What to do? Buyer's side not cooperating, it seems
I probably should have sought some assistance from you folks sooner than now, but I'll at least put this out there for others facing this.
This transaction was doomed from the start, but the seller had little to lose, in their mind. A buyer made an offer on their listing several months ago. It was a good offer, coming in about $5k higher than the listing price. We got everything signed and the Short Sale package submitted to the lender. The lender, Chase, responds in normal time, but with a counter offer a little higher than the buyer's offer price. The buyer initially starts working to meet the lender's counter, but things stall and return contact from the buyer pretty much trickles away. They had asked for an extension on the approval, but they could never provide us with a loan commitment or any other proof that their financing was being pursued. The negotiator would not extend without some proof the buyer was making efforts. So, the contract falls out, and we put the listing active again, raising the list price by $12k to account for the lender's "approved price".
Fast forward about 2 months and we get another offer on the property. This time, the offer is at the new list price. Great! Then, we see that the buyer is the same as the last time. I tell the seller this and suggest they request a loan commitment letter from the buyer prior to accepting the offer. It takes several days, but the buyer finally produced something they called a loan commitment letter, but wasn't much more than a one page letter on mortgage broker letterhead essentially stating "this is a loan commitment letter." Not what I'm accustomed to seeing, but the seller accepted it and we moved on.
We get a new SS approval in short order, and throw it back the buyer, expecting things to happen in a normal timeline. Well, we get within 2-3 days, the buyer's agents calls to ask for an extension on the SS approval. They need another 3 weeks. Graciously, the negotiator extends it to Dec 21st and gives us a new letter, but tells us, "No more extensions after this."
Well, we get to within 7 days prior before the expiration date, but still have no clear-to-close. It doesn't even look close to getting one. The title company is getting very little response from the buyer's mortgage broker, and they seem to be hesitant to give much info. Based on that, the title co holds off on ordering the survey, because they doesn't want to get stuck with that cost if the deal doesn't close. They even ask someone from the buyer's side to provide a CC number to pay for it. No response.
Now, we're 4 days away from closing. I tried calling and emailing the buyer's agent, but get no phone call and no return email. I then call her broker to see what he can do. He takes my number and says he'll call to light a fire under her and hopefully she'll get back with me by end of day. Well, that never happened. So, that night (this past Thursday night), I send an email to all parties, including both RE brokers, the title co, and the mortgage broker contact. The only one from the buyer's side to respond was the mortgage broker contact. All he could say is that they have "full loan approval" but are awaiting the clear-to-close. Huh? I thought those two were synonymous. He also stated he knew of no problem with the buyer.
Well, Friday (yesterday) comes and goes. All the mortgage broker contact would offer is an email address to another person in their company. And, I still didn't get any further contact from the buyer's agent or her broker...well, until last night at about 7pm. After numerous phone messages and emails, all she responds with is this email message, "I apologize for any delays. Left town for the holidays g et with [mortgage company]. Thought this was handled". That was it. Nothing. I was driving when I got the email, so I couldn't respond. Honestly, I'm at a loss and don't know how else to handle it. Oh, and she conveniently stripped from the distribution list her broker, my broker, and the title company, leaving just me and the mortgage broker contact. I think I should forward her email response to her broker, just so he sees what she said.
So, here I sit, typing this message, having full confidence that this deal is dead. The contract is already past the closing dates, so the seller is entitled to the $5,000 binder, but that's really besides the point. It still leaves the seller with a property that's going to foreclose. That's binder deposit isn't going to change things. And, for me, I get nothing from a listing I've had for more than a year. That's the risk in this business, though. I'll eventually get over it.
What should I do next, if anything? And, I'm not even concerned about what's going to happen with the property. I'm asking about dealing with folks on the other side of this transaction. Clearly, these folks didn't do what they should have done, otherwise, we would have a closing by noon on Monday. That just ain't gonna happen at this point.
Thoughts?
This transaction was doomed from the start, but the seller had little to lose, in their mind. A buyer made an offer on their listing several months ago. It was a good offer, coming in about $5k higher than the listing price. We got everything signed and the Short Sale package submitted to the lender. The lender, Chase, responds in normal time, but with a counter offer a little higher than the buyer's offer price. The buyer initially starts working to meet the lender's counter, but things stall and return contact from the buyer pretty much trickles away. They had asked for an extension on the approval, but they could never provide us with a loan commitment or any other proof that their financing was being pursued. The negotiator would not extend without some proof the buyer was making efforts. So, the contract falls out, and we put the listing active again, raising the list price by $12k to account for the lender's "approved price".
Fast forward about 2 months and we get another offer on the property. This time, the offer is at the new list price. Great! Then, we see that the buyer is the same as the last time. I tell the seller this and suggest they request a loan commitment letter from the buyer prior to accepting the offer. It takes several days, but the buyer finally produced something they called a loan commitment letter, but wasn't much more than a one page letter on mortgage broker letterhead essentially stating "this is a loan commitment letter." Not what I'm accustomed to seeing, but the seller accepted it and we moved on.
We get a new SS approval in short order, and throw it back the buyer, expecting things to happen in a normal timeline. Well, we get within 2-3 days, the buyer's agents calls to ask for an extension on the SS approval. They need another 3 weeks. Graciously, the negotiator extends it to Dec 21st and gives us a new letter, but tells us, "No more extensions after this."
Well, we get to within 7 days prior before the expiration date, but still have no clear-to-close. It doesn't even look close to getting one. The title company is getting very little response from the buyer's mortgage broker, and they seem to be hesitant to give much info. Based on that, the title co holds off on ordering the survey, because they doesn't want to get stuck with that cost if the deal doesn't close. They even ask someone from the buyer's side to provide a CC number to pay for it. No response.
Now, we're 4 days away from closing. I tried calling and emailing the buyer's agent, but get no phone call and no return email. I then call her broker to see what he can do. He takes my number and says he'll call to light a fire under her and hopefully she'll get back with me by end of day. Well, that never happened. So, that night (this past Thursday night), I send an email to all parties, including both RE brokers, the title co, and the mortgage broker contact. The only one from the buyer's side to respond was the mortgage broker contact. All he could say is that they have "full loan approval" but are awaiting the clear-to-close. Huh? I thought those two were synonymous. He also stated he knew of no problem with the buyer.
Well, Friday (yesterday) comes and goes. All the mortgage broker contact would offer is an email address to another person in their company. And, I still didn't get any further contact from the buyer's agent or her broker...well, until last night at about 7pm. After numerous phone messages and emails, all she responds with is this email message, "I apologize for any delays. Left town for the holidays g et with [mortgage company]. Thought this was handled". That was it. Nothing. I was driving when I got the email, so I couldn't respond. Honestly, I'm at a loss and don't know how else to handle it. Oh, and she conveniently stripped from the distribution list her broker, my broker, and the title company, leaving just me and the mortgage broker contact. I think I should forward her email response to her broker, just so he sees what she said.
So, here I sit, typing this message, having full confidence that this deal is dead. The contract is already past the closing dates, so the seller is entitled to the $5,000 binder, but that's really besides the point. It still leaves the seller with a property that's going to foreclose. That's binder deposit isn't going to change things. And, for me, I get nothing from a listing I've had for more than a year. That's the risk in this business, though. I'll eventually get over it.
What should I do next, if anything? And, I'm not even concerned about what's going to happen with the property. I'm asking about dealing with folks on the other side of this transaction. Clearly, these folks didn't do what they should have done, otherwise, we would have a closing by noon on Monday. That just ain't gonna happen at this point.
Thoughts?
Replies to This Discussion
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Permalink Reply by Katerina Gasset on
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In the future make sure the buyer gives you a loan commitment letter subject to appraisal, insurance and review of title. Also, have the buyer fill out a buyer intent form that if you are in Florida you can get from transaction desk at FAR. BB turned me on to this form, now if anyone hesitates with this form, the seller won't take the deal.
What you can do at this point is governed by your purchase and sale agreement. In Florida in the FAR BAR AS IS, the buyer can get a denial letter from their mortgage company and they are out. -
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Permalink Reply by Kent Dills on
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Eric,
You could be right that this isn't going to happen, but....
1. I wouldn't give up yet - but then I'm a glutton and never say die. Old military dude here :-)
2. Until 12/21 comes and goes this deal could still close, and even then it could still close - stranger things have happened.
3. I''m not a loan officer/mortgage broker but I think that the difference between "full loan approval" and "clear to close" is subtle but important in these tight lending times. I think the difference is that "full loan approval" means the loan is through underwriting; "clear to close" means the lender actually has the funds in cash that are available and committed to wire to the title company. In these tight lending times, not all banks are liquid from moment-to-moment to enable "clear to close" almost automatically as in the past upon "full loan approval".
4. Call the buyer's agent (now that she IS back in town - nice to know) and try to light a fire under her to be the one who "sits on" the buyer's lender. That's her job not yours - but then you knew that already.
5. The lack of communication on the parts of the buyer's rep., the buyer' broker, and the buyer's lender represents a total lack of professionalism and professional courtesy; this seems to be a growing problem these days. When people have bad news or no news they just clam up. The problem is, you can't address the issues/problems if you don't know about them.
Keep your chin up, sound's like you've done a great job on your part so far!
;-) -
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Permalink Reply by Stephanie Lim on
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I have found that we have a much, much harder time when there is a mortgage broker involved with only a couple of exceptions in our area. So I guess the loan contingency period has expired and they didn't cancel. It's hard to tell if the agent is lazy, or was misled by the broker or both. It seems like it's tough to get the buyer agent and buyer to take short sales seriously (and the timing) in our area. Do you have a good title company that can lean heavily on the broker and try to help sort it out? I would do that, and contact the broker repeatedly myself trying to get some answers about what is really going on! Squeaky wheel...
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Permalink Reply by Eric M. Boyd on
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Stephanie,
I left a message with the broker on Friday evening, after hours, but haven't yet received a call back. My title company is really good about "squeaking" about stuff. It's unfortunate, though, that the mortgage broker folks have made it near impossible to speak with anyone. It truly makes no sense, if these people really wanted to buy the house. Need I even ask, "where's the buyer in all this?"
Eric
Stephanie Lim said:I have found that we have a much, much harder time when there is a mortgage broker involved with only a couple of exceptions in our area. So I guess the loan contingency period has expired and they didn't cancel. It's hard to tell if the agent is lazy, or was misled by the broker or both. It seems like it's tough to get the buyer agent and buyer to take short sales seriously (and the timing) in our area. Do you have a good title company that can lean heavily on the broker and try to help sort it out? I would do that, and contact the broker repeatedly myself trying to get some answers about what is really going on! Squeaky wheel... -
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Just a quick update on this. It seems we're getting through to the mortgage broker on this, and they are now saying they need another extension. Ugh! (Am I justified in blasting emails back to them because of their nonsense?) I told them that I need a request, in writing, from them to make this request of the negotiator. I have already spoken with the negotiator, just to keep him abreast of the situation and I get the feeling he's willing to work with us, but I told him we've asked for a written request, or proof of some sort, that this is gonna go through.
I still haven't heard anything more from the buyer's agent. I've even spoken to their broker twice today, as well, who hasn't heard from her, either. He said the few voicemail messages he as left for her have been comprised of an ultimatum. He anticipates her needing to find another broker very soon. So, a question I have about this portion of this is about procuring cause. It seems like the buyer's agent has NOT been a pivotal part of this deal closing, since she hasn't kept up with the status of the transaction and hasn't kept in communication with her broker and probably not the buyer, either. Do I have a procuring cause claim, here? Or, should I just let this bad behavior go untouched? I've never approached this topic before, so this may not have anything to do with procuring cause. I'm open to opinions here. Thanks. -
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Permalink Reply by Bryant Tutas on
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Eric, This sounds like a normal deal in my neck of the woods :). If the contract has expired then place the property back on the market. Quit trying to reach the buyer's agent and deal directly with the mortgage company if they are the ones responding. Request to see the commitment from the lender in order to keep the deal on track. If the loan has been approved then they should be able to provide this with no problem. If they can't then suggest to the seller that you move towards finding another buyer. That's really all you can do.
I doubt Chase will foreclose. If they have already given an approval for the SS then probably they will wait for another buyer.
Procuring cause has nothing to do with this deal. Just work on getting it closed for your sellers. -
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Just wanted to keep this updated. The seller decided to cancel the contract and stake claim in the binder deposit. As expected, the buyer's agent says the buyer will fight this and try to get back their deposit. (oh, and the agent finally decided I deserved a phone call. LOL ) We're clearly beyond the timeline established for obtaining financing, and the contract is very clear on this. I've never been through a binder dispute, (interpleader action, etc) so this will be a learning experience for me. Any tips from you Florida folks? And, at what point is this contract actually considered canceled, so that I can place the listing back in Active status? (I'm waiting for a response from my broker on this same question, too.)
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