During a closing I had this week my buyer actually said "I Can't Believe It Is This Hard To Buy A Home For Cash". The buyer was buying the property for cash and could not imagine how difficult the process was to finally get to the closing table.The problems were sure not on our end of the transaction but rather on the seller's end. You see, the seller was not making payments on the property any longer. Neither the 1st mortgage lender nor the 2nd mortgage lender were in too big of a hurry to send their borrower (the seller) the official Notice of Election and Demand that would start the foreclosure process. So, we ended up writing a purchase contract that required a "Short Sale" Addendum. This also required both existing lenders who were taking substantial losses to provide written notice that they would allow the "Short Sale" to occur. They basically had to put into writing their agreement to accept considerably less at our closing than their promissory notes were written for.
Today, lenders REO (Real Estate Owned) departments are so over worked that they get around to contracts like ours whenever they can. I this example, it took them over 60 days from the day we wrote the offer on the seller's property to get around to responding in writing that they would allow our closing to happen.
Technically, my buyer and the seller never did have an enforceable contract all the way to the closing. The Short Sale Addendum requires the lender(s) to provide written notice of their acceptance of the purchase price and the resulting short payment of their loan(s) in order for the contract to be in force.
The real problem with my buyer was that he was trying to move his family back to Denver from Mexico. He continuously asked me if me if it was save to make the move. I had to answer him every time with "I really don't know. It looks favorable, but we still do not have the required signatures from the two existing lenders"
We did finally close, but not until the buyer was quite frustrated with the home buying process that now is standard operating procedure when a home is going through a "Short Sale".
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2 comments:
I would have to agree, sellers can be a pain the neck. I had a similar situation but banks where not involved. My cash buyers made a cash offer to buy a property but the seller was having a hard time letting go of his property and that complicated things for me and my buyers to the point where my clients decided to buy property elsewhere in the country and deemed the Breckenridge real estate market as a bad market to invest in at this point in time.
Hi there,
Thanks for your note. I looks like you are telling me that the real estate business is a bit of a challenge in Breckenridge too these days.
The good news is that our market seems to be really improving with a continuous decrease in available listings, more homes selling per month than in the same month last year and very favorable interest rates. The number of foreclosed listings coming on the market is also decreasing city wide.
I really think the housing market is showing signs of recovery.
May all your buyers be serious and your sellers reasonable.
Best wishes,
Bill
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