Short Sale Approval

We got lender approval a couple of days ago on a short sale. It is one of my favorite clients - but not one of my favorite stories.

I met the seller, Richard, almost five years ago. I was waiting on his neighbor - my client - to come out of her house so we could go look at houses. (I'd recently listed her house and her buyer found us during open house. I love it when that happens. So we were ready to go out looking for what she was going to buy next.)

Anyway, while I was waiting on her, Richard came out of his house, introduced himself and asked me to come take a look at his place, said that he'd want me to sell it for him one of these days. Beautiful property - huge lot, dozens of trees, pool, Arizona room, updated kitchen, very well cared for - great for entertaining. And pretty. Great curb appeal.

He was as good as his word. Some months later Richard called, asked me to show his wife and him properties, that his wife was ready to move. We looked, found something, made an offer, got it accepted - and cancelled after home inspection revealed issues. So much for that.

More months passed. Another phone call. Richard's wife had died and he wanted to put his place on the market. His plan at that time was to move to Florida and live with one of his children who was building a big home. I listed the property, held several open houses - and we did not get offers. The market was declining every day - and while the property was still being cared for, it was priced too high to attract a buyer.

Rather than reduce the price, Richard found his own buyer - a friend - and I prepared a lease-purchase contact. The friend would rent the property to a family member, and at the end of four years, the amount paid for rent each month would apply to the down payment and she'd pay it off.

The contract was legal, but it was risky in the market that we found ourselves in. As the buyer got close to the end of contract term, the value of the property was about $100,000 less than she'd agreed to pay for it, her business was hurting, and she could not live up to the agreement. She and Richard shook hands, the tenant moved out, and gave back the keys to Richard along with the house, leaking pool, dried up lawn and dead fruit trees.

In the meantime, Richard had moved on with his life, purchased another property for cash - and was left with a no-longer-beautiful property that he couldn't pay for. He couldn't rent it because he was out of money and couldn't afford to repair the pool or address the rest of the maintenance issues remaining after buyer/tenant walked out.

So, I listed the property again, this time at a price reflecting the current market. We got a buyer within days - and a long line of prospective buyers in case the first one changed his mind. The sales price is very very low - it will take the buyer a little effort to do the repairs needed. But the basic beauty is still there.

Since lender approval a couple of days ago, we're in the 10-day inspection period. If all goes well, we should close by the middle of September. Richard's credit takes a hit, but at his age that's less important to him than closing this chapter of his life.