SPS Short Sale
Michael Gaddis recently closed a SPS short sale at 1221 Via Mil Cumbres, Solana Beach, CA. Originally, the lender was Bank of America, however, the servicing of the loan was transferred midway through the short sale process to Select Portfolio Servicing (“SPS”). Due to the fact that the home was dated and had deferred maintenance obtaining a buyer was somewhat difficult. However, Michael Gaddis received an “all cash” offer that was on the low end of being a reasonable offer. Although the offer pushed the limits on reasonableness, the buyers were fully aware of all of the potential issues surrounding the property and were willing to take the property in AS-IS condition. Michael Gaddis made the buyer’s agent well aware that it was possible, and likely, that, if their offer was accepted SPS was going to counter them. The buyers understood and told Michael Gaddis that they were somewhat flexible in their number. Michael Gaddis advised the homeowners to accept the offer and it was quickly submitted to SPS for review. The negotiation process took some time due to the fact that, just as Michael Gaddis had predicted, SPS countered. The buyer and SPS went back and forth over the course of 6 weeks during which time the buyers substantiated their offer with quotes from contractors while SPS ordered an additional appraisal. Finally, the buyer and SPS agreed on $920,000 as a purchase price. Subsequently, Michael Gaddis and the buyer waited for the approval, which for some reason, despite an onslaught of pressure from Michael Gaddis, took longer than expected to procure. The day that the approval was procured Michael Gaddis contacted the buyer’s agent and was immediately told that the buyers were walking away from the transaction. The buyer’s agent did not have a reason why other than they were no longer interested. However, the buyer’s agent told Michael Gaddis that she had another buyer who was willing to purchase the property for the same terms. Michael Gaddis promptly notified SPS of the change of buyers and SPS began the process of re-reviewing the short sale file in order to issue a new short sale approval.
When the new approval was issued by SPS the buyer and seller quickly entered into escrow. Although the terms of the SPS short sale were for an all cash deal, the buyers decided to switch to conventional financing to take advantage of the low interest rates. This sudden change made Michael Gaddis feel a little uneasy because close of escrow was only 12 days away and a trustee sale was looming over the transaction. Michael Gaddis was not confident that SPS would extend the approval in order to accommodate the change in financial terms. The buyers agent assured Michael Gaddis that this change would not affect closing and true to her words, the transaction closed on Friday, November 30, 2012.
No short sale is without problems. Problems can arise due to a number of circumstances. The key to resolution is not to panic and to find a way to overcome the issues. Experience is key. Do not short sell your house without first obtaining an agent that you believe will truly be there for you throughout the process. Perform your due diligence and pick the right Realtor for your SPS Short Sale.
Jenny Winford July 23rd, 2017
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