Short Sale Tales in the San Francisco Bay Area
There is no shortage of Short Sale Tales, mostly bad, some good - but this one just made me laugh. Kathleen Daniels in San Jose has written about a fair number of closings, or almost closings! This is a story, not about the closing, but the process with Bank of America.
Here's the background. We've got a great short sale listing in Marin County. An agent in San Francisco brought us a solid offer, all cash. A nice young couple. The process of entering the sale documents in BofA's Equator system was begun. An updated 'proof of funds' letter shows that Mom was providing the 'all cash'. Her advisors decided she should be on title too - to reap the benefits of her donation. So an addendum was added to add Mom to the transaction.
Problem is, the Equator system only has room for two buyer names, and those are already filled. The proof of funds name now doesn't match the initial buyer names. So the system has rejected the supporting documents.
Following is an email to the selling agent explaining the dilemma: (Names are all changed to protect the innocent)
We've run in to a problem in the Equator system. In the initial stages of getting everything entered in the system it is quite automatic and doesn't accept human intervention well. There is only space to enter TWO buyer names.
The addendum adding Mom has been made part of the purchase agreement but the automatic eyes of the system don't see it. This would be OK because we have been assured that eventually Mom will be approved by humans. But we can't change one of the names to Mom right now - it's already in 'the system'.
The problem is that the PROOF OF FUNDS does not include either (of the young couple's) names (who are the current TWO Buyers noted in the system). So the system is rejecting it.
As we see it there are two options.
1. Write a new purchase agreement with all three names in it, but use Mom as the initial name in the system. And get them to cancel the current transaction. We will just have to re-upload all documentation again. But the name of the buyer in the system will match the Proof of Funds.
2. Somehow have a Proof of Funds that includes at least one of the young couple's names.
Your thoughts? Please let us know....
Want to know what happened? Read on....
It was decided out here in the real world to cancel the initial contract and write a new one with all three names. Then that would be submitted. Problem is, the Equator system has to ask you to do this. And it was happy with what it already had! To make a long story short, the Seller had to call Bank of America and request them to cancel the sale. Once that was done, we could re-enter the 'new' sale in the Equator system, and now we're finally moving forward again. We probably won't get any more 'human' intervention until a 'Negotiator' is assigned.
John M Scott, Broker / Owner, Scott Keys Properties, Certified Distressed Property Expert (CDPE), Council of Real Estate Brokerage Managers (CRB), serving San Francisco and the surrounding San Francisco Bay Area