Death of a Short Sale by attorney

Foreclosures, Short Sales, Tax Foreclosures
1

Guys,

Here’s a current deal that’s been driving me nuts thanks to an incompetent, paranoid attorney. Maybe after reading it you can avoid my mistake of not thoroughly interviewing the attorney before you agree to work with him.

I have a short sale right now, approved and ready to close. After the first closing, it was supposed to be resold a few days later in a separate transaction. A very simple concept for anyone with half a brain in this business.

So I was referred to a title company and an attorney who said they’d be able to handle it. I’ve worked on this deal for about a year now and it’s FINALLY going to pay off, or so I thought…

This attorney, let’s call him Tom, would represent the buyer. Tom recently heard some news about a seller sue’ng all the parties involved in a lease-back transaction that went bad. So now Tom is paranoid as all hell. What I didn’t know was that he also represents the title company that I was referred to for this transaction.

So two days before closing, he starts talking like a paranoid freak. He refuses to close the 2nd transaction. He tells me that the underwriter at the title company may not approve of it because they have to watch their behinds in this crazy market. (Keep in mind that he also represents the title company, so he technically is the underwriter).

So now the seller is a person who lives out of state (45minutes away) and doesn’t want to miss work to attend closing. He just wants to get the deal done already and he signed all necessary documents. So he gave power of attorney to his attorney to close on his behalf. He’s married, but they don’t live together. Wife also gave power of attorney.

Now closing has been rescheduled 3 times and it’s now set for Friday, everything is ready. We wanted to close the 2nd transaction on the following Tuesday, but we couldn’t because Tom insisted on recording the deed on Monday and it wouldn’t be ready in time. OKAY, I’ll accept that. Even though the locked-rate for the mortgage expires on Tues and the 2nd buyer lost a great rate.

Then Friday morning, Tom talks to the seller’s attorney and tells him that he won’t do the close unless the Sellers attend closing. The husband lives 45minutes away, wife lives 30 minutes away. Neither live together, both work, and they both signed the power of attorney. So the deal, yet again, doesn’t close.

It’s now rescheduled for next week, given that the sellers are both able to come to the attorney’s office. They don’t have to come together, they can come separate. And then hopefully, we can schedule to close.

Now I’m so sick and tired of this attorney. I’m experiencing what I’ve heard from others: I have an attorney who’s job is to pick a part this deal and try to find every possible way to kill it.

What would you all do in this case? We didn’t even pay him a retainer fee because it was a referral and right now I feel like canceling everything and getting a competent attorney. I could understand him being cautious, but they had told me that they’d be able to handle this transaction and it’s obviously BS because he has very little experience with short sales. Case in point: I had two approval letters from the same bank and he asked me “Why does one approval letter show only $0.00 going to the bank?”.

Would you toss this guy out and take the deal elsewhere at this point?

OR

Would you give it a final try, try to get the sellers to their attorney’s office, and then try to close soon after.

2

Oof. Too much fun! :bouncemulti Well, long term solution will obviously be to find a better attorney. With this one, it sounds like you may have it in the bag as long as the actual people show up. I would think that a notarized seller signing documents would work. In my state of Utah, my sellers couldn’t make it to signing, so the closing Title agent said I could just have them get the paperwork all signed and notarized and faxed back to the Title company and he would take care of it all. Yes, I have a very good Title company for short-sales and same-day closings. :cool
Of course, you can always take The Secert’s approach and just think positively hard enough and it will all work out… :bs haha! No, really, I think if you can get everyone at the same place and the same time, it should work. That, concerning short-sales, is probably the greatest skill to have - getting everyone to the right place at the right time. There are so many different parties involved with short-sales.
If it falls thru on this last time, you really need to look around for another Title company. On this one, it seems that the numbers aren’t setting the walk-away point, its the people involved. In any case, good luck! It does seem like you got it all said and done; just need that last little bit of tenacious persistence to see it through.

Dean

3

Wow. That’s a hard call.

At this point, giving to another attorney would probably slow up the process even more (if that’s possible) as they would have to redo alot of the paper/legwork already performed. However, I’d seriously be afraid of WHAT this Tom would say to the clients once they’re in front of him.

I’d definitely be at the closing to monitor him, and I may even hire another, more competent, attorney to attend as well, just in case.

Raj

4

I actually did have another attorney call him on Friday after he pulled all this nonsense, and the other attorney agreed that he’s being extra cautious without good reason.

I decided to stick with the parties for now. I’ll call him tomorrow and go over details with him again and make sure he can close this week and not further ruin the deal. If he can’t then I’m dumping him as quick as I can.

5

If I were you I would just go with the new attorney, I had an attorney swear up and down that what I was doing was illegal, this after he intially reviewed the deal and agreed it was ok. Long story short, don’t waste your time with imbesciles, just because they are lawyers that doesn’t mean they know what they are doing. I could have wasted months trying to convince him, instead I got another attorney and closed a week later. Problem solved. I know it seems like you are starting from scratch, but in the end you will probably close faster just getting someone else.