Short Sale Heads Up

Good Saturday morning to all! What a gorgeous day to be in the Carolina's. Temp is going to be around 65 or so with a peak of 70 on Sunday!

Down to business. As I'm sitting here prepping for my 1-3 pm Open House, my mind started reflecting back on some of the trials and tribulations I experienced during 2010. One of the most shocking moments I experienced was on a Short Sale transaction (go figure, right?). I can speak tell you, nothing will "suck your will to go on living" more than a cloud on the title right before closing. Now I'm not talking a tax lien or hoa lien as those are common place and can be discovered before the title search by a capable agent. No......what I'm speaking of is a credit card lien. In my transaction, the closing attorney discovered the lien on the property about a week before closing and it was a $30,000 lien! My buyer client was devastated as the transaction appeared to be dead in the water and her family had nowhere to go. Always remember, cool heads WILL prevail. I counseled with the listing agent (who was also unaware of the lien) along with the closing attorney. The plan of action was to have the attorney contact the lien holder and try to negotiate down the settlement amount to an acceptable number ... after all, if they can't settle, the chance of the cc bank getting anything in a foreclosure is slim to none. Of course the bank wasn't willing to do much as they wanted their money ... and rightfully so. The next plan was to see if the bank would release the lien attached to the home so we could free the property to close. Of course, this meant the seller would have to personally assume the balance due on their own. The problem here is that most people who are Short Sale candidates do not have the money to pay off a loan. Long story short, the seller agreed to assume the balance (in writing) so that the buyer could close on her home.

The lesson here is simple. If you are the buyer of a short sale, pay the money up front to have a title search completed on the subject property so you know what you are getting in to. A title search in the state of NC won't cost that much and is worth every penny ... after all, the deal for the buyer is in the price of a distressed home so pennies out of pocket on the front end of the transaction will save headaches on the back end! If you are the listing agent of a short sale, I would advise you to seriously consider having a title search run on the home before picking up the listing. I'm not suggesting by any stretch that a seller would flat out lie about a known lien, but sometimes, when we feel the weight of the world on our shoulders, we tend to overlook obstacles that may stand in the way of helping us achieve our goals. The third lesson .... an aggressive "never say die" attorney is worth his/her weight in gold! After all, I never like to give up and I certainly don't want an attorney representing my client to feel anything less.