Here are three lessons I learned the hard way this month...I'd like to save you the frustration of re-discovering the answers!
Situation #1: My dreams were almost true...right at the end of an ugly 8-month short sale...one day from closing...a single lender held the first and second...the negotiator was Mr. Unhappy.
We had approval letters, buyer's money was in escrow, they send the final HUD-1...and Mr. Unhappy sees the buyers, John & Jane Doe are taking title as John & Jane Doe Trust...BIG problem...the trust was NEVER approved as the buyer...then Mr. Unhappy notices that the SELLER is holding the property in a trust...the Sally Smith trust...BIGGER PROBLEM...this seller was never approved....the whole deal is dead.
That property was in a trust from the day it was purchased, every document the lender approved had the trust name on it...AND it was the exact name as the seller...but Mr. Unhappy was convinced this was NOT the seller they approved. Mr. Unhappy wanted to re-accomplish the entire contract with the names of the trusts...and re-submit for lender approval. That meant three more weeks of short-sale hell...none of us would have made it through alive.
Solution #1: We took one extra day, deeded the property out of the sellers trust and the buyers took title as individuals...the deal closed one day late...but after 8 months no one cared!
Lesson #1: Pay attention to EVERY DETAIL of short sale approvals...especially the names on title...and when things look impossible...there may be another way...have a cup of coffee and think about it!
Situation #2 Another short sale...four months into this one and the lender pronounces it dead...the second will not reduce a $10K demand for cash from the buyer over what the first will give them...the buyers are told it's a no-go...and everyone is bummed out. This is on the 15th of the month...on the 25th the lender calls back and says they are ready to go...forget the extra $10K...the deal closes on the 30th.
Lesson #2 Just like the rest of us, banks start running short of cash at the end of a month, help buyers understand that NO may not always mean NO.
Situation #3 We are one day away from closing a deal with a real human as a seller (in Escondido this is as rare as hen's teeth). We send the Termite clearance to escrow...they pass it along to the underwriter...Ms. Panicky...who puts a hold on the deal because of a note in the section 2 comments.
Ms. Panicky saw the report earlier...but this time a Section 2 note about a leak under the master tub made her think the house would not meet FHA standards for mold. There was no mention of mold on the Termite report...mold it would have been a Section 1 item...not Section 2 where the leak was reported. A month earlier the home inspector checked and reported nothing...the seller inspected and found nothing and asked the termite company to correct the report...but they didn't make the change.
Solution #3 I called a licensed Plumber who inspected...and certified that there was no mold or leak. Ms. Panicky had to accept the Plumber's report and escrow closed.
Lesson #3 Read every single detail of all reports...even the parts that don't generally matter...look for ANYTHING that could indicate FHA defects to an underwriter. All of the new rules are making them very nervous...if something comes back they lose their jobs...identify potential problems early on and solve them!
OK...hope this saves you a little time and maybe even an Escrow!
Comments(2)