The Short Sale From Hell

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The other day I ran into a seller that seems to be trying to conduct a short sale on their own. Good luck! After closing on this one yesterday I’m convinced that trying to conduct your own short sale would be like a surgeon trying to remove their own kidney (I think someone actually tried that once using mirrors. Ugh!)

Short Sale From Hell

After months of working with the seller’s bank and finding buyers I had everything under control until the seller’s bank actually accepted the deal. You would think it would be downhill from there but no! As we moved towards closing the issues started to pop up. Remember, the seller has no money and really doesn’t have a lot of incentive to even consummate the deal since they have other options available to them.

So first of all there are all the parties to the transaction who want to know how they are going to get paid if the deal doesn’t close.  There’s the attorney for the seller, the survey company, and the title company. So I had to personally guarantee their payment – except the title company thankfully never asked for a guarantee and I never really gave the survey company a guarantee but it became clear that they thought I had. Then there are certain up front costs that need to be covered such as the zoning and water certificates. In the olden days the seller’s attorney would pay for these things but not any more. They’ve been burned too many times. I had to pay for the zoning certificate and the attorney did cover the water certificate in this case.

But of course the deal is going to close, right? Wellllll…not when you have a buyer who can’t handle a short buy. So the deal fell apart as I was driving to the closing. Uh oh…I’m out hundreds of dollars.

Fortunately, I had a backup buyer that leaped into action. We got a new bank approval at a lower price and everything seemed to be on track until two days before closing when the water department informed us that we needed a new meter reading, which would take 7 days. We think we could have worked around that problem but, fortunately, Francisco, a very conscientious meter reader (yes, there are some), dropped from heaven.  He called me up the day before closing and told me that he was in the neighborhood and could read the meter if I could get there in the next few minutes. You betcha! He read the meter and when he found out what was at stake called the reading in on the spot. We had an exact bill the same day and I called the water department to recommend that Francisco be promoted to mayor.

We closed yesterday and everyone got paid, except the title company did absorb a $75 shortfall just so that they wouldn’t have to call that %$#^&* at the seller’s bank again. Wise choice.

We closed just under the wire. I can’t go into details but by Monday this deal would have been dead forever.

Gary Lucido

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