Her Most Challenging Short Sale: The Shell Game

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W Condo

This unit at the W is for lease for $2,995 a month. Imagine selling a shell here with zero finish-out!

Even though we love real estate, there is one thing we all know: Mortgage note holders don’t have a lot of patience. If you’re behind on your mortgage payments for more than three months, most mortgage companies are not going to sing Kumbaya.

That’s why, if you know that your income will not be sufficient to make the house payments going forward, it may be time to consider a short sale on your home lickety split. A short sale can help you avoid foreclosure and salvage your credit rating while still letting you liberate yourself from your home loan.

And yes, even in hot markets like our current one, there are still short sales.

Homeowners often wait until they receive a notice of foreclosure from the lender before starting the short sale process. In some cases, it’s already too late. Each month I grab our short sale expert, Nicole Espinosa  of DFW Short Sale Experts, whom we have chatted with previously. This month I ask: what was your most challenging sale to date?

CandysDirt.com: Come on, spill it!

Nicole Espinosa: To date, I think one of the most challenging short sales I have had was with PNC.  At times it felt impossible to get done. They owned the note on the home, which means they had the right to make the final decision on the approval of the short sale. They were a nightmare to deal with. In fact, the previous agent who worked on the sale before I did had it for 6 months and referred it to me with a foreclosure date.

CD: Well that was nice! (NOT!)

NE: No, I spent weeks trying to get it postponed to undo what that other agent did. Finally I was able to talk to the vice president of the company and plead my case. After I got through all of that, and I was successful getting the foreclosure postponed, I still had 7 months of hurdles. They shut down the file every chance they got, they had deadlines they wouldn’t relay to me despite my office calling on the file every other day.

CD: OMG did you give up finally?

NE: No! After 7 months I was finally able to get approval. The negotiator emailed me and said “congratulations for making it this far.” It was like a reward. At that point I was just so happy to get it done, and so was my client.

CD: I’ll bet! You mention that it was with the bank, PNC — are some banks more difficult than others when it comes to short sales? Are any two short sales ever the same?

NE: No, they are not. It all depends on what kind of loan it is. Every bank has its own processes. An FHA short sale is completely different than a conventional. Knowing the processes is half the battle, so when the bank tells you no to the short sale, you know how to go around it and make it work. In the 5 years I have been doing this, I have never come across a short sale that is the same. That’s why it helps to do so many of them, the more you do the more you learn how the bank works.

CD: You once told me of a short sale at The W. I used to dream of buying bargain homes at the W. How did this one come into play? (And why did I not know about it?)

NE: This was a fun one. My client had 5 units that had no furnishings, walls, plumbing, nothing — a huge shell. His plan was to finish it out and make it a very large penthouse. He purchased at the top of the market and over paid, so when he was unable to do the renovations and got into a financial hardship he could not sell. Since there was literally nothing to compare these units to for comparative sales, it was such a unique short sale.

CD: Nothing else out there like ’em. Unique beasts.

NE: Yes! The bank could not wrap their heads around the fact that these were unfinished units. They sent 8 different appraisers out who all came back with different estimated values. Some would get the order, call me to discuss, and then reject it because it was basically a guessing game and they had no idea where to start.

When I started these short sales there had not been a sale in the building for over a year, and the last sale had been a luxury  listing that couldn’t even begin to compare to our units.

CD: How in the world did you sell these?

NE: We had to find a buyer who was willing to purchase all of them at the same time. If you know the W , you know that the HOA dues are high, so it takes a particular buyer to want to take this on. So we were now looking for a high-end buyer who was willing to purchase all of them separately, be patient enough to wait as I figured out how to get the bank to approve, and be willing to take on these very high HOA dues.  Since the bank financed all of these units individually, the buyer would need to close on each one separately. What a mess. In the process the lender tried foreclosing on 3 of them, the HOA tried foreclosing, and the bank denied the short sale about 5 times. At this point I knew I had to do something other than try and get the negotiator(s) to understand.

CD: I would have been doubling up on Xanax.

NE: I ended up talking to the executive offices to try and get someone to understand what we were dealing with. After 8 months I finally started getting approvals. We closed each one at separate times, within 2 months of each other when we finally closed the last unit. When it comes to short sales  it’s never about the money, it’s about fighting for these clients and getting it done. Each one I complete is a personal victory for me.

Nicole Espinosa

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Candy Evans, founder and publisher of CandysDirt.com, is one of the nation’s leading real estate reporters.

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