This transaction was with an adorable couple with 2 adorable kids who were fun to work with, but, boy, I tell ya, this transaction was CRAZY with a capital C-R-A-Z-Y!!! It’s a pretty long story if I were to tell it play by play, but I will keep it as to the point as possible.
This home was listed as a ‘normal’ sale on MLS for $899,000 and actually offered incentives to the buyer, if you can believe it, which you won’t, when you have finished reading this story. $899,000 was a low price for this home, so they got multiple offers, apparently up to $965,000. My clients were not willing to go that high for this home, so we thought it was game over.
I then get a call from the listing agent that they didn’t want to work with the highest offer because they did not trust the buyers and buyer’s agent and apparently that agent has a bad reputation, so the listing agent and sellers were concerned that they were playing some kind of game and then once locked into the transaction, they would pull something funny.
So, they preferred to work with my buyers and I due to my professionalism and reputation in the industry (their words). However, they had gone over the numbers for the seller’s mortgage, property tax delinquency, and costs to sell, and supposedly going with our offer would put them in a short sale position. And, for whatever reason, they preferred to work with us, and proceed with the short sale process, knowing the transaction would close with my buyers and I, then to go the normal route with a higher offer that may end up not closing, in which they would be back to square one.
I talked to my clients and explained this may take months for an answer and there’s no guarantee with a short sale, and in the end, they decided to go for it because they really liked the house and the listing agent said they would even submit the $899,000 price to see if they could get us through for a better deal to my clients for the inconvenience of waiting for the short sale process. Remember, this home was listed on MLS as a normal sale for $899,000 with buyer incentives, not a short sale.
So, we wait, and wait, and wait…it took a little over 2 months to get an answer and the answer was a counter offer at $960,000, great deal for the wait (sarcasm). The buyers said ‘no’ and we countered back. In the meantime, the listing agent and BofA, supposedly did some re-crunching of the numbers and the magic number of $918,000 was apparently the number they needed that would NOT require a short sale.
So, the listing agent called me very excited to give me the great news that if the buyers were willing to pay $918,000 we had a normal transaction and would not need short sale approval. My clients went for the $918,000 and the listing agent wrote up an addendum that this transaction was now a normal sale and not a short sale. And, the short sale addendum was deleted out of the contract. So, everyone is excited, we proceed with the ‘normal’ sale, get inspections, etc, etc.
Well, apparently, there was some confusion on how much the seller owed in property taxes and supposedly, BofA told the listing agent that BofA paid the delinquent property taxes, or at least a large portion of them, but come to find out, they hadn’t paid the delinquent taxes and there was still a huge amount of property taxes due. In fact, the sellers hadn’t paid taxes since they bought the home 5 years ago and the bill was now over $96,000! So, that’s not chump change that can be easily paid and corrected to close our transaction, in fact, it’s a freakin’ deal killer!
So, guess what…we now have a short sale transaction, but a contract that is not a short sale transaction, and in fact, the short sale addendum was deleted out of the contract. And, if the sellers can’t work this out with BofA, they are breaching the contract by not closing the transaction as a normal sale. And, let’s be realistic, it’s impossible for them to close the transaction as a normal sale because they don’t have the money to pay the property taxes. So, the nightmare Catch 22 begins.
To top it off, the listing agent knew there was a huge problem on October 12th, which I actually found that out from the title officer once this whole issue blew up, she assumed I knew about it, but I had no idea. She had even advised the listing agent to adjust the contract back to a short sale because it was going to be impossible to close as a normal sale, and he did not listen.
He did NOT inform me of this mess until 7 days before we were supposed to close the transaction and well after my clients gave their rental notice. I was absolutely livid when I found out that he knew there was a problem for over a month and didn’t inform me. He found out before my clients did inspections and before they gave rental notice. If he would have informed us on October 12th, we could have probably worked something out, but he took us to the 11th hour before informing us of the situation. So, big ‘no no’ to the listing agent for his conduct and hiding this information until the 11th hour. He should thank his lucky stars that it closed.
Well, long story kind of short, we were putting our ducks in a row on what the heck we were going to do to either get this deal to close, or what legal action we would need to take if they didn’t close per the contract, which of course, we really didn’t want to do, but have to protect the clients. And, the listing agent was sweating bullets and working with the VP of BofA to get this transaction closed before it turned into a huge catastrophe. Thank God, he got it worked out and BofA approved the short sale and we closed just a few days after the contractual date.
Now the buyers are excited about being in their beautiful home before Christmas and New Years. Yay!
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