This series of posts reviews my experience with a convoluted, so-called A to B to C transaction in which I represent the ultimate buyer. If you are interested in this topic, you may want to read one of the earlier posts first (links at bottom) rather than starting with this one...too much like coming into the middle of a movie.
Those of you that have been following along on this journey will recall that I was very concerned that the bank was getting screwed in the A->B transaction short sale, beyond even what was required by market value. I speculated that they might not care, based on the bird-in-the-hand theory. Then, an interesting twist ensued. Seems the investors negotiated for and purchased the actual note from the bank rather than completing the short sale. Suddenly, they were in the driver's seat. They owned the property (deeded over by the original homeowner) and they owned the note. I was really excited. Although I had my get-out-of-jail-free card in the form of an email to the lender's short sale negotiator printed and tucked into the file, I was relieved not to have to use it.
My excitement faded a bit when I almost immediately received an email from the escrow officer at Bob's Pretty Good Title Company (which, by the way, turns out to be based in Ohio rather than Florida as I initially thought) wanting to know when could we close. Tomorrow would be good for them. Excuse me??? 
Sorry, but the buyers are normal, everyday buyers, not wheeler-dealer investors. They have some due diligence to perform in terms of inspections and so on. Per our contract, duh, you might try reading it. They have been told all along that they would have thirty days because of YOUR requirements, so that is what they planned on. Just because YOUR requirements have changed, ours have not. We'll have to get back to you on that.
Parenthetically, I have been told by someone that does this sort of thing more often than I do (in other words, greater than never) that they wouldn't allow the C buyer to wait until A->B closed to do inspections. They would want all contingencies released before closing out the first deal. If I was representing the B folks, I'd probably feel the same way. What if the buyers walk on the basis of inspection results? Now the clock is ticking, interest on the A->B purchase is accumulating, likely double digit percentages compounding every five minutes or so in my experience with hard money lenders, and they have to find a new buyer. Not good. But not my problem; for whatever reason (amateur hour springs to mind), this requirement was not made in our deal. Fortunately, since my buyers would never have agreed to it.
Picture a property that has been vacant for six months to a year, and you can imagine the subsequent fun 
surprises we had doing inspections. Roof leak. Dry rot in the subflooring. Roots growing into the septic system. Etc. Somehow we plowed through all that with the buyers intact. Did I mention that they love this property? Must be kind of like how some people love an ugly dog. Anyhow, we are FINALLY ready to fund and close when...<more scary organ music>... the ultimate speed bump materializes.
Recall that, in a fit of well-deserved paranoia, we insisted on buying title insurance locally. Seems the title insurance underwriter at our local title company is choking on removing exclusions to the insurance commitment. Picture a python swallowing a hippopotamus. With everything that has gone on in this deal I can hardly blame him. In fact, as I told the escrow officer when she called to apologize, that is EXACTLY why we hired him rather than have Bob's Pretty Good Title Company rubberstamp it on through. His current sticking point is the BK filed by the original homeowner. I will find out tomorrow whether we will close and I can collect my approximately 10 cents/hr that I am earning on this deal, or whether the whole thing has been an exercise in futility a learning experience. Stay tuned. I will come back and add a few lines to let you know the outcome as soon as I know it.
***Update*** Just when I thought we were out of the woods, this deal took another interesting turn. We finally closed escrow last Monday, but only after a series of lies, threats, lawyers, and assorted other mayhem that will require one more post on this subject. Stay tuned!!!
Here are the links to the rest of the series:
Close Encounters of the Late-Night TV Guru Kind
Tinker to Evers to Chance - The Saga of an A to B to C Transaction Part I
Tinker to Evers to Chance - The Saga of an A to B to C Transaction Part II - What About the Bank?
Footnote: Tinker to Evers to Chance refers to three Chicago Cubs baseball players at the time the Cubbies won back-to-back Word Series in 1907 and 1908. Joe Tinker, Johnny Evers, and Frank Chance were a short stop, second baseman, and first baseman respectively, who have been credited with perfecting the modern double play combination. Their remarkable prowess at turning the double play was commemorated in an eight line ditty by newsman and Giants Fan Franklin Pierce Adams that began: "These are the saddest of possible words, Tinker to Evers to Chance..."
P.S. Go GIANTS!!!!!
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