This was a little sad for me because the house wasn’t even completely finished and the couple was calling it quits. It was about 90% complete but the construction costs and mortgage had the folks underwater as the market turned.
They had both moved out and set up their own separate residences, so showings and availability were not an issue. I spoke with each party separately, and by and large they didn’t allow their personal differences to cloud the sale efforts. The real challenge here was that this was a 90% finished home in a very down market with lots of competition. When banks evaluate approving short sales they look at two things: the hardship of the seller, and the market value of the home. In a falling market, the danger of a home over appraising is real because the look back at comparable sales is when the market was stronger.
The contracted price was almost $90,000 under our original asking price, and I was concerned that their lender might want more money. An appraisal was not conducted, but the lender did send an agent to execute a BPO (broker price opinion) which isn’t a full appraisal but does look at the same market activity. I met up with this agent and was sure to point out the unfinished work and how that had affected the buyer’s offer.
Fortunately, the lender approved the short sale and after 10 months from start to finish the sellers were closed and free to move on with their lives. They were young, and, being just a little over 40 at the time this closed myself, that’s pretty young! So, I am sure they made the most of moving on with their new lives.
