So you finally get your short sale approved...now what?

First...I'd like to say that in both these cases below......I was the listing agent and I was able to accomplish my end of the deal.

I've been lucky enough to have a good success rate on getting my short sales approved and these two were no different accept they still haven't closed.

Most agents who know the process of a short sale are aware that they can take an average of 90 days or more to get an answer and that if you are successful in closing one.....you can go celebrate. But there is a new problem with short sales and that's the buyer not getting approved. We as the listing agents can only do so much to keep track of whats going on with the buyer let alone we have enough to do just to get the thing approved. In these cases....we did everything possible to make sure the process was moving a long but the buyers agent and the MB should take some of the blame here for waiting so long before they decided that these "qualified" buyers were denied.

First....we have one with Countrywide. Ah...my friends over at Countrywide just love to play with my mind. They just love to play dead and also play dumb. They love losing your paperwork and I almost feel like they do it purposely just so we would give up and walk. They also love not contacting us or saying they never received our correspondence even if we have a return receiptthat shows someone open our emails. There were other issues we had with them but I won't get into any more details. Was it the janitor tapping into the negotiators email account? Sorry Countrywide but it ain't happening. You'll have to do better than that.

Most agents that have worked with them know that they are probably the hardest lender to close a short sale with. As a matter of fact....we also know they cut our commission. But that's not the issue here.

CASE #1

On this particular deal we had one in contract with another as a back up. One buyer had a qualified letter that they would be putting down 40% and the other 50%. After almost 7 months of grueling work and playing a waiting game...buyer number one backed out because they got sick of waiting and then after I called buyer number two....the buyers agent told me his client backed off due to the economy. So now I lose two buyers and I finally get the price they are willing to take. So then I sit for a week and then we receive notification that the investor agrees to the price and the cut in our commission and that my seller agrees to bring a few thousand to closing. My seller hasn't paid his maintenance...his utilities or his Real Estate Taxes and because he shows he has too much of an income...they want him to bring a few bucks to the table. He agrees.

Now I go back to the agent that represents buyer number one. I tell him I have it in writing and we are good to go. He checks with his buyer and they agree to move forward again. We then have to arrange to have the water and the electricity turned on for the inspection.

Both clients sign an extension to the contract and we are required to close by the 1st of December and we even had the HUD 1 approved. A week before the scheduled closing....we receive an email from the buyers agent informing us that they are requesting an extension until the 15th. They claim their lender is asking for additional documents regarding the buyers business and income and they might have to switch lenders.

I wasn't happy to hear that but we said we would request it. So now Countrywide says "sure...we will grant your request but someone will have to pay $100 Per Diem for each day it doesn't close. "Holly crap!"

And to make matters worse.....as we are reading this email we receive another email from the buyers agent......"I'm sorry but Mr X. has been denied his loan due to only being self employed for less than a year and we are hereby canceling the contract. "Holy Crap again!" So now I've got a listing that took almost 7 months to be approved and now no buyer.

CASE #2

This one was with WAMU/JP Morgan Chase. On this particular transaction we had a lot more issues with the seller but it did move quick and we had an answer in 2 weeks on the price. I'm approached by these homeowners who get my farm letters so they know I've not only sold the neighborhood but this particular model as well. When I meet with them they failed to tell me that they were already 5 months late and they didn't speak English so their 16yr old daughter does all the translation. Then I walk into the home and thereare brown water stains on ceiling as well as a a big giant hole right below where the master bathroom is located. "Don't you think thats a nice way to start out?"

The first thing I asked them is why did they wait so long to call me and they said they had a tenant in the property and they wouldn't give anyone access so they finally got them out. The hole was the result of a leak but it was never fixed. I informed they would probably receive a summary judgment but when I said that....they whipped it out. They had no money and couldn't afford to hire an attorney to go stall the foreclosure. I told them they needed to go down to the court house first and ask someone how to go about getting an extension. I figured it was the only way they had the chance to get a short sale done. I told them I needed time and we didn't have much and that to let me know and I'd be back. They called a me a few days later....told me they got the extension and we were able to list the property on the market.

First we get an offer with 20% down. We get our trusty qualification letter from the buyers agent and bank they were planning on using. We go into contract and we wait. Then we get the news that after my clients sent WAMU all of their bank statements....tax returns...hardship letters etc....WAMU was changed to JP Morgan..."HOLY CRAP#2" Now we call my clients tell them the bank needs all the information once again.

We send it and the lender replies that they received it. 2 weeks go by and we have the BPO done and then the buyers agent calls me to tell me he is going out of the country for 2 weeks. I then ask him for the name and number of their lender so I can call to see where the loan is at. I call and they tell me they have to speak to the processor and will get back to me..."Yeah right" Finally the agent gets back from his trip and tells me the buyer said they had to submit a few more documents requested. The while all this is going on WAMU/JP Morgans second negotiator calls us and tells us the investor agrees to the counter the buyers came back with and that the Realtors agree to the cut of our commissions yet again...this one was even less than the other but I would do what I had to so we can close this transaction.

Then I go to the house and see a notice from the city...it's a violation notice that the owners need to put in new landscaping and if they didn't comply they would be fined $250 per day until it was ratified. They decide to call the city and get an extension.

What else can go wrong now......then comes more bad news......" Neal I'm sorry but the buyers loan has been declined due to lack of enough income." Deal is dead!

I've advised both clients that I'm not an attorney and I'm limited to how much advice I can give them.

Currently I put the home back on the market and luckily we received two new offers one that was submitted.

Here is our next problem.....normally when a short sale dies due to the buyer walking....it normally gets kicked out of the short sale department. On this one we were able to get a few days to produce another offer so we shall see what's going to happen. We've also gotten escalation and with the first case above...our friends at Countrywide have agreed to temporarily stop the Per Diem and hopefully some time to close but so far we don't have any offers on that one. Unless we get lucky...I'm only banking on number two if any.

So if you think it's hard to get the approvals on your short sale listings.......try waiting to see if the buyers can't get qualified. This is going to continue to be a major problem. Even if you get lucky and you have an all cash offer it doesn't mean it's a done deal. The buyer can still back out or even go to Vegas and spend the money....so then what? I'm not ready to jump ship on these just yet...I'll let you know what the outcome is.

For more information please contact Neal The Real Deal Bloom-Realtor® /Remax Premier Assoc.

2500 Weston Road ,Suite 103

Weston FL 33331

(954)608-5556

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