  This sucks!  It's not too often you get the approval from a bank only to have things fall apart on the buyers end.  Better luck next time.  And good for you for not letting this get you down.

Wow! That really does suck. I have just started my First Short sale  and have be nervous about it from the first page. It began with working on the much needed package from the lender, surprisenly after getting all the signed paper work from the seller i was able to get the first round of paper work by 1pm today. That was just 4 hours of going back and forth with people and being put on hold. Luckily my office is the corporate office also and I have 2 principal brokers to assist me that both have been in the business over 30 years. I basically need my hand held for a time until i get a better understanding of these. We were working with other companies that did more of these but have found that we might as well start doing them ourself here.

Great to read your blogs agian Bryant.

BB - Well there were some valuable lessons for all of us in your post. As they say, it ain't over til it's over, or one of them variations on the them. Much appreicate the learning but feel badly for you, your client, AND TLW!

Jeff

BB- I am getting my first lesson in shorts sales currently.  Thanks for the story and I'm so sorry for you and your client.

This seems to be happening all too often!  It's really sad that a buyer missed out on a great opportunity and that the seller's went into foreclosure :(

Oh Broker Bryant!   I am so sorry- I strongly dislike when we have done right and it still goes horribly wrong.  But as you said- you win more than you lose.  Your market is in serious trouble.  It is a little better in this part of Osceola county I am happy to say- but we still play "Beat the Bank" every so often.

I've negotiated many short sales and everyone is different and it all depends on who you get at the bank from my experience. To date, I've only lost one to auction and I found out it was because the bank had an insurance policy and were never really planning to let it go to a short sale in the first place.

BB - Short sales are extremely challenging... even when they work out.