I am supposed to close Monday on a short sale I have been trying to purchase for the last 5 months. Originally the closing date was October 20th,

Asked by Dionysus, Reston, VA Fri Sep 17, 2010

then it was changed to September 30th, and then the date was moved to September 20th; that ended up giving me a total of 6 days to get my ducks in a row. Somehow my lender is going to come through with the financing. My question is, I received this email today from my agent, September 17th, “The Title Company has a copy of the short sale approval but they will not provide it to us because of their privacy policy. But he assured me that it has been approved.” What does all of this mean?

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14
Sonal Goda, Agent, Reston, VA
Tue Sep 21, 2010
Hi Dionysus - there are short sales out there like this one where you cannot trust the listing side of the deal. If they are not being straightforward with you, there is really no way to make the short sale go through for you because nobody on your side has authorization to discuss the short sale with the bank, correct? I had a situation like this before and it did end up going to foreclosure and thank goodness my clients were able to buy it as a bank-owned property. But in order for it to go to foreclosure, the short sale case must be closed by the bank, and then the foreclosure proceedings would begin. The chances are slim at this point because the other side is trying to do something sneaky. You could try reporting it to the listing agent's broker but for the most part, you should probably start looking for the next house and just keep this one as a back-up for you.

Thanks,
Sonal
0 votes
The Caza Gro…, Agent, Reston, VA
Tue Sep 21, 2010
You need to be talking to the person controlling the short sale negotiation. Is it your agent? Is it a third party service? Was it the title company that you were working with? Do you trust the person working on the negotiation? There are many factors that need to be considered and analyzed in order to give you the best advice. I would have your attorney and your title company drive the short sale process moving forward with the expectation that you might not get it. Make sure that your title company and attorney provide you an "out" as they work through the negotiation and in the mean time start looking at other properties to see if there is anything out there that you like better. You want to have a plan B in case this doesn't work out.

Good luck!

Rob Chevez
http://www.robertchevez.com
Keller Williams Realty
703-587-0995
0 votes
John Wood-Sh…, , Virginia
Tue Sep 21, 2010
I answered incorrectly a few days back. If the contract does have a short sale addendum stating letter of approval must be produced then you should get a copy to make sure the deal is approved. I apologize for not being more specific....:)
0 votes
Erik Weissko…, Agent, fairfax, VA
Tue Sep 21, 2010
Dionysus,

What does your agent say?

I have been at this for 20+ years now and unfortunately your recent post comes as no surprise. I can only imagine the frustration you are enduring.

My first suggestion would be to punt and make all these people start from scratch. However, since it is apparent you really like this house..I would make sure you have an out..and keep exploring other opportunities. I have a client with 2 properties under contract and the first to perform gets his money. This practice is not applauded by most of my colleagues but I have to do what's best for my client.

From where you are now..you may want to see if an offer in compromise was made to the 2nd by the first. If so..how much. I have not heard of more than 10% so in your case..$4200. This is where the poker game begins because the 2nd would rather something than nothing..but if they are not in agreement...you may want to add some of your own $$. This can sometimes cause problems with the first trust...so you will first need to find out their stance. You should have YOUR title company or attorney or agent handle this.

As for how long it takes..til auction..depends on the payment history of the owner. I imagine he has been making payments in total or in part..to defer the foreclosure. No one REALLY wants the foreclosure so keep negotiations open.

Best of luck and if I can be of any assistance feel free to contact me.

Kind Regards,

Erik J. Weisskopf, ABR,CDPE,CRS,GRI
Erik@AskMeAboutHomes.com
703.216.1222
0 votes
Dionysus, Home Buyer, Reston, VA
Tue Sep 21, 2010
I did not settle on the 20th. Apparently the negotiator and his title company were trying to commit some kind of fraud against me; luckily I had my own attorney and title company that caught it. There was never any approval letters, and the second trust on this property still wants 42K. What do I do from here? Keep waiting? How long does it take for this property to be auctioned off? It has been a distressed property for 2 years now.
0 votes
The Caza Gro…, Agent, Reston, VA
Sun Sep 19, 2010
Paragraph 5 of the short sale agreement states that "the seller must provide purchaser with WRITTEN evidence of creditors approval......."

I would have your agent request this information from the listing agent not the title company.

Sometimes Title Companies have internal policies that prevent them from giving you what you need. All you need to do is talk to the right people....point out to all involved that per the contract (assuming you used the short sale addendum) it says that you should have received written evidence! Your Lender should have also received this written evidence - they won't approve the loan without it. Ask your lender for proof of this info as well.

Good luck!
0 votes
Keith Sorem, Agent, Glendale, CA
Sat Sep 18, 2010
It appears that there is a lack of communication.

In most short sales the approval issued requires that all parties work as though "time is of the essence".
For the buyer that means having EVERYTHING ready to close at the drop of a hat. You presumably let your lender know, and they have enough experience, to pre-plan everything as much as possible so when you receive approval, they can fund asap.

In most short sales "written approval" is required...and provided by the lienholder. The approval is designed to be provided to all parties.

Look at your purchase agreement with your Realtor, and also any related documents. "Written" means just what it says...not "oral" or "verbal".

Good luck. Sounds as though you are close.
0 votes
Erik Weissko…, Agent, fairfax, VA
Sat Sep 18, 2010
Congrats on getting approval...however not seeing the approval letter means to me...that most likely the listing agent controlled where settlement would happen. You are given a choice to close where you want and it amazes me that most agents allow the settlement to be at the discretion of the seller...and THEIR agent.

My suggestion would have been to choose your own settlement company..OR do a split settlement meaning the seller uses one and you use a different one. With a split settlement you would have a bit more control and most likely easier access to the answers you want.

As for settlement being moved around..defer to your agent..AND your contract. It all depends on how the contract is worded as to when settlement should/will occur.

Best of luck and it sounds like you are at the home stretch. If you get in a bind with financing..reach out to me and I am confident my lender (who I have used for 10+ years) could turn it around in 7 days or less. He has done so before for me.

Kind Regards,

Erik J. Weisskopf, ABR,CDPE,CRS,GRI
Erik@AskMeAboutHomes.com
0 votes
Sonal Goda, Agent, Reston, VA
Fri Sep 17, 2010
Hi Dionysus - You have wonderful luck in having your short sale approved AND that it is actually closing earlier than expected! This is very unusual - more than half of short sales never close at all and even the ones that do, commonly get delayed by one month or more. It is very difficult to predict the closing date with a short sale - it is a moving target. Once you get the approval, you have to close according to the date set in the approval letter by the bank.

Regarding the privacy policy, if I were you, I would call the title company directly and confirm with the person that is handling your closing - make sure they say the same thing that your agent says. It could well be the privacy policy of the title company, even though I have never heard of this. But things change all the time with short sales and regulations. The best thing to do is confirm with the title company that everything is ready to go for September 20th!

Good luck - I hope you close!
0 votes
John Fitzger…, , Fairfax County, VA
Fri Sep 17, 2010
You need to talk to your agent right away. Something is going on here that doesn't smell right, which is, alas, typical for the majority of short sales. I think you need to go over all the contract documents, line by line, with your agent. If you don't get satisfactory answers, then, if I were in your position, I would seek to consult a real estate attorney.

You may have unwittingly consented to a 3rd party control of when settlement happens. The 3rd party approval forms that you signed need to be gone over with lots of care.
0 votes
Cindy Jones, Agent, Alexandira, VA
Fri Sep 17, 2010
I've never seen a title company withhold a short sale approval letter from a buyer. I would have your agent make direct inquires and find out if you are potentially part of a short sale flip. You are right to be guarded and I'd press your agent to get details.
0 votes
Jim McCowan, Agent, Arlington, VA
Fri Sep 17, 2010
The settlement dates could not have been changed without your agreement . . . . . .
0 votes
John Wood-Sh…, , Virginia
Fri Sep 17, 2010
It means the sellers agreement/approval letter with their lender cannot be disclosed to you because of privacy laws. It is irrelevant as long as it's approved...congrats on your new home to be on Sept 30th.
0 votes
Lyn Villanue…, Agent, Fairfax, VA
Fri Sep 17, 2010
It appears that the settlement will take place. Sooner than later. Most short sale may take longer. Glad to hear that your date got moved up sooner.
0 votes
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