What's the LONGEST you've ever been under contract for???

What's the LONGEST you've ever been under contract for???

Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes

After 8 months and 7 days of waiting for bank approval on a short sale... I'm still waiting. COVID has CERTAINLY not helped but unfortunately, I feel like this is going to make it to the one year mark.

This got me thinking though... What's the longest that any of you have ever been under contract on a property?

LET'S HEAR THOSE SOB STORIES! (Especially if they closed successfully)

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Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
6y

We do cash deals, so we normally close in 1 to 2 weeks. One deal took considerably longer due to title issues.

We bought a house at auction (not tax or foreclosure, just a regular auction) and assumed it would be smooth sailing, but no. The land was originally part of a large tract of land (the whole block) owned by a prominent family. In 1964 a portion was donated to the Methodist church, and a house was built for a parsonage. It had never changed hands since.

A few days after our purchase the lady who does our title work stopped in to see us, "There's a problem..."

The property description was wrong. Not only wrong, it made no sense. The original sellers were all deceased, so it couldn't just be corrected. A few years ago their estate sold the rest of the original tract, and the legal description for that sale reads, Beginning at the Southwest corner of [blah, blah, blah] except [parcel deeded to church].

A survey was done, and besides the completely nonsensical property description, in the original plat of that neighborhood, which was never officially changed, the city had planned a street right through the garage. So the title company requested that the city vacate their claim to that strip of land, which they were willing to do, but the man who needed to sign the papers was on vacation, so there was a delay.

Multiple corrected deeds needed to be signed, and several of the people who needed to sign were out of state - more delays. There were questions about the marital state of some of the people who needed to sign. More delays. One of the local signers has a rather mercurial temperament. First she is quite agreeable, then can't be bothered, then contacts the title agent and wants to know why it all hasn't been finished yet. It's difficult to schedule meetings with someone like that, so more delays.

After more than 3 months, it finally closed. Success.

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  • Property Manager · Member since 2018 · 174 posts · 185 votes
    6y

    Wow you are a trooper for sticking it out!! In real estate I have dealt with several long short sale transactions, but unfortunately not as long as 8 months. I wish you the best of luck!

  • Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
    6y
    Originally posted by @Jenni Ellis:

    Wow you are a trooper for sticking it out!! In real estate I have dealt with several long short sale transactions, but unfortunately not as long as 8 months. I wish you the best of luck!

    Haha thanks! Yeah, I don't think I would've waited this long if it wasn't such an awesome deal. I'm not in a rush and should be able to easily add almost $100k of equity and BRRRR out of it with ease.

  • Property Manager · Member since 2018 · 174 posts · 185 votes
    6y
    Originally posted by @Thomas Enright:
    Originally posted by @Jenni Ellis:

    Wow you are a trooper for sticking it out!! In real estate I have dealt with several long short sale transactions, but unfortunately not as long as 8 months. I wish you the best of luck!

    Haha thanks! Yeah, I don't think I would've waited this long if it wasn't such an awesome deal. I'm not in a rush and should be able to easily add almost $100k of equity and BRRRR out of it with ease.

    Then it is definitely worth the wait! Will you self manage, or hire a property manager?  

  • Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    We do cash deals, so we normally close in 1 to 2 weeks. One deal took considerably longer due to title issues.

    We bought a house at auction (not tax or foreclosure, just a regular auction) and assumed it would be smooth sailing, but no. The land was originally part of a large tract of land (the whole block) owned by a prominent family. In 1964 a portion was donated to the Methodist church, and a house was built for a parsonage. It had never changed hands since.

    A few days after our purchase the lady who does our title work stopped in to see us, "There's a problem..."

    The property description was wrong. Not only wrong, it made no sense. The original sellers were all deceased, so it couldn't just be corrected. A few years ago their estate sold the rest of the original tract, and the legal description for that sale reads, Beginning at the Southwest corner of [blah, blah, blah] except [parcel deeded to church].

    A survey was done, and besides the completely nonsensical property description, in the original plat of that neighborhood, which was never officially changed, the city had planned a street right through the garage. So the title company requested that the city vacate their claim to that strip of land, which they were willing to do, but the man who needed to sign the papers was on vacation, so there was a delay.

    Multiple corrected deeds needed to be signed, and several of the people who needed to sign were out of state - more delays. There were questions about the marital state of some of the people who needed to sign. More delays. One of the local signers has a rather mercurial temperament. First she is quite agreeable, then can't be bothered, then contacts the title agent and wants to know why it all hasn't been finished yet. It's difficult to schedule meetings with someone like that, so more delays.

    After more than 3 months, it finally closed. Success.

  • Rental Property Investor · NJ and PA · Member since 2019 · 206 posts · 105 votes
    6y

    This is NOT a sob story... My first real estate purchase (our first owned residence) took about 6-8 months. It was 25 years ago, so I don't remember the timing exactly. But the sellers had a problem with their bank at the time of closing, and they were negotiating to avoid bankruptcy. They were not able to close on the scheduled date, and because we said we had to be out of our current residence and were all packed to move, they signed an agreement allowing us to occupy the property until closing. We all assumed it would be days, or weeks at the most. It was many months! We were young and poor, and terrified of this major financial commitment, so we were incredibly lucky to live rent free for all those months before we had a mortgage to pay!

    BTW, we didn't actually HAVE to be out of where we were. We were with my in-laws, so we really just WANTED really badly to be out. :-) 

  • Member since 2020 · 12 posts · 13 votes
    6y

    @Gary Parilis

    New construction can see similar timeframes and it would be normal. I guess it all depends on if it’s worth the wait (which seems like it is in this case smile).

  • Skip DellPro Member
    Investor · Vineland, NJ · Member since 2016 · 69 posts · 19 votes
    6y

    @Thomas Enright ..They accepted an offer on a triplexe, short sale.. it was the beginning of November and I finally closed the end of June.. very aggravating definitely worth the wait...lol

  • USA · Member since 2017 · 19 posts · 10 votes
    6y

    11 months. Granted the contract changed several times during that period, but 11 months from initial contract acceptance to closing. Considering we bought for 75k and after about 30k in improvements it appraises for 190k it was well worth it.

    Infuriating though, I feel for ya.

  • Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    11 months - It was a HUD 223(f) loan assumption on a 50-unit apartment.

    HUD loans are great, HUD, not so much.

  • Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    waiting for bank approval on a short sale

    Hey, that's short sales.  You even know who the "right" person is at the lender?

    That's why the listing agent is usually useless.

  • Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
    6y
    Originally posted by @Sylvia B.:

    We do cash deals, so we normally close in 1 to 2 weeks. One deal took considerably longer due to title issues.

    We bought a house at auction (not tax or foreclosure, just a regular auction) and assumed it would be smooth sailing, but no. The land was originally part of a large tract of land (the whole block) owned by a prominent family. In 1964 a portion was donated to the Methodist church, and a house was built for a parsonage. It had never changed hands since.

    A few days after our purchase the lady who does our title work stopped in to see us, "There's a problem..."

    The property description was wrong. Not only wrong, it made no sense. The original sellers were all deceased, so it couldn't just be corrected. A few years ago their estate sold the rest of the original tract, and the legal description for that sale reads, Beginning at the Southwest corner of [blah, blah, blah] except [parcel deeded to church].

    A survey was done, and besides the completely nonsensical property description, in the original plat of that neighborhood, which was never officially changed, the city had planned a street right through the garage. So the title company requested that the city vacate their claim to that strip of land, which they were willing to do, but the man who needed to sign the papers was on vacation, so there was a delay.

    Multiple corrected deeds needed to be signed, and several of the people who needed to sign were out of state - more delays. There were questions about the marital state of some of the people who needed to sign. More delays. One of the local signers has a rather mercurial temperament. First she is quite agreeable, then can't be bothered, then contacts the title agent and wants to know why it all hasn't been finished yet. It's difficult to schedule meetings with someone like that, so more delays.

    After more than 3 months, it finally closed. Success.

    @Sylvia B. that seems like quite the learning experience! Way to go on getting that thing closed!

  • Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
    6y

    @Sylvia B. So did they end up creating a new plat description based off the exclusion from the other one then? That definitely seems like a mess!

  • Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
    6y

    @Gary Parilis Ha! That's awesome that you got to stay rent-free. Did they ever ask for rent after it had been going for so long?

  • Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
    6y

    @Skip Dell Ha yeah this one should definitely end up being worth the wait as well. Was there anything other than time that helped you get the final approval?

  • Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
    6y

    @Amber G. Wow yeah that's a killer deal and you almost made it to an entire year with the contract! What were some of the changes that made it take so long to close??

  • Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
    6y

    @Steve Morris, haha I've heard that about HUD. Was a HUD loan assumption less complicated than just getting a new HUD loan? And was there a big prepayment penalty or something? If you could go back to that transaction, what would you have done differently? Thanks for your input!

  • Rental Property Investor · NJ and PA · Member since 2019 · 206 posts · 105 votes
    6y
    Originally posted by @Thomas Enright:

    @Gary Parilis Ha! That's awesome that you got to stay rent-free. Did they ever ask for rent after it had been going for so long?

    Nope, and they had no right to.

  • USA · Member since 2017 · 19 posts · 10 votes
    6y
    Originally posted by @Thomas Enright:

    @Amber G. Wow yeah that's a killer deal and you almost made it to an entire year with the contract! What were some of the changes that made it take so long to close??

    Started out as a traditional sale, turned out seller had way more liens than they seemed to know about so had to get it approved as a short-sale. Then seller decided to hold out for cash-for-keys from the bank and we got it as a foreclosure. Kind of a wild ride for sure. 

  • Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
    6y

    "Was a HUD loan assumption less complicated than just getting a new HUD loan? And was there a big prepayment penalty or something? If you could go back to that transaction, what would you have done differently?"

    Am NOT a mortgage broker, but I think assumption or origination is about the same time. The servicer (you'd recognize the name) was done in a month. However to assume it took 91 forms (which still got done in a month) and then waiting about 10 months for HUD to say something even with calls to the asset mgr at HUD.

    Origination is about $50K and buncha lawyer time - However, I guess the rate is now 2.5% + 0.35% MIP. Fully amortizing over 35 years. However, they'll expect bigger reserves and you'll have to get approval from HUD to get a release on those reserves. Forgot, prepay is a 10 year step down 10-9-8-7 . . . so, yeah big prepay.

  • Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes
    6y

    @Thomas Enright

    One year, short sale back in the day as a precursor to the 08 crash though no one knew that then. Banks didn’t know what to do.

    Was our primary residence with a rental in-law. Moving into that was our backup plan if things went south.

    Huge boost really. Bought for 350 on 5% down, sold years later for 650k. Finances a lot of other projects.

    Another one of 9 months. 145. Small condo. Doubled in value in one year after we closed. Bank had mislisted as a 1 bed in a declining market when it was a 2 bed in an appreciating market.

    Ah....

  • Rental Property Investor · Douglas County, MO · Member since 2014 · 1k+ posts · 1k+ votes
    6y
    Originally posted by @Thomas Enright:

    @Sylvia B. So did they end up creating a new plat description based off the exclusion from the other one then? That definitely seems like a mess!

    The church we bought it from had a survey done, and the surveyor created a new legal description for the land we bought. Then the heirs of the original owner signed deeds with the correct legal description to the church and to the people who bought the rest of the property. Then there was a quit claim deed from the neighbors (multiple owners) to the church, and finally, a deed from the church to us.

    A mess, yes, but all we had to do was wait. The lesson to be learned is be sure to use a very good title company.

  • Real Estate Agent · Detroit, MI · Member since 2016 · 82 posts · 52 votes
    6y

    @Thomas Enright over a year on a short sale acquisition. Unfortunately it didn’t close.

  • Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
    6y

    @Amber G. Haha yeah that definitely sounds like a wild ride. I don't even know what kind of a sale I'd classify that under. Traditional? Short sale? Probably just forclosure since that was the last one. Did the sellers end up getting cash for keys like they had hoped? I kind of hope not...

  • Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
    6y

    @Steve Morris hmmm thanks for that information. Seems like HUD is one of those love/hate sort of organizations. The next building I buy will be a midsize apartment building so your information about that will definitely be pretty helpful. Can I ask how you found that property? Thank you

  • USA · Member since 2017 · 19 posts · 10 votes
    6y
    Originally posted by @Thomas Enright:

    @Amber G. Haha yeah that definitely sounds like a wild ride. I don't even know what kind of a sale I'd classify that under. Traditional? Short sale? Probably just forclosure since that was the last one. Did the sellers end up getting cash for keys like they had hoped? I kind of hope not...

     Yep, seller got 5k from Bank of America AND 400k in equity loans paid off with the sale. I’m still actually kind of impressed. Seller/foreclosuree(?) was in her late 70s so didn’t give a hoot about her credit score. We even got a little run-around at the local lumber yard during our remodel as she never paid them for the metal siding on our garage. Our town has a population of less than 3k so she was somewhat “well known”... for swindling.

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