Another Short Sale Success Story

 

Just over one year ago, one of the buyers from another short sale listing that I had asked me if I’d be able to help out a colleague at his work.  His colleague had expressed to him that she was needing to do a short sale of her property.  I received a phone call not long after that exchange from her, and I was soon over at her house, learning more and discussing her options.

It turns out that she and her husband had experienced some severe financial difficulties with a family business that went south a few years ago when the economy was at a very low point.  They had tried to do a loan modification with the assistance of an attorney, but it just wasn’t enough to cover all their expenses that had accumulated since the lost of their business.  The IRS had also placed a tax lien on the property due to income taxes owed that were related to their business that no longer existed.

My client was very good at trying to work things out.  They were able to consolidate their debt and pay it down slowly.  They were able to work out a payment plan with the IRS.  However, they just could not not keep up with the payments on their beloved home.

Shortly after contacting me, my client decided to apply for the HAFA program and try to get a pre-approved list price before putting the property on the market.  Bank of America was the 1st lender, Wells Fargo had the subordinate liens, and then there was the IRS tax lien.  By early this year, my client had received written notice that they were being considered for a short sale under the HAFA program, but we noted that the pre-approved list price was way too high for what homes were worth in the area by that time.

We put the house on the market very quickly.  Unfortunately the offers we were getting were well below what the bank was willing to accept at that time.  We accepted an offer from a buyer who was willing to wait an exceptionally longer time for this short sale (another 4-6 months was what we were estimating) since not only did we have to justify the lower price with the bank under the HAFA program, but we also had to then deal with the subordinate liens with Wells Fargo along with the IRS tax lien.

The months went by, and luckily we were able to negotiate with Bank of America to accept the buyer’s offer price — no counter offer of the price this time, which was great for the buyer.  We were able to work with Wells Fargo too, juggling their demands at the same time.  The IRS tax lien was the last piece to deal with, but we eventually were able to request the lien release upon receiving written approval from both lenders.

But here’s the really great news: Bank of America recognized that we had initiated this short sale to obtain a pre-approved list price before under the HAFA program, so we were then eligible for their new Pre-approved Price Short Sale Program as well, which allowed the seller to receive (in this case) over $20,000 in relocation assistance!

Those months of waiting certainly were not easy though.  My client was under a lot of stress just trying to make ends meet, as well as planning for their upcoming move to a rental property.  The buyer was patiently waiting but getting antsy as well.  Thankfully the buyer’s agent was excellent and maintained great communication with us throughout the transaction. But in the end, my client was able to be relieved of their mortgage debts, their IRS debt, and moved to their new rental home with a substantial amount of cash to help them start this new, debt-free chapter of their lives.

If you’re finding yourself in a similar situation with your home in Orange County or surrounding areas of Southern California, feel free to contact me to find out how you can perhaps find some relief as well.

 

 

Leave a Reply