Remember to Ask THIS Question

By
Real Estate Agent with Coldwell Banker Preferred Properties

I had a closing yesterday.

That is definitely something to celebrate!! 

But it ALMOST didn't happen.

I was representing the buyer and we negotiated an aggressive, but fair offer.  The seller's agent prepared a net sheet for the seller and he was going to have to bring close to 15K to closing.  He went to the bank and borrowed the money to come to closing.  This was not an easy feat during the state of the economy 2 weeks ago, but he found the money.

The day before closing, the attorney prepared the HUD statement and the seller was STILL $3,000 short.  What happened???  The seller had neglected to mention to his agent that he had stopped making payments on the house.  The agent had figured his estimated funds to close sheet off of his unpaid balance at the time she listed the house.  The seller at the last minute couldn't find anyone to lend him the extra 3 grand - banks or relatives.  What a day!!!!

My buyers were left with 3 options:  pony up the extra $3,000, wait 2-6 months to see if the seller's bank would approve a short sale, wait for the bank to foreclose which COULD have been an option somewhere down the road, or walk from the house that they had already moved into (in their minds of course).

My buyers felt confident that they had another 3K worth of value in the house and were given an opportunity to be gracious to the seller who was doing the best he could in a bad situation, but not all buyers could or would be willing to take that action at the last minute.

Best to ask, "You haven't missed any mortgage payments since we listed the house, have you?"

 

 

Comments (13)

James Engel
Keller Williams Realty Beverly Hills - Beverly Hills, CA
KW Beverly Hills

Wow that seems as a deliberate attempt by the seller, good for you that you had reasonable buyers, it could have turned ugly pretty quickly

Oct 22, 2008 06:10 AM
Edna Jamieson Wood
Wainwright & Co. Realtors - Moneta, VA
Realtor/ABR at Smith Mountain Lake Virginia

That's why we know it isn't a done deal until closing is complete!

Oct 22, 2008 06:11 AM
Michael Wayne Jackson
Coldwell Banker - Novato, CA
Broker - Seniors Real Estate Specialist Novato

How bizaare, I'm glad you were able to close this home for your clients.

Oct 22, 2008 06:14 AM
Barb Van Stensel
Chicago, IL

What happened to the listing agent?  She kind of made the mistake and assumptions.........

Oct 22, 2008 06:14 AM
June Piper-Brandon
Houwzer Inc - Baltimore, MD
Piecing Dreams One Home at a Time

I had a similar experience with a listing.  When I listed the house I asked about mortgages and loans against the house and was only told about one.  So, when we got a full price offer, I prepared a net sheet and the seller was happy.  The day before settlement I got a HUD-1 and shared it with the husband, he was fine.  We got to settlement and the wife starts going off because there's a second mortgage that I didn't know about.  She was all upset because the bottom line was not what I said it would be and how could "you" be so far out.  I looked at the HUD-1 and took out my file and showed her where she had written in the amount of the 1st mortgage but hadn't filled in anything for the 2nd.  She was still in a huff and very unhappy with me.  Oh well, you win some, you lose some.  It settled, but they weren't happy in the end. 

Oct 22, 2008 06:15 AM
Joseph Crespillo
Sellstate Realty First - Rocklin, CA

I agree with Barb, maybe the listing agent should have stepped up and helped out.  If that us what Barb is saying.  If not, that is still my opinion.

Oct 22, 2008 06:19 AM
Erik Hitzelberger
RE/MAX Alliance - Louisville REALTOR-Luxury Homes - Louisville, KY
Louisville - Middletown Real Estate

Toni - Many buyers would have balked at a last minute, $3000 increase.  Yours must have been well-educated with respect to the value of the home.  Nice job.

Oct 22, 2008 06:20 AM
Ellie McIntire
Ellicott City Clarksville Howard County Maryland Real Estate - Ellicott City, MD
Luxury service in Central Maryland

I work very closely with a title company (RGS Title)They send a prelim HUD-1 to the seller as soon as they have all of the payoffs.

Oct 22, 2008 06:23 AM
Kris Wales
Keller Williams Realty - Lakeside Market Center - Macomb, MI
Real Estate Blog & Homes for Sale search site, Macomb County MI

It sounds like the buyers came up with the $3000 difference.  Good for them.  Shame on the listing agent and the attorney for not ordering a payoff statement the day the offer was accepted.  Per diem interest can be manually added on to get a good idea of what the actual payoff will be on the date of closing.

 

Oct 22, 2008 06:26 AM
Tony & Darcy Cannon
Aubrey and Associates Realty - Layton, UT
The C Team

Toni, you and the sellers are lucky that the buyers were so willing to help out!  Great reminder, sellers need to make payments until the paper work is signed and recorded!

Oct 22, 2008 06:31 AM
Toni Bird
Coldwell Banker Preferred Properties - Hoover, AL

Barb-

There were a couple of OTHER things the seller's agent forgot to disclose to her client.  Or let's say she didn't read the contract. This is one of those occations where you can understand why people think they can do just as good a job going FSBO.

 

Oct 22, 2008 07:49 AM
Ann Allen Hoover
RE/MAX Advantage South - Hoover, AL
CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL

Toni...congrats on the closing!  I had one of these recently also....thanks to the buyers for being reasonable and willing to do what they had to!  It could have been ugly and I'm glad it happened for your buyers...and you too! 

Oct 22, 2008 01:02 PM
Renee L. Norton
Birmingham, AL

Toni,

Congratulations.  The list of last minute surprises is never ending!

Nov 09, 2008 05:44 AM

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?