Helping a Buyer Avoid a HUGE Mistake and Pulling A Deal Out Of The Fire
Posted 09/25/2010 by Anonymous
Michael Neville's Blog
Wakenda S Flynt, Senior Loan Officer
1125 Commerce Drive, Suite 100,
Peachtree City, GA30269
By Michael Neville | Agent in Atlanta, GA
So, we all know there are a lot of people with real estate licenses - heck everyone seems to have a cousin or an aunt, etc. who claim to be agents, yet there aren't a lot of truly seasoned & talented REALTORS. With so few barriers to entry in the field it makes it that much more confusing for buyers & sellers to not bump into one of the inexperienced agents.
My client did just that prior to working with me, she had a family friend who she felt obligated to work with. I've known her for years as we rolled in the same group of friends and while it was disappointing to hear, it happens in our industry so you just have to keep moving forward. Right before the tax credit expired she let me know she just got her offer accepted on a foreclosure in a townhome subdivision close to her extended family on the east side of Atlanta (Decatur to be more specific).
As soon as she told me where it was a red flag went off in my head & I had to check out both the listing and the development. Within an hour I had confirmed my fears for her financial well-being.
#1 She agreed to pay 15k more than other comparable properties in the development were going for. #2 The development was NOT approved for FHA loans, which was the type of financing she needed to be able to close on the deal.
This meant that if she stayed under contract she was putting herself at risk of losing her earnest money as her, she would have paid for an appraisal that never would have lead to a loan approval, and paid for an inspection of a property that never should have taken place if it was clearly stated she couldn't get a loan on the property. I called her as a friend at this point and let her know she needed to pull out ASAP due to all of these factors, she could have lost $1,800 cash if she didn't.
Not to mention, this was the end of April......so pulling out of the deal also meant she wasn't going to get the $8,000 homebuyer tax credit.
To say the least, she was understandably upset & frustrated by the process, but at least I was able to present the important facts to her and help her AVOID a HUGE mistake, that the "professional representation" she had at the time should have checked/verified, etc.
After the dust settled and a few months passed she came to me and asked if I would be willing to assist her, no longer just as a friend, but as her professional representation. We discussed a number of key factors for her situation and the options in front of her. It wasn't going to be an easy find but we'd patiently & diligently make sure she got into the right situation for her needs.
We looked all over Atlanta from classic four-sided brick ranches to multi-story newer construction. She wanted a deal so resales were eliminated, the short sales we looked at weren't being handled by qualified/experienced short sale specialists (it's easy for us with CDPE - Certified Distressed Property Expert designations to ask a few questions & know whether the listing agent has a clue or not about the real in's & out's of the short sale process), so we focused on foreclosure opportunities.
While looking at a few in a location she like there was a much larger and higher priced (out of her desired target range) foreclosure. I've worked with that listing broker in the past & asked to be kept informed if anything changed dramatically in the future. Of course, she fell in love with the 1 house that we couldn't go for at that time - an incredible 4 bedroom 2.5 bath well over 2,000 sq.ft.
2 weeks later.......the price dropped SIGNIFICANTLY & was now in her price range, which I knew was done by the bank to create a bidding war, since it was the lowest price ever for this size home in the development by more than $20,000. We made a solid offer above the new list price & having a solid track record of getting deals done and a good co-op experience with the listing broker helped ensure our offer was viewed well in the eyes of the seller.
We got the offer accepted and the Buyer chose to work with the lender she used in the previous transaction (she felt loyal since it had been such a long time of working with someone) & she planned to get ADA - Atlanta Development Authority DPA - Down Payment Assistance funds for this foreclosure within the city limits. Everything was going smoothly (with ADA DPA involved the contract to close process tends to take 45-60 days).....until 15 days before closing the loan officer from Bank of America who'd she'd worked with for months getting the necessary documentation together for said she was going to be DENIED for the loan & the "DEAL WAS DEAD"!?!?!?!?!?
Once again, she was devastated - this time it was even worse since the finish line was so close & he'd been working with her for more than 6 months...giving pre-approvals, guidance, suggestions, etc.
I told her give me one last chance to save this deal....I was going to work with the listing broker to get an extension on the closing, waive the per diem (in foreclosures if you close late they legally have the right to charge you a daily penalty per their contract addendums) & she needed to call my go-to contact person for any/all ADA DPA loans - Ms. Wakenda Flynt with Embrace Home Loans, who'd just saved a deal the week before for another buyer facing a challenge.
WITHIN 2 WEEKS - We had her loan approved not only with the Lender but also with city of Atlanta ADA DPA, the listing broker got the asset manager to waive the standard review period & CLOSE WITHIN HOURS of receiving the HUD-1 settlement statement and closing instructions.
THIS IS UNHEARD OF in 2010 & it all came together with a great collaboration from all parties involved.....pulling the deal out of the fire and helping her move into her dream home! (see below)
If you or anyone you know has experienced any of these frustrations/challenges like my past client & need to make a similar change -- let them know "Call Mike for Results You'll Like"
#1 Individual Agent Keller Williams Realty Atlanta Midtown
CDPE - Certified Distressed Property Specialist