Short sales have become a significant percentage of our real estate transactions here in Coeur d'Alene, Idaho. It used to be that most agents would refer them to other agents who specialized in short sales but not anymore. Because of the sheer numbers of them, just about every agent in Coeur d'Alene is accepting short sale listings. That's not really a good thing for short sellers, but that's a blog post for another day.
So, on any given day I am dealing with my short sale transactions along with my traditional real estate business. Achieving and maintaining a 100% track record of successful short sale closings comes with a lot of self-imposed pressure. I'm extremely proud of that accomplishment and would like to maintain it as long as I can, hopefully forever! It's personal to me, personal in that it means my clients are avoiding foreclosure and able to make the best of the unfortunate circumstances they have found themselves in. Most of them, through no fault of their own.
With every short sale, it seems that prior to closing some unforeseen something comes careening out of left field and threatens to torpedo the deal. I work hard at anticipating and eliminating in advance any possible thing that could go wrong, but in spite of my valiant efforts, stuff happens.
Currently I am dealing with a delayed closing because the seller's buyer is selling their house, and their buyer is getting a USDA loan which has been delayed. This is quite typical for USDA loans, we expect it. We build extra time in to allow for the notorious delays. But this one is dragging on at the speed of molasses, way beyond what we could have imagined.
As infamous as USDA is for slow closings, the difficulty of getting short sale approval from a second mortgage has them beat. In this deal, the short sale approval of the second mortgage expires on the 31st. At this point, there is no way we will close in time. In order to extend their approval, the second demanded another $2500 to their settled payoff. They have warned us repeatedly. When it looked sketchy on Monday that we could get it done in time, they said NO, they wouldn't extend. When the closing officer contacted them yesterday and said we would just need a couple more days, they said NO!
So yesterday I took a deep breath and called them again. I explained that the deal was dead if they wouldn't extend. I begged, pleaded and groveled for just another week. NO! Round and round we went. You see, my motto is never, never, never give up. Therein lies the secret to success and the lesson to be learned here. Finally, because I think she realized it was the only way to get me off the phone, she said she would submit the request to management and call me today with their answer, which was going to be NO!
So today she called and said, NO! Oh brother. That's when it happened. I started dropping the F bomb every chance I got - FORECLOSURE! The deal is dead, now we will have a FORECLOSURE. Sellers are out of time so the FORECLOSURE will take place as scheduled. We have been trying so hard to avoid it because FORECLOSURE is not in anybody's best interest. And on and on. I think again, just to get me off the phone, she said she would appeal to management one more time. SURPRISE! In a very irritable and crabby tone of voice she said they have given us a one week reprieve to the 7th, but THAT'S IT!
The thing is, in a short sale the second mortgage will usually have to settle for a small percentage of what they are owed, but they have to agree or we can't short sale, so they can hold us over a barrel. But if we can't come to terms and get the deal done, and the house goes to foreclosure, the second mortgage ends up with zero. So there is a tipping point in what is not unlike a game of real estate Chicken, when they finally believe that they aren't going to get anymore money. Because at the end of the day, they are so much better off with something, than nothing.
So the morals of the story are:
- Never, never, never give up!
- Never take no for an answer!
- Understand the motivation of the lenders you're negotiating with!
- Hire a real estate agent who understands how to work short sales!
As far as that OTHER F bomb, I would never use it. We've all heard the saying, You catch more flies with honey, and that's absolutely true. I will grovel, plead, beg, throw myself at their mercy, but pleasantly and professionally. I will swallow my pride and indignation and gush with gratefulness at any crumb given because it serves my purposes and is in the best interest of my clients. In this case I even said the words "I understand why you can't extend, I'm just hoping that you will be able to show us some mercy under the circumstances." I have found that a little bit of gratitude and appreciation goes a very long way to achieving ultimate SUCCESS!
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