I closed a short sale last week - where the servicer was EverHome and the investor was Fannie Mae - that took a very interesting turn. The offer was submitted in the beginning of Sept right after Labor Day. By Oct 12th I had a counter offer (contract price was $3,000 below minimum NET proceeds). Most people would say this was a great turn around time and everyone would be happy. Here's the catch. A foreclosure sale date had been scheduled for Nov 1st and the negotiator asked "if it was approved would we be able to close by Oct 30th." The reason provided was that Georgia is a "restart" state- meaning if they postponed the foreclosure and the short sale did not close for any reason they would have to restart the foreclosure process- and pay more fees to do so.
To make things even more interesting, there was a second mortgage with GMAC. Everything had been uploaded to Equator but we didn't have approval from them yet. So from the day Everhome hinted at an approval but advised they would not postpone the foreclosure- left us about 14 business days. This isn't much time for the buyer and their lender especially without even having written approvals in hand. So I forged ahead with GMAC and made sure they knew the first was foreclosing if we didn't get all of our pieces of the puzzle together (so they better hurry up and give me an answer). The first offered GMAC 6% of the principle balance (right around $3,000), GMAC asked if they could get $6,000. I told them no and I very quickly had an approval letter. The buyer's agent started having trouble reaching her client and we were losing precious days trying to get reach her and keep things moving forward. Luckily, I had a back-up offer from a cash buyer.
There were a lot of moving pieces and things were moving at a fast pace- making this one of the more challenging short sales I've been involved with. But the challenge is what I love and learning something new from each transaction. I took two lessons away from this one. The first- TIME IS OF THE ESSENCE. We say this all the time in real estate but with short sales we expect the process to drag on and I think that causes us to lose our sense of urgency a little. Also, due to so many past experiences, I have fully come to expect the investor to grant a postponement of a scheduled foreclosure as long as we have a valid short sale offer on the table. However, in Georgia at least, there is a real financial consideration for the investor to stop or revisit this practice. I would be very curious how much money is spent on legal fess to initiate the foreclosure process and how many times they postpone only to end up foreclosing on it in the end. Secondly, I was encouraged by the team work that was encountered to pull this off. The two negotiators were quick to respond and decisive. Once we got down to it, everyone knew what it would take and worked together to get it done.