[quote=t36tran]…Why would Blue Anchor, an outside party with no ownership stake want 45K paid directly to them to settle all the secondary liens? Why would I trust them to do so?…[/quote]
Because it would appear that the seller (and title co) would be on the hook if they didn’t do what you paid them $45K to do. In addition, your escrow company couldn’t prepare your file to close if all the conditions of escrow had not been met.
You could have countered your offer with a title company (and officer) of your choice now or included the contingency in your offer early on and the same goes for your vacancy contingency specifically mentioning that it is tenant occupied and the (owner’s) vehicles stored there must be removed. As an “arm’s length” purchaser, you have the right to title insurance. A reputable title insurance company will issue you a CLTA policy after COE. For your premium, they are guaranteeing your ownership rights subject to the purchase money lien(s) YOU placed there and any easements on the property previously granted to others. Back taxes are not a “lien” per se. They are automatic and are appurtenant (not exactly the correct word) to the property. The assessor won’t be able come after you for back taxes AFTER closing when the “seller” (in this case, the “SS negotiator”) was supposed to pay them. A reputable title company isn’t going to close and file your grant deed and trust deed if the outstanding property taxes aren’t paid and/or you can’t get clear title as they will be exposed if they do so and subject to an expensive “quiet title” claim. In CA, escrow officers have to divvy taxes up between buyer and seller up to the closing date. Their duties are strictly laid out ad infinitum in state law and they will not do ANYTHING not agreed to by both buyer and seller and included in the escrow instructions and all the amendments thereto which they prepare.
Had you had your *own* agent, they would have ordered you a preliminary title report at a discounted rate (refundable towards eventual purchase of your CLTA policy) and it would have answered all your questions early on … to avoid wasting so much of your time . They also would have kept on the LA like glue to find out the status of “negotiations” and asked for proof of submission of your offer to the lender (fax/e-mail confirmation) immediately after receiving a signed acceptance back from seller. At least a GOOD agent who knows what they are doing would have.
You stated this was your first offer yet you placed it with the LA. I am curious if you ever had your own agent and if not, why not?
It is possible that Don and agent Weintraub aren’t speaking to you now until they talk to their counsel because you threatened them with a DRE complaint. I don’t know. Maybe he had only recently sent your offer into the lender (or his SS negotiators to negotiate with the lender(s)) when the $371K offer of his supposed “investor” was turned down. He did not properly explain to you in November that your offer was actually in a “backup” position.”
I’m not condoning the way the broker representing you does business. He might have gotten the seller to accept your offer as a “back-up” to an existing investor offer which ended up not panning out. So the SS negotiator in FL had already negotiated with the first and second TD holders and knew what they would accept when he finally e-mailed you. The way I see it, “Sullivan” wasn’t “technically” negotiating on behalf of any of the parties. He was performing a paid service for Don’s brokerage and thus is a “service provider.” Don and his agent, Weintraub were the parties’ frontmen. If it is set up like this, I can see how the FL SS negotiators don’t have to be licensed in the states of the properties they attempt to negotiate on. I feel Sullivan contacting you directly was stepping over the line. He should have contacted Don who would show you Sullivan’s e-mail to explain why you had to raise your offer $45K to get it accepted and handle it involving you from there.
In defense of SS negotiators, in many instances, it is not easy to locate the 2nd and 3rd TD investors and it could take weeks or months to do so, having to go thru MERS. Many are simply individuals and they are scattered everywhere. B of A only has what records they could locate which were stored at Countrywide at the time of their takeover. Some of CW’s “independent loan officers” processing the loans on the buyer’s end also handled the immediate sell-off of CW’s PM 2nd TDs and cash-out refi 2nd TDs or procured the investor themselves. CW paid them points, fees and HUGE yield-spread premiums for doing so … all coming out of the borrowers pocket in the form of closing costs. I know of TWO former CA loan officers who primarily originated for Countrywide in San Diego County who are serving time in Federal prison for their wayward RE lending activities, ONE being housed in Northern CA. Of course, their DRE licenses were revoked.
Several weeks after closing, you could check ARCC and see if the two reconveyances were filed in seller’s name, just to satisfy your curiosity.
I am now unclear whether your outstanding offer (before Sullivan’s e-mail) was $371K or $411K. Adding the $45K recently asked for would make it an “offer” for $416K or $456K, depending on what you ended up coming to after being asked by your agent to “raise it” a couple of times.
In any case, this property was WORTH $411K, $416K or $456K and would easily have appraised at the highest sale price in the absence of structural problems.
Again, I’m not siding with your RE broker here. At the very least, he had poor communication skills.
I just think you may have had a knee-jerk reaction and jumped the gun. That is an exceptional property and I would have insisted my broker raise my offer including the $45K to Anchor Blue Advisors and list the liens and closing costs it would be used to pay on it on the appropriate CAR form and insist on a receipt from HIM for my check or certified funds made out to Blue Anchor. In any case, the disposition of your $45K would all be shown to you line by line on your HUD 1 at COE). At the same time, I would have included my vacancy contingency, approval of a soils-report contingency (giving my engineer time to make the report) and selection of my own title company if I didn’t have confidence in the one the LB wanted to use. I doubt these (very reasonable) contingencies would have been countered by the seller.
For the sake of discussion, let’s say the 2nd TD holder is currently owed $63K. If taxes were going to be $3K, Don’s commission was going to be ~$20K, Blue Anchor’s fee was going to be ~$7K, termite tenting (house only) was going to be ~$2K, seller’s other closing costs were going to be ~5K, that only leaves ~$8K of your $45K for the investor to satisfy the 2nd TD. That’s about 12.7% of what they were owed and 6.7% MORE than they would have received if foreclosure had already been commenced by BNY Mellon.
As they say in RE parlance, this is the worst house on the best block (it even appeared to have been recently painted – at least the trim). As I told you in PM, it doesn’t get any better than this, tran. 15-20 yrs ago, in another life, I would have JUMPED on a (rare) property like this if I had seen it listed (with my engineer chained to my ankle, of course ).
I now feel that the reason the investor didn’t end up taking it when Blue Anchor wanted them to up their offer $45K was because there was very little work they could do to raise the value and flip it. It wasn’t worth buying for $416K and then attempting to resell it for $456K+? UNLESS they were part of a scheme described by SDR where there were two simultaneous closings in very close proximity to one another. This property would be too cost prohibitive to buy and hold it as a rental due primarily to maintenance costs, IMHO. And transaction costs would eat them up.
