I just closed escrow on a short sale where I represented the seller. The first lien holder (lender), approved the short sale, provided that the they were in “…receipt of funds no later than June 25, 2010.”
As luck would have it, the new buyer’s loan did not fund until the afternoon of the 25th. This posed a problem, as the title company could record and close escrow by the deadline, but they would miss the afternoon wire cutoff, and the lender would not receive their funds until the following Monday. Title, therefore, would not record and close escrow without something in writing from the lender expressing their approval to receive funds after the 25th.
When I explained title’s concern to the lender’s short sale negotiator, she said that what we were requesting was an extension, and any extension request must be submitted to the audit department, approved by the investor, and would require daily penalties to be paid by the buyer. This was looking like it would drag on well into the next week.
Further complicating the matter was the lender’s refusal to communicate directly with escrow or title, as they were not an approved third party to the agreement, and so they were not authorized to discuss the transaction with anyone other than the seller, and me, the listing agent. So, I would have to be available to receive and distribute any communications between all parties. Mind you, I was preparing to leave on a vacation Sunday.
Frustrated, I reminded the negotiator that we weren’t actually extending, and in fact wanted to close that afternoon. We put our heads together and she said, “How about an email from me that says we’ll just accept the funds on the 28th?”
“Done,” I answered. So, with that email in hand, I called the title officer who then informed me that would suffice. We recorded to meet the lender’s deadline for closing, and they received funds three days later on Monday.
The moral of the story?
- Keep it simple–no formal request or letter, “just email me”
- Have Seller authorize escrow and title officers as 3rd parties with short sale lender
- Have a listing agent who is hands on and technologically savvy.