This is the current situation with our short sale. A buyer made an offer on our house on December 6. There was some negotiation back and forth between the buyer and our bank. The final settled upon price is 5% less than our list price, and 9% more than buyer’s initial offer. So, that’s done. We have an agreed upon, contract signed price for our house. That was last Thursday.

Why did it take two months to agree upon a price? The reasons are too many for me to list, or even for me to remember for that matter. I’ll comment on one of the reasons, though. When the title work was being done, it was discovered that there was a second mortgage recorded on the property. We proclaimed that “We have no second mortgage on the property” And we didn’t, and we don’t. In fact, as clear as day, the mortgage was recorded to Frank and Jody W., the previous owners! The previous owners had taken out a mortgage on this house, before we bought it, to build a new house, and the mortgage wasn’t taken off the house when we closed on it, eight years ago! So, getting that figured out added about a week to the process. But, I digress.

As I’ve mentioned in previous posts, our buyer is getting financing through USDA Rural Development. The folks at USDA RD do not want their buyers to purchase crappy, in disrepair houses that their new owners would be ashamed to own. Fine. So, USDA RD has a whole check list that a home inspector goes through to deem the house worthy of a USDA RD sale. Any deficiencies are to be repaired before close, at either buyer’s expense or seller’s expense, as negotiated. Also, buyer does not have mortgage approval. He has a pre approval letter, but not an actual approved mortgage. As both of these items (the inspection, and the mortgage) are an expense to buyer, he did not want to proceed with them until after the price was agreed upon. So, maybe he’s started on these now, but not prior to last Thursday.

The original, agreed upon closing date was Feb. 4. About 2/3 of the way through the price negotiation period, it became clear that we would not meet the original close date. So, we extended to close date to Feb. 28. When the price was agreed upon, the close date was extended to Mar. 15. Just to add additional time for buyer to get his part wrapped up. We were about to agree to that Mar. 15 close, when the short sale rep from our bank said “Wait a minute, the BPO expires Mar. 6”. What’s a BPO, you may ask? We didn’t know, either. It’s “Broker’s Price Opinion”. Our Realtor gave her best opinion of the actual market value of the house back in December. It’s good for three months. And, the Realtor has to wait until the current BPO expires, before giving a new one.

Why don’t you close on March 5th, you may ask? I asked the same thing. Our Realtor has seen enough RD loans, that in her opinion, the inspection/repair process is very unlikely to complete before six weeks.

Our current contract with our Realtor also expires Mar. 15. If buyer does walk, we will get a new Realtor. Some of the reason this has taken quite as long as it has is due to her inexperience with short sales. That has become evident to us. Also, if we have to go through this process again, from the beginning, we will be more experienced. We will know that we have three months from the start, before the BPO expires. We will also know what price range the bank will accept, so we can do some of the negotiation before the offer gets sent to our bank.

So, we’re keeping our fingers crossed that this sale happens. This is closer than we’ve ever been to a closed sale, but we’re not holding our breath either. And, we sure hope that the next offer comes from someone with conventional financing. I’m working on a rant about who is and who isn’t getting approved for financing these days. But, I’ll save that for later; I’ve said enough for now.