House #28: The Full House

December 2, 2011 · 2 comments

It’s been a long time in works, but we finally have House #28 under contract. It’s a short sale in the same neighborhood as The Lake House, The Leak House, The Trifecta House and The Fourfecta House, and because it’s scheduled to go to foreclosure auction next Tuesday, we literally need to start the closing process and close the deal in the next three days…

We first offered on this property back in the beginning of October, and have been waiting for both the first and second mortgage holders to approve the deal. The first mortgage holder did so quickly, but the second mortgage holder kept demanding more and more money out of the deal. Ultimately, the seller was able to come up with some cash to satisfy the second mortgage holder, and the deal was approved last night.

The first mortgage holder said that we needed to close today, apparently not understanding that we needed time to pull title. They finally agreed to extend the closing to early Monday afternoon, and our awesome closing attorneys agreed to work their butts off to make it happen.

The final detail was that I had a private lender set up to fund this deal, and we had spent the last couple weeks hammering out terms and a contract. Then, late last night, he calls me and asks for me to pay about triple what we had discussed, claiming that he didn’t understand the terms of the deal (we had discussed x% interest rate and he said he thought that mean x number of points — nearly tripling the cost of the deal for me).

Personally, I think he was just looking to renegotiate and get more money of the deal at the last minute, but I’d rather just pay cash for the property than to have to deal with someone so unethical (a good lesson about why contracts should be solidified sooner rather than later). I’ll have a lot more to say about the whole situation in a future post.

Anyway, we’re scheduled to close Monday morning, the rehab should be quick and painless, and we expect to have this one back on the market as soon as we return from vacation before the new year. I’ll post pictures and my rehab budget in an upcoming post.

2 responses to “House #28: The Full House”

  1. Stephanie says:

    I thought that if a short sale gets approved, the lender will not proceed with foreclosure?

  2. J Scott says:

    Hi Stephanie – Generally, the lender will put a time limit on the short sale agreement (holding off foreclosure for several months while the seller tries to short sale). If the seller can’t sell within that time period, it will still go to auction.

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