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Hi, I'm currently trying to buy a house in Indiana. We had agreed to a SHORT SALE contract on March 14th. I was told the seller had already had clearance from there lender for the amount offered.
So, at that point I went ahead and had the house inspected. There were a couple of small issues, but they have all been taken care of. It took me a little longer then expected to fix these problems. The house appraisal was done earlier then we had wanted and were told, but it passed anyway. I was told that the closing process was being held up by me at that time.
Well finally we were planning on closing last Thursday only to find out the appraisal was not completed correctly. So, that was redone and finished correctly. At this point we planed for the closing to happen this Thursday instead. Well, Wednesday came around and we still had no exact time. When I called my lender to find out what was going on she tells me the seller does not have a release of a clear title yet. It has been 2 months since I was told this was clear. Here I find out it has to do with a 2nd mortgage.
Since I thought the deal was being held up by only myself I went ahead and did some repairs, locked my interest rate with a deposit to my bank (refunded when we close "IF" we close), and obviously spent money on the home inspection itself. I have over $700 invested at this point.
The worst part is I have tried to contact my real estate repeatedly, but am being ignored for over a weak now. Outside of this one email.
"As far as I know, we are still waiting on the seller's lender to clear things for closing. My guess is at this point that won't happen in time for tommorrow, but I'm waiting to hear from the listing agent that it's been cleared in order to have anything to tell your lender. "
He has been a great agent up until recently. He is likely fed up as we have been looking at properties for almost a year now and have had like 10 offers fall through within that time. When you consider we are buying a very cheap house with a low commission rate, he really isn't making much. Still this lack of comunication lately has me very irritated.
I guess what I am asking is. What is taking so long? Shouldn't this have already been taken care of? I would not have invested over $700 into this property only to find out there is not a clear title. To make matters worse the first time home buyer credit has expired. We would still get it on this house if we can close by June 30 since we had a contract in place. At this point I'm concerned we may not close at all. IF the house does not close because of a 2nd mortgage (that information was not told to me before) do I have legal rights to take them to a claims court for the inspection/repairs/bank deposit? I know I cannot sue because it is under $1000 and in our contract it states any dispute under $1000 must go to a claims court. Because It is a Short sale even if I am awarded money I likely wouldnt get it because you can't get water from a dry well. I would precede out of principal.
I know these are thing I should be asking my Agent, but he wont answer or return my calls.
Short sales are frustrating. If the second lender is holding things up, then they are. You will still get the credit as long as you can close by the 30th of June.
You shouldn't blame your agent for things out of his control. I know it's hard.
Ask what you can do, what the lender can do, what the title company can do - then make sure it's done.
I'm not blaming my agent for anything outside of not answering my calls. I actually said he has been a good agent.
I don't think there is anything left I can do on my end.
Is it common for a 2nd lender to make the entire thing fall through? That is what I am afraid of.
Happens a lot.
Why? Because often they don't get any $$ or very little at best - the first mortgage holder takes a loss already and generally is not willing to take even less just so the 2nd can get $$... 2nd lender has no incentive to go along; sometimes they hope to get something when it gets to the steps...
One of the pitfalls of short sales is that stuff can go wrong along the way. Always important to ask if there is more than one mortgage on a property; if it's not the same lender, problems are to be expected.
Sorry for your situation - hope for you it still works out!
How many short sales has your agent been involved with? According to your story, I hypothesize that your agent is not capable of driving the short sale process to close. If, indeed, the agent has only done one or two short sales and/or does not have short sale education then the agent's frustrations are understandable, but unexcusable.
Who told you all this stuff? The title company should have known there were two mortgages on it. The listing agent should have known there were two mortgages on it. I don't know how your state works, but here in Florida, as a buyer's rep I would have been able to find out there were two mortgages on it. Who allowed (written permission) you to do repairs in a house that you hadn't closed on yet?
My agent (buyers) gave me verbal permission to fix things. I assume he had clearance from the owners. The repairs I made were required for the house to appraise for closing. My lender is the one that told me that.
My agent told me that we were clear on all fronts previously. I do not believe he knew about the 2nd mortgage at the time.
As far as his experience with short sales, I just don't really know. I assume he has done some, but not many.
To palmcoasting, I know he can't do anything at this point. IF he could I would imagine he would have. After all I'm sure he would like to close and get this over. I just wish I would have been informed of the 2nd mortgage before I invested $700 into the house. I would also like phone calls answered obviously.
In representing a buyer on a short sale there was a second Lender holding out out. 13 months later (after 3 "negotiators", file being closed 4 times, dealing with Wamu 1st lien holder being bought out by Chase ....) CHase forcloses!!!! NOW, Freddy Mac is listing with another broker and they have to list it for 48 hours before they'll accept any offers. Even though they have a buyer for it...as of 13 monthas ago! CRAZY. The time frame you're seeing is not unusual. Best of luck! 2nd lien hold got $0 btw....
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