Is it worth it?
That is a question I will be asking myself in the future. It is a question I will ask myself when it appears that I will be writing a Short Sale contract for a client. Frankly, I believe it is a question you might want to ask yourself if your client is contemplating purchase of a home that has been designated as a potential or actual short sale situation.
In February of 2008 I wrote a contract for a long-time client who wanted to purchase a home that was identified as being subject to third party approval in the listing. The home was in Fredericksburg, Virginia. The contract was ratified by the seller five days after the contract was written. A close date of March 31, 2008 had been agreed to. The closing date came and went; no word on contract. In mid-April I was advised by the listing company that the bank had ordered a Broker’s Price Opinion (BPO) and then it would reconcile that with one already done by the listing company. He expected the BPO to take between 7 and 21 days to complete.
About a week later I called again for an update. Also mentioned that I saw that the listing was being shown as Active in MRIS. Was told that we should have a firm answer on the BPO within 24-72 hours. The bank claimed that they did not have sufficient forms signed by the Seller. Listing company sent the forms and allegedly a learned decision could be made.
In early May I spoke with my point of contact at the listing agency. The negotiator at the listing company was looking into the matter since there were two mortgages on the property. Both, coincidently, were with the same lender. Was told that he would call me in the middle of the following week with an update. Since I had not heard anything for 5 days I called back. Later that day the agent phoned me to say that the bank told the negotiator that they had yet to get to the case to make a decision. He explained that the decision makers were very busy and were not depending (like we were) on any particular case to close since they were on salary. Not assuring words!!
In late May received a call from someone at the listing broker’s office asking that I prepare an addendum to the contract changing the settlement date and revising the price to a figure that we discussed. Did it and it was returned to me. The sales price was adjusted because of market deterioration. In early June I received the signed addendum back from the listing agent. BTW, the settlement date was changed to June 30, 2008.
Should I continue? Why not! The revised settlement date came and passed with no word from the listing agency. Not content with the status quo I called my point of contact on 15 Julyonly to hear that the negotiators at the bank had left the employ and that the bank wanted to start renegotiations all over. The listing agency was not for that at all. Told me they were going to get this case resolved by the end of the week and woud let me know what transpired. Guess what? No call.
Spoke with my client and he told me that he wanted me to call the listing agency and tell them that he was going to revise his offer to reflect the current market conditions and gave me a figure. Also wanted them to know that he wanted to settle on July 29th or he was going to consider the contract void.
I relayed that to my POC and he said that the market reflected an improvement and that the previously agreed upon price was too low. Told him that we were considering the contract null and void.
Yes, my friends, after patiently waiting for almost five months to get a contract to settlement, I am frustrated. Will I ever be involved with another Short Sale? Perhaps. But will it drag on this long. Most definitely not. There will be some “drop dead” dates built in and that is for sure. Will the banks be expediting their review of these cases given the shaky condition of so many lenders? I think so.
In summary, Is it worth it?
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