The drama of working with short sales in a tough economic climate!
Ocean views give new meaning to the idea of “ranch life.”
No one can say that the life of a Realtor is dull! Last week’s short sale experience was a first for me and reminded me about welcoming the challenge of the unexpected!
Clients on the mainland told me to submit an offer on a vacation home in one of our many gated ranches. This high-end, 4-bedroom, 5 year-old home comes with a pool, panoramic ocean view, anda 3-acre lot in an exclusive gated equestrian development on the coast. It had been listed at $1,795,000 two months ago and was now down to $1.25M.
We prepared a signed contract for just over $1M. The sellers wanted to accept . . . then we learned that the cesspool system was broken and the current owners could not afford to repair it. A working sewage disposal system is considered a requirement, and especially if the appraisal â€œgets wind” there is a problem. This typically complicates a short sale situation because banks want to keep a house listed until they receive â€œa few offers.” Therefore, Wells Fargo ordinarily wouldn’t decide on my clients’ cash offer right away. Trouble is, with the sewage system problem, the bank is unlikely to receive other offers because financial institutions won’t make loans for houses requiring that level of repair, and most buyers require financing at that price level. And, the owners can’t afford to move out because if they are not in residence, it is termed “abandonment” and then the sale doesn’t qualify as short!
This is where resourcefulness and experience come into play. Banks establish policies to govern disposition of distressed properties, but I’ve learned over time that there is room for creative, but solid, proposals. My plan is for the seller to accept the contract and submit it to Wells Fargo. I’ll back it up with documentation that supports completion of the sale as the best option for the bank.
Tune in soon for further developments in As Real Estate Turns!