Short Sale: A Junior Lien Tries to Tank the Deal

Hey short salers....my apologies, but I need to do a little venting....and thought sharing this story would be a great opportunity to talk strategy for dealing with STUBBORN junior liens.

Just had an attorney try to tank a short sale deal that will bring us more than the normal profit centers for our team. 

He represents a client with over $50k in judgements against the Seller.  The primary lender has set the minimum net they will require.  There is NO budging them any further.  They have already postponed foreclosure 3 times, have agreed to take $20k less net than they wanted, have agreed to a much more than a standard amount to junior liens (there are two), and the agents have reduced their commission.  There is just no room to give him anything.  They "will foreclose this time if this contract doesn't work out"--their words.

We did the whole:  The Seller is in distress and ... The property will go to foreclosure and everyone will get nothing... Look, everyone has taken a discount, even the agents.... NOTHING.....Except a few explicitives that he wrote on top of my offer letter in sharpie marker and faxed to my attention.   What is with this guy?

Well, the bad blood between his client and the Seller stinks.  His client would rather see them go to foreclosure then get anything.  Boy, I wish I could throw away a chance to make some extra money.  Pride doesn't stop me.  This plaintiff is not just going to throw away a chance to make anything he will also have to foot a heavy legal bill to his attorney.... dummy!

Okay - so what is our solution?  Well, in tough situations you sometimes have to bend and find another workable way.  We first went to the lender and asked for just a little more reduction in their net.  Then we went to the Seller and to the Buyer and explained the situation.  Both the Buyer and Seller are going to contribute towards the pay-off of the junior lien.  The Seller knows it is beneficial to them to pay a little towards having a huge judgement released.  The Buyer know they are getting a home below market and are willing to make a little extra investment to not lose the deal.  The agents get to keep the commission they had agreed to....And we get what we have been guaranteed.   Everybody WINS WINS WINS

Can this be done in every junior lien situation - NO?  Is this strategy necessary every time? NO

BUT - I have watched too many deals go bust because agents just give up. The don't try other options to keep the deal aliive.  That is one of the reasons on ly 2 of 10 short sales close in this country.  At that rate, we are going to have a lot more agents hungry and looking for jobs with the rest of the unemployed.

As agents - our jobs have changed - we have to be creative bulldogs and get it done!  Our team completes over 90% of the short sales in our office.  We are making it happen.

For more short sale tools please visit www.easyshortsalemanager.com  or http://shortsalecoachingmonthly.com

Thanks for reading

Would love to hear your short sale tales

Amy Ransdell

770-966-7040

The Southeastern Group