I got the second approval letter from Bank of America today…  That’s right, we are on approval #2- same buyer!  This Destin Florida short sale was cleared to close back in February.   But why did that approval fail?  And why is the game "over"?

Strike 1

A few months ago I wrote “Countrywide Approves Short Sale – But Won’t Finance Approved Amount”.  The buyer’s mortgage lender was also Countrywide, now Bank of America.  They UNDERAPPRAISED his purchase of the Destin condo by $10,000, so he could not close for the approved amount. But Bank of America, the short sale department, did not care, and would not work to change the approval despite the fact that their own company would not lend money for the contract price.  They closed the file! We had to resubmit a new package with the lower contract price and start all over.  Insanity, yes, but the buyer really wanted the property. 

Strike 2

After three more months waiting for the “new” approval, we got down to final negotiations.  The Bank of America representative offered three choices before submitting the file to the investor, Fannie Mae:

1.       We cut our commission to 3%

2.       The seller agrees to a promissory note for $8000

3.       Or the buyer increases his purchase price by $3000.

Does that even make sense?  It didn’t to me, so I repeated it twice, carefully, to be sure I heard correctly.  I also told her since it was a Fannie Mae loan, I could not see how they could reduce commission to under 6%.  She re-stated the three options, and I subsequently got the buyer to increase his offer by $3,000. I sent in a contract addendum and a new HUD.

Three weeks later I got the happy call.  Approved!  OOOPS – Not so fast!!  The demand letter had the wrong net on it.  NONE of the past due HOA fees were included.  The net was off by $12,000.

 “What?!  How can this be?!”,  I asked the new negotiator who was now mysteriously working the file.  He told me Fannie Mae will not pay the past due HOA fees in the amount requested unless the seller agrees to a promissory note.  He also said Fannie Mae was limiting seller concessions to 3%. HUHHH???  The first negotiator confused the words "COMMISSION" with "CONCESSION"?  I told Negotiator Two that the previous rep misstated facts and options, and that the HUD that was submitted for approval did not come close to the approved net.  Normally, a HUD does not go to the investor unless it meets criteria for approval. He did not care.  He told me, again, the file will be closed if the buyer does not perform.  And I would have to start all over if we wanted any changes on the approval.

But before we can even get to Strike 3, the buyer walked. Game over!

It's Wendy

Wendy Rulnick, Rulnick Realty, Inc.  Destin Florida

www.shortsales-emeraldcoast.com

www.shortsalesuperstars.com

email itswendy@rulnickrealty.com

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