by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
It all started in mid 2006. I sold a small house in Glen Ridge for way more than its asking price. Needless to say, the sellers were quite pleased with me.
Three years later that seller was happily re-settled in his new house when he called me. He and I had kept in touch as his domicile changed and his family grew. In that phone call he told me of a friend of his in Glen Ridge who was going through some tough times. She was a retired senior citizen, her husband had just died and she could no longer carry the expenses of the home. He wondered if I would talk to her and see how I could help her. Of course, I agreed.
The result of my meeting with the lady was a listing for a short sale which I took in January of 2010. Little did I know I would break all endurance records before bringing this transaction to a successful conclusion.
The first 3 years, or so, of this short sale were spent trying to get the lender’s attention. We were shuffled from the original lender to another lender and nothing was forthcoming from either. This may have had to do with the moratorium on foreclosures in New Jersey which just ended sometime in 2012. Getting anyone from the lender on the phone or getting a response from the lender to an offer was impossible. We had also reduced the price a couple of times and had some very low offers which we couldn’t act on without any communication from the lender of the moment. As a result, those buyers disappeared.
Then, in 2013 the mortgage was sold to yet another lender who, right away, seemed more communicative. Of course, every time we switched banks we had to start the paperwork all over again for the short sale. Short sales have an astounding amount of paperwork and with the HAFA program for short sales the Federal Government is involved – more paper.
A year’s worth of back and forth with the new lender led to their foreclosing on the property. They did not, however, send it to auction. They kept it on their short sale desk.
The seller had moved out so, naturally, I had the plumbing winterized and supervised the preparation of the empty house which now had no heat or utilities.
A string of prospective buyers went through the property because it was inexpensive for Glen Ridge but it was a mess. It needed major renovation, had a buried oil tank and there was no relief for a buyer from either the lender or the seller.
The original seller’s attorney was arrested – nothing to do with us and I won’t give any more details but, at this point I’m thinking “why not?”, everything else has gone wrong, including a break-in and burglary. We then were represented by a law firm that specialized in short sales and their patience ran out in 2013 when no progress had been made. They then demanded a retainer from the seller who could not afford it and we lost yet another attorney. I then shopped this deal around to multiple lawyers all of whom took one sniff and also demanded a retainer. Finally I found a local attorney who would take this on – bless her heart – with only a fee at closing. I promised her to do most of the heavy lifting so as not to take advantage of her good graces.
Finally, in late 2013 we got a buyer who made a legitimate offer and the lender rejected the offer. At least I had heard from the lender. Then the lender told me to list the property $200,000 over the current listing price and to put it on the foreclosure site Hubzu. I refused. The price was ridiculous and I wasn’t going to waste any more time on this under those circumstances. I told the lender, no, and they could take the property and do whatever they wanted with it.
It was revealed that their higher price point was the result of a drive-by BPO (broker’s price opinion). These are done by REALTORS who don’t do much else, they get paid $50 to $100 for each BPO, they don’t always know the market area and they probably don’t really care for the small pittance they are paid. This REALTOR had not gone in the house and established his, much too high, opinion of value based on looking at the outside only.
I told the lender that, if they wanted to continue with me, an appraiser, not a REALTOR, would have to inspect the house inside and out. The buyer offered to hire an appraiser but the lender would not accept findings from anyone hired by the buyer. After quite a few more phone calls I began dealing with some people at the lender who seemed to be on the ball and I convinced them to send an appraiser at their expense – which they did, finally.
The appraisal must have been correct because, after that, things started moving more quickly. By now we were in 2014 and I had long since given up much hope of seeing a dime from this deal. But I did keep the process going. They buyer made a counter offer which the lender seemed to like and we went through attorney review (1 year) and emerged with a binding contract. Then, another offer appeared for similar money. The lender told me to go back to both and see if they would sweeten their offers and both did. The original buyer was slightly higher at this point and the lender chose him and told me to proceed toward a closing.
You would think we were close to the finish line – but think again. I had the seller’s attorney submit multiple HUD1 settlement statements to the lender as we hashed out the dollar details. Then I started dealing with the 2nd lien holder – oh, yes, there were 2 mortgages. Junior lien holders usually take a bath on short sales and it makes them cranky and uncooperative. This one was no exception. Weeks worth of back and forth finally resulted in a dollar figure they would accept. Bear in mind my objective was to obtain agreement with both lien holders that my seller would not be pursued for any deficiencies given the lower sale price so that needed to be negotiated.
Finally, in late March 2015 after the buyer had closely inspected the property and was comfortable with its condition and after he had ironed out all the details with his lender and I had obtained the municipal Zoning Compliance Certificate (I held my breath during that inspection), we closed the transaction much to my seller’s relief and to my amazement.
I was given hearty praise for sticking through this deal but I only felt I had done what I was supposed to do. It’s not about the money. It’s about doing what’s right. It’s not even so much what’s right or helpful to anyone else. I don’t look for medals for what I do. It’s what I can feel good about when all is said and done.
Can’t get enough of my opinions? Take heart. I have another (non-real estate) blog called “The World At Large by Jim Stefanile – Thoughts On Everything Else”.
This month’s post is “Saddest of Smiles” Chapter 1 of the history of my family. I hope you can visit: https://jimstefanilesotherblog.wordpress.com/2015/04/29/saddest-of-smiles/