Have you ever wanted to try to prepare a buyer for everything that can go wrong during a given transaction and then realize that everything you say sounds as if you don't want to help the buyer get the home they really want? It's a problem I frequently encounter in my Orlando, FL real estate business so I thought an "in the trenches" insight might be apropos':
July 2012: Initial contact with potential seller who turns into buyer for 3rd home which will be their primary residence. The residence we initially meet about is "underwater" meaning they owe more than the property is worth. The mortgage is current & they choose to refinance the property & list the property as FSBO or become landlords. We stay in contact & a few weeks later we talk about potential new home purchase. Their family is growing, 2year old at home & expecting new baby in March 2013. They know where they want their children to go to school so the search begins, first on the internet & then previewing homes in person.
August 2012: We spend 3-4 hours every weekend together previewing the homes that we have been evaluating on the internet so they develop a comfort level with pricing, community features in differing subdivisions & defining their list of must haves versus want to haves. I take this time to educate them in the differences between short sales, REO's (bank owned) & traditional sales. They are good students and are very attracted to anything that is a good deal, in any of their selected schools. They rule out short sales but remain attracted to REO's.
September - December 2012: Finally find THE one!
I put comparable market analysis together after leaving THE one. Home is worth listed price, in desired location & perfect schools! Buyers are good students & know it's a sellers market but decide to sleep on their decision for 5 days. Finally they ask me to prepare an offer. I call the sellers agent, no they don't have any offers, I prepare an offer under list price (not recommended in a sellers market), requesting seller to pay some of buyers closing costs. Buyer signs contract 2 days later. I submit immediately to sellers agent who informs me now there are multiple offers. Buyer is happy with offer & loses the property. About 5 days later the buyer asks to be a back up for same property. I write back up which buyer signs off on immediately & I send to sellers agent. Buyer is now paralyzed for the next 16 days hoping the original contract falls apart. We lose 2 more opportunities on other homes due to buyer paralysis. Finally the back up deadline expires & we hit the ground running. Look at many more homes put offers in on 6 more (full price when comparables will support the list price) & the multiple offers & rejections continue.
December 2, 2012: Submit online bid on REO needing lots of work & priced competitively. Offer rejected. Buyer asks to submit backup. Done. We now continue to "shop" as experience has taught the buyer not to wait & on December 9 I am notified that the buyers backup has been accepted. Bank contract arrives. Buyer speaks to lender who can meet contract loan commitment date 13 days later even with intervening Christmas holiday looming. Buyer executes contract with $100.00 per diem if she delays closing.
December 17 2012: I receive fully executed contract back from the sellers agent which should have been back on the 14th. Buyer wires her substantial escrow deposit. 3 days of due diligence hanging in space as contract dates different than real dates due to sellers agent not returning timely. Docs to lender & inspections scheduled immediately. Buyer aware that water unable to be turned on for inspections per contract. Inspector presents many findings which ultimately will equal about $25K in necessary repairs. Lender was instructed on the 17th to order appraisal due to short (13 day) due diligence. I remind lender several times during that week that I have not heard from the appraiser. No response. Finally on December 24th (yes that's Christmas Eve) the appraiser contacts me to let me know he will be to the property on the 26th. I beg him to go on Christmas Eve & he wants to know why the rush since the report is not due until the 28th. I tell him our loan commitment date is the 28th & the appraisal should have been ordered as a rush a week ago. He turns the report around to lender on the 27th & @ 4:06 pm on loan commitment day (5pm deadline) the home appraises 20K over contract price with appraiser required repairs to the pool & flooring. Bank contract requires lender personally write why no loan commitment by 5pm or buyer forfeits deposit. I speak with lender re: content, she asks me to review & let her know if it needs to be revised. I receive at 4:25 & email & call suggesting revision. No response. I contact buyer, apprise her of the situation & @ 4:57 we send the letter we have in hand to sellers agent. Along the way we have picked up 24 parties involved in the closing on the seller side. Listing agent completely unresponsive by any means. All discussion to be through sellers title company based transaction coordinator who held up the executed contract for 3 days at the beginning.
December 28th 7pm: Addendum to buyer per lender letter requesting repairs per appraisal.
January 2, I am notified that a new transaction coordinator is in place. I email her to request seller response to repair addendum. Several hours later notified that seller declines to perform repairs. Please submit cancellation. Buyer notified. Still wants the home. Lender suggests escrow holdback of 1.5 times cost of repair which will need to be done within 7 days after closing. Buyer aggreable depending on cost of repair as they are currently bringing 20% to closing & funds dwindling. Closing date looming for January 15, 2013.
January 8, 2013: Estimate in. Buyer approves that she can bring that amount to closing. Lender notified & file to closing department.
January 11, 2013: Email from transaction coordinator that she needs 15 day extension and I should prepare. I am shocked and email her to request explanation. I call buyer who has jumped through every hoop presented by the seller & would like to know why she can't close on time. I will be able to respond to that when I am told. Several long hours later, I receive an email from same transaction coordinator stating that the HOA unpaid dues are too high & the attorney is negotiating them. Buyer agreeable to 15 day extension, addendum sent.
January 16, 2013: Still waiting for HOA negotiation to complete. Clear to close received from lender.
I will update this after transaction is finalized.
It is & has been a nail biter from the get go! I hope this buyer experiences the happy ending she is looking for. One thing I know for sure, if this home does not make it to closing, she will not be purchasing an REO in the future!
I live & breathe Orlando real estate. Please contact me if you would like me to represent your real estate sale or purchase.
Comments(0)