Diary Of A Short Sale, A Happy Ending

A colleague of mine is doing a short sale. She started her journey on Friday (you can get a quick re-cap here of how Friday morning/afternoon went).She's the buyer. (A short sale is when the bank allows a troubled borrower to sell the home for less than the value of the loan. The lender gets all the money, but at least the owner doesn't go through foreclosure and can walk away clean.)

This experience has been a nightmare for my colleague so far, dealing with the bank and the owners.

The owners have been living in the house for almost a year without paying a dime: No mortgage payment, and yesterday my colleague found out they haven't paid utility bills for a year either.

Short sale home
Short sale home

Friday was the closing day, and I knew this would be interesting, so I've been doing my blog version of pseudo-Twittering it throughout the process with emails coming in from my colleague.

Below is the "Diary of a Short Sale" which started Friday morningaround 9 o'clock.

Friday continued.....

558pm - I email my realtor; ask her if the deal is history.

610pm - My realtor responds by writing that she has attempted to call the owner’s realtor and the owners title company. She is doing all she can, but it’s radio silence.

629pm – I email Ms. Olick to say we have done all that we can, but we have no clue how this will end up.

644pm – Diana emails… “I assume they never signed?”

659pm – I write “I would assume so but there has been no confirmation or denial. It is radio silence. All the players- aside from the seller – want it to go thru so they can all see a payday. I fear there is not one to be had. They say silence is golden, but not in this instance.

726pm – I email my realtor again. Anything cooking?

748pm – My fearless realtor reached out to our attorney to tell her what was going on, or should I say not going on.

815pm – My realtor sends me an email to call, but I am at a friends home eating dinner, don’t read the message till almost 9pm. She tells me the owners signed, that it is a done deal. They signed the documents shortly after 7pm . I simply don’t believe it, where’s the proof? She says the owner’s realtor was at the signing, the documents were faxed to our attorney, and they were fed ex’ed to the court. We can’t seem to get a copy of the HUD-1 tonight, but if they have signed and I am officially the owner, what are my liabilities. Clearly the tenants are still there, am I responsible? Should I change the locks, what should I do? My atty says to do nothing, and he will find out if there are documents at his office on Saturday morning.

Saturday -

9am – Speak to the Attny… Big surprise no documents were faxed to my title company. He advises me just to monitor the house, and do nothing else, that we will have to wait till Monday. Do I own the place or don’t I? Is this all a scam?

930am - My realtor drops off a key to the house.

Later - I try to ignore it all and go about my Saturday business, but I drive by the house several times and the trash is piled high, cars and trucks are still in the driveway. Am I the owner?

11am – I call the owner’s realtor and act as dumb as I can be. Just want an update, where are things? He says I own the house, congratulations! Really, me, I own the house, but, but, but we live in a world of paper and there’s no paper, no HUD-1. He says trust me (yeah the last thing I’ll do), I was there, they signed, but you know you agreed to the tenants staying the weekend. I say, nope, did not. I said I would talk to my atty about potential issues, never agreed to a thing. Clearly, I have no documentation of ownership, and I asked about the HUD-1, where is it? Can he reach out to his friends at the title company and get us a copy. Yeah, he’ll try and get back to me within an hour.

The realtor NEVER gets back to me, and I knew he wouldn’t because he is an expert at gaming the system--- knowing full well he bought the tenants the weekend until we could potentially grab documents on Monday morning.

1pm – My girlfriend says let’s just drop by the house on a friendly visit. Let’s check out what is going on and we will be as congenial as can be. I steel myself.

145pm – We arrive to find the “tenants” eating lunch. The former owner’s have cleared from the premises. The “tenants” are respectful and it seems knew to expect my visit. It looks like they are making attempts at packing, though one of the bedrooms is locked, another is still fully loaded. I feel less anxious knowing that these folks don’t seem to mean any harm and are apparently making a good faith effort to remove themselves.

I now have to rush to my son’s baseball game--- it goes into extra innings.

Early evening – get a call from my realtor saying the owner’s realtor got an angry call from the former owners saying the locks have been changed. I have done no such thing, but boy I wish I had. With no documentation I leave things be, though I do speak to a law enforcement friend and feel like I am doing the right thing.

Sunday -

830am – drive by, truck is gone, trash is gone. I breathe a sigh of relief, things are progressing. I don’t have to drag the police in.

10am – walk with my dogs along the path behind the house, walk around the block… it’s teaming with activity, another good sign that they will be out of the house by tonight.

1pm – With dogs, son, realtor and her husband we “visit” the house again. The tenants clearly know they are outta there, and the house seems to be in fine shape. I even pull up some carpet in the bedrooms only to discover lovely wood floors.

8pm – looks like they are out.

Monday –

9am – I get copies of the signed documents

930a – Locksmith arrives to change the keys.

I own another house, and I am overwhelmed….

Questions? Comments? RealtyCheck@cnbc.com