All Forum Posts by: Sam Leon

In the last several short sale I was involved in, the commissions and other items were very clearly delineated in the contracts. In fact, the seller had their attorney drafted some boiler plate languages that they insisted buyers added to the contracts as pre-conditions. For example:

Commissions to be paid by lender, if lender refuses then buyer pick up the difference. Seller is to pay ZERO towards the closing.

Seller's obligation to close contingent upon lender accepting proceeds of the sale as final and full payment satisfaction of note and mortgage deed indebtedness with no further recourse of deficiency judgement against seller.

The lender is going want a net when they approve. I had one case where the contract took over six months to approve and the original contract had calculated property tax prorating between buyer and seller based on a 3 month window. I had to eat that in order to make the deal work.

Joel Owens thanks for the explanations. So someone set a wrong flag somewhere for it to pop up on Zillow as "active & available".

Steve Babiak, I haven't seen this property do don't know if I want it or not I was more curious why it was listed with no price seemed it was not really ready but in a staging area. I have seen this once before with another property.

Another thing that's really annoying about FNMA. When they counter you the first time, they sent back a whole bunch of REO addendums for me to fill out and sign, which basically nullifies every item in the FAR/BAR contract. What I didn't know, was that day was the "Acknowledgement Date", which was what all the subsequent events measured from.

So while I was still back and forth with them on prices, closing dates etc, the clock was ticking on the acknowledgement date, which I assumed (incorrectly) was the same as the "Effective Date". So once all the terms were agreed upon, and both parties signed, it was day 7 from their initial counter date - acknowledgement date. On their form I had 10 days from AD to perform inspection and cancel contractor. I read the REO addendum again and noticed the term, called my agent, who told me AD is same as ED...called my attorney, said same thing, don't worry AD is another term for ED. I pressed my agent to call listing agent, who had to go check with listing broker and came back to tell us, AD was 7 days ago, you have 3 days to inspect and decide.

Sent us on a big rush to hire the inspection, and it was a long weekend too.

I thought it was totally unreasonable to start the clock on the first time my offer was countered.

What does this mean?

For example, on Zillow, it shows this property was listed by bank on 12/21/2012 - but there is no price.

http://www.zillow.com/homedetails/723-W-Las-Olas-Blvd-Fort-Lauderdale-FL-33312/43203838_zpid/

However, if you press the "View Complete Details" button, it takes you to Wells Fargo where it listed an agent, but the status is "Coming Soon" and price TBD.

http://reo.wellsfargo.com/WBREODetails.aspx?INTCID=REO394324&page=Home&showreohome=true&dm=DMIZIREOL1

So, is this property for sale, or not?

If you go to http://reo.wellsfargo.com and do a search for properties in this city, this item won't come up.

Wayne, the way FNMA operates doesn't make sense. I wonder if it's more the individual asset manager or whether it's some sort of policy guiding them? Do the AM have much latitude in deciding?

I was asking them to either discount 10K (for mold remediation only, not for the repairs), or to handle the remediation themselves. That's all. Even the listing agent when I told them about the test results said "Oh we can't sell properties with black mold..." then they called my agent and said "NOPE, FNMA said they will do nothing, take it or leave it."

Oh and I was buying a townhouse in a development, where similar properties are all over, and at the time most recent sale for the same house on same street was 145K and 132K. It was the most frustrating experience, and throughout the whole process they changed AM on it three times.

I just saw this thread.

I am not sure how much advantage ALL CASH has. I buy properties to hold and rent, and typically do it all cash, and will refinance after taking possession.

So far the all cash hasn't really been that beneficial from what I can tell. Last 8 REO offers went no where.

Right now I have bids on two REO properties and after submitting initial bids and they asked for best and highest, resubmitted bids and gave 48 hours of offer acceptance deadline and both expired without any response. My offers are usually CASH, AS IS, INSPECTION CLAUSE, 10% EMD rounded to nearest 1K.

How much advantage will it give me if I waive the inspection? I am not sure. I could spend $500 to do an inspection prior to the offer, if needed.

Someone mentioned FNMA doing necessary repairs. I also found that to be very subjective. I actually had a deal on a FNMA property last year. Listed at 180K, after a series of back and forth we reached a deal at 160K. The title agent they assigned is an idiot and would not respond to my attorney's repeat request to examine the title and lien search work, then 1 day, yes 1 day before closing they said they had a title defect, some typo in the legal description discovered during a survey which I paid for, prevented them from selling. They had to contact previous owners to have them sign something, or they have to reforeclose the house. That's after I spent $500 on an inspection, $200 on a termite/pest inspection, $350 on a survey, $300+ for HOA document fees and application fee...I was pissed off. They cancelled the contract. Listing agent promised to give me first shot when it's relisted.

Six months gone by and one day I noticed the property's back on market for a week. No one told me. I called my agent to follow up, yup they have gotten the previous owner to sign some affidavit and it's all set. I sent in the same offer, with an additional contingency - I need to walk the property once more, to assess if a reinspection is needed. They accepted.

I walked into the property, WOW, musky smell, and no electric. Touched one side if the wall and it's wet. Went outside and looked and an outside light fixture had fallen off the wall socket, rainy season in south Florida has done it's damages, water gotten inside that wall, and caused the sheet rock on the inside to swell and warp. I told them I need an inspection. Got a pest control company out and did a mold test. Came back with black mold at a VERY HIGH ppm density. The mold company quoted me 10K to do the mold remediation which only include the treatment, but not the repair of the damages. That wall has the kitchen counter and cabinets against it, and it's a complicated one to repair.

I showed the bank the 10K quote I got for the mold remediation. Plus it's their fault for letting the electric service to run out, and the entire summer rainy season water has been penetrating inside and no air conditioning. I said either reduce price by 10K or have the mold remediation completed before my purchase.

FNMA says the deal was 160K, mold or no mold, take it or leave it. They will not reduce 1 penny, or treat the mold.

I walked.

I kept hearing people saying when in a REO situation, if the bank came back with a "HIGHEST AND BEST OFFER IN 24 HOURS", presumably in a multiple offer situation...that you could offer them $1 or $100 or $500 OVER the highest offer - provided that they can show you that there is a genuine offer for that amount.

Not to mention you are at the mercy of a crazy buyer who is willing to overpay...unless you have a built in contingency that gives you an out.

I assume if you are willing to do that, you are really calling them bluff. If so, then don't increase your offer, leave it.

But let's say you are willing to pay $100 over the highest, would you really write that into the contract? How would you word it?

OK is this just talk?

In all of the short sale or REO offers I have made they always requested proof of funds.

I typically just include a statement from whichever account I have the funds for that particular property.

If it's a 100K property then I give them a checking account statement with 160K balance.

If it's a 400K property then I give them a stock account with a 700K balance.

I don't worry about the amount having to be close to the offer. I doubt it makes a difference.

I am having a real hard time dealing with a tenant.

I hired a RE agent to rent out my SFH, paid one month rent to advertise and find the tenant. I didn't want to initially but negotiated the rent down from $1800 to $1700 a month after tenant agreed to shoulder the cost of irrigation of the lawn. Written into the lease is tenant will pay for sprinkler irrigation once a week.

Soon after the tenant complained that the water bill is too high. Due to my calculations he is paying an extra $60 a month for the irrigation the most, and being in South Florida there is hardly a need for watering in the summer. I set the sprinkler to water once a week, 4 zones, 15 minutes each. He complained it's more than he was willing to pay. I also pay $80 a month for lawn maintenance. I then found out when I went to pick up mail he had the sprinkler turned off now for over a month, grass is dry and made a cracking noise when I walked on them. Lawn is half brown. New plants I put in back in October all wilted due to lack of water. Broken window for over 2 months that he hasn't repaired. He broke it and I gave him the benefit of the doubt that he would fix it, he hasn't. Overall there isn't any courtesy or mutual respect I expect.

What is the ramifications if I suggest to just terminate the lease?

Assuming he agrees do we just mutually sign a termination agreement, and I deduct damages from his security deposits and that's it?

On the RE agent side, the agreement says if he renew a lease next year, I will owe again 1 month rent. What if the lease is terminated early? Do I get anything back, or will the agent find me another tenant?

Tenant broke one of the windows - October 2012.

One of those tricky bay windows that sticks out with glass on top, bottom, sides and front. The top portion broke, old old window the glass not tempered, split into multiple pieces and some fell down.

Told tenant to have it repaired. Tenant said yes, soon.

Now we are in February, still not fixed. In fact the broken glasses still have sharp "teeth" protruding to the middle. If a cat or something tries to crawl through it will be cut badly.

How to handle? Give an ultimatum to repair by a date and if not done, hire your own window repair crew and bill the tenant? I am guessing it may not be possible to fix just the top panel, may have to redo all the glasses.