Los Angeles Living

The short sale is approved!

Just when you have almost forgotten that you have made that offer on a short sale and your buyers have lost faith you get the call. 

I was minding my own business, literally, as I was about to extend the short sale addendum and had sent it off to the listing agent for signature, when I must have rattled his cage.  He called me immediately to tell me that it was approved.  In fact, he told me before he told the sellers.

So now you have the great pleasure of telling your first-time buyers that their offer has been accepted.  And you can hear the shock in their voices.  And shock it is.  It is now real.  Before it was like play-acting the role of buyer.

There is a weird feeling when you hear those words "the short sale is approved."  You are not really prepared to move ahead and now have to start scrambling to put everything together. 

Fortunately you did have an inkling that things were moving and you had recently informed your buyer that they had better get in touch with their lender to get things back on track.

You have to explain again to your buyers how the process is going to work and what they must expect: 

Just because the offer is accepted there is still a lot of negotiating to be done.  You know they have allowed some dollars for things like retrofitting, title insurance, transfer taxes, etc. but you know they are not going to pay for the termite inspection and any work involved. 

Also, who knows what problems may be found during inspection which will most probably not be paid for by the lender. 

This is the real buying process.  The rest was just practice. 

But, how sweet the sound........

There is a law pending Gov. Schwarzenegger's approval that would allow Buyers of foreclosed properties to choose their own Title and Escrow companies even though a law exists forbidding the directing of this business to specific companies.

Banks use the same companies because it makes it easier for them to conduct business with just a few people rather than scattered all over the state. However, this has led to numerous complaints from agents citing that the escrows are far from smooth, and sometimes fall through.

It also does not make sense for an escrow company in Los Angeles to handle a transaction in Sonoma.  The rules differ from city to city, let alone county to county. And agents in Northern California can't just walk into the escrow office and talk to the officer face-to-face.  It would also appear that the neutrality is compromised because those escrow companies have a strong relationship with the bank.

The common thought is that service at the title and escrow companies would improve if the buyer had chosen them.

The danger is that the buyers will end up using the bank's choice anyway because the bank will turn around and refuse to pay their end of the fees.

Let's see what happens!