Saga of Successful HSBC Short Sale
with a Bankruptcy Attached
In Columbia SC
CLOSED!!! That is the words everybody in a real estate transaction is waiting for. Well some transactions come much easier and without any hiccups; while others are not as easy.
In a short sale you go with the draw. I listed a Columbia SC property on 07/01/2012 after the listing interview I discover it is a divorce, short sale with HSBC Mortgage and it was attached to a bankruptcy. Right out of the gate 3 strikes; I knew it would not be easy but I can do this. I have successfully closed several short sales already.
I advise the sellers that the bankruptcy could be a problem with a HSBC short sale and it would be best to get the house released from the bankruptcy before HSBC can approve a short sale.
The Columbia SC property is listed; 1 week no offers, no looks. The price is reduced. This continues for a couple of weeks.
The owners advise that the house has been released from the bankruptcy. I breath a sigh of relief; 1 strike removed. It is finally priced right we are getting showings and we receive multiple offers.
The short sale package is submitted to HSBC mortgage 08/14/2012, after all documents are collected the HSBC orders a BPO. The HSBC counters $30,000 over the offer price, which is $25,000 over the list price. I am flawed, I tell the selling agent and his response is "What are they smoking" I have to laugh, because we both know the BPO is over valued. I tell him that we will dispute the BPO but I need to know what his clients are willing to offer. The buyers best and final offer is an increase of their offer price by $5,000 which is the list price. The new offer along with comps and an estimate of repairs of the property is submitted to HSBC. HSBC counters back with a decrease of only $5,000 of their original 1st counter. That is still $25,000 over the offer price and $20,000 offer the list price. I can't believe it I tell the listing agent and of course he is shocked and says "It will not appraise" I feel the same
His clients want the house but they do not want to pay that price. They are upset that the counter is over the list price and feel that I as the Columbia listing agent have done something wrong. I explain to the selling agent that HSBC want to clear as much of the debt as they can. Based on their BPO the house is worth more.
I have multiple offers so I extend the offer to the other buyers in waiting. One of the backup's increases their offer by $18,000 and HSBC accepts the offer. We have a deal!
Finally a HSBC short sale approval! The Short sale needs to be completed by 12/22/2012. The buyers loan is approved! and we can close 12/15/2012. Here comes the 1st hiccup buyers appriasail comes back $12,000 less than contract price, with improvements. The original problem I knew we would have to face. Back to the HSBC negotiator I go, I send a copy of the appraisal and they counter back to appraised value, advising that they want the full appraised value. the buyers counter $5,000 under appraised value due to the repairs needed; which are also requirement of the lender and the appraiser. Back to the HSBC negotiator. I advise the appraised value is contingent upon the repairs being completed, and since the house is being sold "As-Is" the buyers have to pay for repairs before closing. They agree finally and a 2nd HSBC Short sale approval! The short sale needs to be completed by 01/31/2013
The buyers loan is ready to close, scheduled for 01/28/2013. Here comes hiccup number 2; a bankruptcy is attached. I am lost we cleared this up months ago, the seller advised that the bankruptcy attorney will have to file a motion to release the home from the bankruptcy and this motion could take 30 days. What happen I thought this was cleared? Nope the seller has filed another bankruptcy after the HSBC short sale was approved and they included the house again. Back to the negotiator, I receive a 3rd HSBC short sale approval! the short sale needs to be completed by 02/28/2013
Tick,Tick,Tick, we wait judge signs the order 02/22/2013 we receive the order 02/27/2013. HSBC is notified that we are ready for the closing package. Here comes comes hiccup number 3; buyers loan has to go back through underwriting; the package will be ready in 7 days, back to the negotiator. 4th HSBC Short sale approval! the short sale need to be completed by 03/07/2013
Great News! everyone is ready we CLOSE!! on 03/05/2013, buyers get a wonderful house, for the listed price, sellers receive $2,500 in incentives and everyone walks away smiling.
Successful HSBC Short sale negotiated in Columbia SC!