We recently closed what would be considered a pretty complicated short sale, and are pretty darn proud of it! Here are the logistics, the seller had a 1st and 2nd loan with Bank of America, and hadn’t paid his mortgage in nearly 2 years. He contacts East Bay Short Sale Group to do a short sale with a Trustee Sale Date (Foreclosure) only 30 days away. What’s more, he lives in a nice townhome community and has monthly HOA dues of $328, which he hasn’t paid in almost 3 years. We take the listing, contact BOA and ask for a postponement of the pending foreclosure sale date, which we are granted. We do heavy marketing for the property and within a week we receive an offer from a buyer and submit to Bank of America’s short sale department. Bank of America comes back a few weeks later and counter offers $20K higher than the offer price. We then need to (re)explain that since there is a $17,000 HOA lien on the property (which the buyer MUST pay at closing in order to transfer title since the seller doesn’t have the money to), we have to discount the contract price to the buyer. Finally we get Bank of America to agree to the lower price after documenting this. One week later, buyer loses their job, contract is cancelled.
We put the home back on the market, find an all cash investor, resubmit new short sale offer to Bank of America for approval. Quite a few weeks later BOA comes back and now wants $40K more than before. Yes, that can happen, you can get a different counter offer price from the same bank, all depends on who the negotiator is who is working on the file. Now we must get a new appraisal to support the lower price, including showing proof of the HOA lien of $17,000 that buyer must pay. After nearly 6 weeks we get BOA to come down to fair market value. This time, three days before closing, the HOA tells the buyer they have now reached their limit for rental units in the community. Buyer now must back out because he will own an investment property that he cannot rent.
We put the home back on the market. Find another buyer who agrees to pay the $17,000 HOA lien (nearly $18,000 now) and the most recent approved short sale price proposed by BOA. We resubmit the short sale offer for review. Bank of America comes back with an approval and we are 5 days from closing. All of a sudden the CA State Franchise Tax Board files a $7,000 tax lien on the short sale property for unpaid tax items from the seller. This too must now be removed before closing escrow. After two weeks of negotiating with the Franchise Tax Board, we are able to successfully get them to issue a partial lien release, meaning the lien is not longer tied to the property but stays as a lien with the seller. We finally successfully close the transaction.
All of this work while getting the investor of the loan to continuously grant us 9 months worth of extensions on the foreclosure sale date.
We finally are able to put this to rest and the seller gets out of the house, the HOA gets paid $18,000 they normally would have had to take a loss on if the property foreclosed, and the buyer got a great deal on a home under market value. BIG win-win for all involved.
We love short sale challenges and would love to hear your situation and how we can help make it a victory for you also. Contact us for more information!
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