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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Sylvia B.

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

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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Thomas Enright
OP
Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
6y
@Christian Barth Oh that's good information. So did you do the streamlined one with less than $30k of work or the one that has more than $30k of work? I heard there's a pretty big difference.
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Mike Anderson
Rental Property Investor · Clayton, GA · Member since 2020 · 186 posts · 152 votes
6y
Originally posted by @Thomas Enright:
@Mike Anderson Whoa yeah I can't even imagine how inefficient that whole process would be. That's a good thing that it worked out though! Do you still have that property?

Still in it, it's been a bit of a slow roll as its our primary residence, the last big project master bath remodel kicks off next week. I got about 250k in equity in this thing now. I need to get that money out, but my wife wants to stay here for what seems like forever now! My dog is down to sell and move! We'll see how that plays out once this master bath is done!

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Aaron Gordy
Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
6y
@Thomas Enright Yes, have a good contractor willing to work with you. I acted as a gc on my deal. Be expecting a time lag as you are dealing with the government between the time that you call for the draw and then the inspection and then the reimbursement. You need to have a chunk of reserve to keep the construction going because its all about momentum and staying on task. On time and on budget are critical words within this realm. Timing during the construction phase is super important. Have reserve.
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Christian Barth
Real Estate Agent · Minneapolis, MN · Member since 2015 · 55 posts · 6 votes
6y
@Thomas Enright I did the streamlined 30k and it was the max for what i was approved for i got the house for 160 and was approved for 190 so the 30k was perfect even though it didnt cover all the rehab cost and still had to come out of pocket another 30k which i raised from a private money guy. So, i dont know a whole lot about going over 30k and this was 2 years ago and have probably forgot some things. Everything was pretty easy to deal with as far as the contractor went he had done them in the past, but everything with the bank was difficult. approval after approval was needed. I could go on for days. It was what i had to work with at the time and it is a good program and got me up and running. If i did it again there would be a few things i would change. I would have gotten a few different bids from different contractors. Stay on top of the bank/lender so things can get done in a timely fashion, but overall it was a pretty good experience and would recommend the program.

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Pat L.
Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
6y
Originally posted by @Thomas Enright:
@Pat L. Wow that 10 month one sounds like a nightmare. So why did he put a roof on it? Couldn't you have just ignored his request for more money since he did it on his own and you were already under contract?

We were NOT technically under contract. He refused to sign the offer(s) so it went back & forth until he gave up.
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Eric WilkinsonPro Member
Chelsea, MI · Member since 2019 · 50 posts · 52 votes
6y
@Thomas Enright. It is an off market deal where the seller has owned the property for 30 years. There were 2 liens from personal loans from his mother. The mother passed away years ago so there was no way for her to sign a lien release.
We had to get a mortgage release from his 5 surviving siblings. Since nothing is easy, he is apparently the black sheep of the family and was not on speaking terms. We had to track the siblings down and get a release signed from all of them. The release is all signed so we are just now waiting to get it to the title company.
I could have done a quiet title action. That would have taken as much or more time. The house is in roughly shape so I was worried about the money that I put into was going to be at risk since title insurance was only going to cover the acquisition price. A quiet title action would have also made it difficult for me to flip it if I chose to go that route. Currently planning to BRRRR it.
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Thomas Enright
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Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
6y
@Mike Anderson Haha yeah my dog is okay with the nomadic life too. She says she's up for anything if it means financial freedom earlier rather than later. Okay, that may actually just be me giving her my voice... Anyway, lol, that's a bunch of equity you're sitting on. Any possibility of just doing a cash-out re-fi to roll that money into something else?

@Mike Anderson
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Thomas Enright
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Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
6y
@Aaron Gordy okay thank you so much, that's good info!
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Thomas Enright
OP
Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
6y
@Christian Barth Okay awesome, thank you! It seems like mine will end up being over the $30k but I've definitely heard use a contractor that's done these before so he/she knows what they're getting into. I appreciate the input!
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Thomas Enright
OP
Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
6y
@Pat L.Ahhhhh that makes sense, way to go on getting all that handled though! Seems like he was quite the character to deal with.
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Thomas Enright
OP
Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
6y
@Eric Wilkinson Yeah that definitely has a bunch of moving parts. Why don't you just include the rehab costs on the HUD-1 as an expense paid outside of closing so that you can get the title insurance to cover that cost as well?
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Mike Anderson
Rental Property Investor · Clayton, GA · Member since 2020 · 186 posts · 152 votes
6y
Originally posted by @Thomas Enright:
@Mike Anderson Haha yeah my dog is okay with the nomadic life too. She says she's up for anything if it means financial freedom earlier rather than later. Okay, that may actually just be me giving her my voice... Anyway, lol, that's a bunch of equity you're sitting on. Any possibility of just doing a cash-out re-fi to roll that money into something else?

@Mike Anderson
I've thought about that, but then the monthly rate goes up, and i like to keep my expenses low, but it would help me scale quicker.

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Noah P BondsPro Member
Boise, ID · Member since 2019 · 59 posts · 36 votes
6y
I went 5 months on a bankruptcy/short sale. A lot of people involved and lots of red tape...
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Thomas Enright
OP
Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
6y
@Mike Anderson Yeah that's understandable, I'd rather have lower expenses and more personal cashflow as well. Just a personal preference.
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Scott WolfPro Member
Lender · Boca Raton, FL · Member since 2014 · 1k+ posts · 959 votes
6y
It wasn't me, as I was the broker in a commercial transaction, but hard contract for over 3 years.
Sold an old car dealership to a national retailer that took forever due to town permits and environmental issues. Nice sized check, but damn what a long time to wait!
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Jon C.
Real Estate Attorney & Investor · Greater NYC Area · Member since 2016 · 70 posts · 48 votes
6y
I represented a client buying an parking garage development site in Manhattan from a family where two brothers had built up a large property portfolio in the 1960's, 70's, 80's and 90's. When the two brothers died the properties were distributed in equal shares to the children of each brother, none of which had any real estate or general work experience. Flash forward to 2015 and you had eight or nine siblings and cousins who were all aged 50+, and had spent their entire lives living off the income of this portfolio (maybe one or two had actually pursued careers of their own) and had sued each other every time some segment of the family had contemplated selling a property.
It took over four years from the initial contract signing, and countless re-negotiations, but we finally closed. The location and pricing was worth all of the headaches in the end, but it was one of those deals no one involved will ever forget.
1 Reply
Aaron Gordy
Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
6y
@Jon C. That is nuts!! Thanks for sharing. That also shows you the power of buy and hold.
1 Reply
Jenning Y.
Investor · USA · Member since 2015 · 168 posts · 243 votes
6y
Originally posted by @Thomas Enright:
@Jenning Y. Talk about coast to coast! I just looked at your "Investor from Texas/Florida/California/Utah" and I feel like you should get a deal done on Washinton and New York so that you have the entire US encompassed lol.

Ooh, yea, as long as the numbers make sense :)
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Eric WilkinsonPro Member
Chelsea, MI · Member since 2019 · 50 posts · 52 votes
6y
@Thomas Enright
I will have to try that the next time (hopefully there never is next time).
I reviewed this all with the title company and their lawyer and they would not insure more than the purchase, but perhaps I did not ask it the right way.
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Twana RasoulBusiness Member
Real Estate Agent · San Diego, CA · Member since 2017 · 1k+ posts · 1k+ votes
6y
@Thomas Enright about 12 months on a short sale until bank gave approval.
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Jay C.
Walnut Creek, CA · Member since 2018 · 40 posts · 29 votes
6y
3 months but by choice to time the rental market prime time.
1 Reply
Jonathan Soto
Lender · Newark, NJ · Member since 2016 · 695 posts · 252 votes
6y
@Thomas Enright 9 months. Oil tank problems
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Thomas Enright
OP
Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
6y
@Noah P Bonds yeah that's a long time too. What did you end up doing with that property?
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Thomas Enright
OP
Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
6y
@Scott Wolf Wow yeah that's a long time for a hard contract. Were you on the listing side of that then?
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Thomas Enright
OP
Investor · Silver Spring, MD · Member since 2020 · 127 posts · 58 votes
6y
@Jon C. that sounds incredibly complex. I can't imagine being a part of that and going through all of those hoops. I'm sure you learned a ton and built all kinds of relationships. So was all of that chaos for just one of the properties or the entire portfolio?
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