Westminster, CO - Wow, what a crazy short sale experience, and I have had many to ponder over!! Now, mind you... I have done about 70 over the last 15 yrs, and probably 20 of those were assisting other Brokers in my office.
This one takes the cake!! I have not touched a short sale in about 1.5 yrs, until I was referred to this one in May. Just to keep it simple, it involved a seller that was in default for 5 yrs. You wonder how is that? After, many trial loan mods and a note being bought from one lender to another, it has come down to foreclosure process being started last December 2014.
I normally do not work my own buyers on my short sales, and it is probably a good thing I did on this one! The buyer was a very good prospect that just wanted this property no matter how long it took or what was involved. Good thing, too!!
The seller was a bit difficult to work with, but we managed to make it happen, and closed last week. Patience with the seller to move into a rental was somewhat of the delay, but so was working the 1st and 2nd lienholders.
Bottom line to all of this, and sort of makes me NOT want to see another short sale for some time, was the lost commissions to make this work.
The 1st lienholder was a complete pay-off, since the BPO was about $35,000 higher than the TOTAL pay-off amount. Simple right? Well, not at first. The offer we had in hand was about $15,000 over that pay-off. Remember, when a lienholder has total pay-off with and an offer in hand that is over than amount, they DO NOT care about selling costs, that is your problem as they stated to us.
Simple solution... eliminate the 1st lienholder, get them payed off by getting the purchase price closer to the BPO value. Not to satisfy the 1st lienholder, but to have funds to work the 2nd lienholder. There was not much motivation within this process, since these 2 loans were attached to a chapter 7 bankruptcy. They had no recourse with the borrower, seller.
A fun ending here!!
So, the buyer increased their offer by $13,000, and I decreased my commission by $18,000 (stupid or get it done?). Got the 2nd lienholder paid off at $14,000, the 1st paid off at $455,000.
You wonder what happens when a borrower is behind for 5 yrs? Well, the balance in default was $320,000!! Making accrued interest and back payments a value of $135,000 (including attorney fees). For that total pay-off $455,000.
YES, that was my face, Linda Blair above, for about one hour!! My good deed for the year!! $8,000 commission better than a kick in the teeth, as my Mother would tell me!!
Thank you for reading my blog,
Broker Associate @RE/MAX Alliance
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Dan Hopper specializes in assisting home owners to avoid Foreclosure in Denver, Colorado. Denver Loan Modification Help, Denver Short Sales. Denver Realtor. Westminster, CO Loan Modification Help, Westminster, CO Short Sales, and Westminster Realtor.
