Is the Term Easy Short Sale an Oxymoron?

Managing Real Estate Broker with NextHome Experience 17050

 This should have been an easy short sale. The Owner had reached out to her lender, Wells Fargo to begin the pre-foreclosure paperwork.

Her loan was insured by FHA and she would need to be approved to participate in the short sale process. 

Having been referred to me by a work colleague, we met on a late Summer Saturday morning and talked price and process.

She had a new job waiting for her out of state and would be leaving Washington within the next 30 days.

Good news was, the appraisal had already been completed. 

It's good news because in an FHA short sale, an appraisal is used to determine the net offer which would be acceptable to the investor.

Cool....we know our price.

Even cooler, we get an offer on the first day, from the first buyer who viewed the unit.

(Granted it showed well and had some nice upgrades, but I was expecting a more pro-longed market period just because of the high condo inventory at the time).

Offer accepted, GREAT.


Only not so much.

Even though the appraisal had been completed, it still took about 40 days for the ATP (Approval to Participate ) letter to be generated.

In the South King County market, it's not uncommon for first time buyers to ask for 3% in seller concessions, which can be applied towards closing costs and/or pre-paid expenses.

BUT...(why is there always a but?)

FHA will only allow $1,000 towards closing costs, and even then, only if the buyer is obtaining their financing with an FHA loan.

Ok, not a problem, we'll just ask for a variance.

Tack on another 21 days.

Variance granted

Cool....ready to go.

Uh oh.........we find out the complex just lost it's FHA eligibility due to some flood bla blah blabbity blah...problem which wasn't even accurate, but caused us another 3 weeks for the property manager to get the FHA eligibility re-instated.

Cool...ready to go.

Uh oh.......Buyer's financing is through WA State Housing Commission (State Bond). Bank of America announces end of November they will no longer be the "Master Servicer" of these loans.

No one knows who will be the servicer and until then, we can only wait.

Ok, we'll wait.

Uh oh.....short sale expiration pending, request an extension.

Extension granted.

30 days pass....still no Servicer.

Request a second extension with the knowlege this is our last bite at the apple most likely.

Yes, this story has a happy ending....barely.

Thanks to a motivated Seller, committed buyer, great Lender who communicated well throughout the whole process and the BEST Escrow closer in the world...we recorded the sale just under the wire of our extension expiration.

The moral to this story is, there is rarely such a thing as an easy short sale.  

No one short sale is ever like another and the likelihood of success lies in direct proportion to the commitment of all parties to be patient, go with the flow, and always keep the ultimate goal in mind.

Harbor Reach 2 BR 2 BATH Condo, Kent, WA SOLD $110,000.

Whew !

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Thanks for reading!






Colleen Fischesser REMAX

 Serving the beautiful Pacific Northwest Since 1990!


Colleen M. Fischesser, Managing Broker

RE/MAX Advantage, L.C.

Serving Seattle and the Chelan Valley

206-491-3819  (Cell/Text Seattle)

509-699-1611 (Cell/Text Chelan) 


This is a personal blog based on my opinion and experience in the real estate industry. All content is provided for informational purposes and should not be construed as legal, financial or tax advice. Laws, industry practice standards and procedures vary by state. Readers are advised to contact appropriate third parties for professional advice when needed. Any questions please let me know!


Comments (5)

Jim Patton
Aspire Home Real Estate 209-404-0816 - Modesto, CA
Realtor - Stanislaus ,Merced, San Joaquin Counties

Congratulations on getting this one done Colleen.  You are so right about no two short sales being alike.  Every one is a learning experience.

Feb 15, 2012 02:07 PM
Colleen Fischesser Northwest Property Shop
NextHome Experience - Chelan, WA
A Tradition of Trust in the Pacific NW since 1990!

Thanks Jim. Sometimes we tell our clients that and they just don't fully comprehend all the possible curveballs they might be thrown.

Feb 15, 2012 02:09 PM
Winston Heverly
Winston Realty, Inc. - Atlantis, FL

The biggest challenge is getting the buyer to stick with the deal. The more you know what is owed the better your deal will stay together.

Feb 15, 2012 02:18 PM
David Spencer
Keller Williams Northland - Kansas City, MO
Show Me real estate in Kansas City

You were right, its an oxymoron

Feb 15, 2012 02:53 PM
Norma Toering Broker for Palos Verdes and Beach Cities
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes Luxury Homes in L.A.

Yes, it is an oxymoron--I just received short sale approval from BofA and it was anything but easy and short.

Now on to closing.

Feb 16, 2012 10:25 AM