Turbulence complicates a short sale.
Buying distressed property can seem like a turbulent processâ€“like the occasional high wind at this Kohala Coast ranch lot.
Recently I described a short sale situation in which sellers couldn’t afford to make a repair that was critical to closing a sale on their house. And without the repair, the bank would probably keep the listing open for a long time, waiting for other offers, instead of approving my clients’ cash offer on this Kohala Coast dream home. My idea to get this moving was to present a solid case to Wells Fargo (and Bank of America on a second loan) for going forward on the approval process, which would require an exception on their part.
Wells Fargo, more than our local banks, has a pretty good history of flexibility. They have been more available and faster to reply than most banks at this time. And they promise a 35-day turnover for short sales; which would make my clients happy. An idea of consulting the builder came from conversations with the sellers. The builder (at first very defensive) did eventually make the needed repairs to the cesspool system, once the sellers found/proved that the cesspool had been relocated and that the initial hole had been filled with debris from construction. The filling of the cesspool, possibly combined with the 2006 earthquake, had led to the failure.
Along with the contracts, we submitted a formal discussion of current fair market value, given the current condition of the property, together with the inspection report. I’ve handled a fair number of short sales since the downturn of the financial world as we knew it, so I’m pretty confident that the bank will appreciate our offer as their best outcome.
In order to have fair and unbiased representation for both the buyer and seller, I enlisted my business partner, Beth Robinson, R(B), to assist on behalf of the sellers.
With the issue of the sewage solved, the property has progressed to the stage of submitting the contract to both banks for their review and approval. This process entails compilation of financial records (two yearsâ€™ tax returns, last two monthsâ€™ bank statements), income verifications, appraisal on behalf of the lien holder (Wells Fargo and Bank of America) and verification of buyers’ ability to purchase (cash funds proof). Let’s see how close to the 35 days we can come!
Feel free to ask me your short sales questions.