Rancho Santa Fe Home – Sold!

Although I usually don’t reflect on the challenges that come with closing an escrow, I absolutely feel compelled to write about this one. The words of the French playwright Moliere, “The greater the obstacle, the more glory in overcoming it,” come to mind with the sale of this home and account for my need to share the story with you. Please realize that this experience is unique and not at all typical of sales of our Rancho Santa Fe homes. We sell a great deal of luxury homes in Rancho Santa Fe quickly at top dollar, however this property had its own story to tell.
I took a listing for a “traditional sale” on a property for $6,495,000, a realistic, competitive price for an enormous estate in a prestigious area of Rancho Santa Fe. Time passed and we had no buyers, so price reductions were made. Meanwhile the real estate market began to deteriorate, as did the homeowner’s capacity to pay his bills. The homeowner ended up defaulting on his mortgage, taxes, HOA fees, in an effort to help, I turn to a highly recommended Short Sale Negotiator to assist in the short sale process. The negotiator is to interface with the Bank and, supposedly, have better communication to facilitate the short sale proceedings. Our office continued to do the marketing, showings, and other needed services required when representing a home.
Within 120 days, I put the property under contract, with my own buyer, pending the BofA approval with a contract price over $3,800,000 and began the short sale process. Bank of America was the lien holder of record, BUT the lien was actually held by multiple investors. This presented a problem because the investors cannot believe that the property has diminished in value to significantly below the face value of the lien, approximately $4,200,000. We began the appraisal/Broker Purchase Opinion of Value process. All the the appraisals/BPO’s are ordered and completed by Bank of America and us (a total of nine). Time passes – too much time and my buyer canceled escrow. (Fortunately, I sold him another property.) With each subsequent appraisal, the property value decreased, but Bank of America and the investors refused to accept the reality of the home’s reduced appraisal.
At this point, the homeowner abandoned the property, turning off water and electricity, canceling the gardener and not maintaining the pool. Suddenly this former $6,500,000 estate deteriorates with each passing day. The list price dropped to $3,150,000. (Note that there were interim price reductions on a regular basis from the original $6,495,000.)
Then another Buyer goes under contract, pending the Bank of America approval and more time passes…. Months. A third buyer goes under contract, still pending Bank of America approval, but he subsequently backed out of contract because the house is too much of a disaster for his wife to accept.
After way too much time spent believing that the Short Sale Negotiator has facilitated the process, I release the Short Sale Negotiator for nonperformance. Connie and I take on the process, which in hindsight we should have done at the outset. (But recall, this SS negotiator was highly recommended by a person whose opinion I value.)
Meanwhile, the Rancho Santa Fe Fire District has been hounding us (as agents of the Homeowner, whom they cannot reach) for weed and fire abatement and they put a lien on the property. The HOA puts a lien on for the arrearages in dues. We keep both of these entities at bay, assuring them of a pending sale while much more time passes.
During this entire time, there is an ongoing lawsuit between legal representation for the homeowner and Bank of America attorneys. Finally, at the resolution of that legal action, the Homeowner files BANKRUPTCY!! The law is that we are not allowed to proceed with a short sale until and/or if the subject property is discharged from the bankruptcy proceedings. Luckily, our buyer is determined to wait.
Three more months pass and finally, the property is discharged from bankruptcy proceedings and we start our approval. The new buyer stayed under contract, despite the horrific condition of the property. all The landscaping is dead. The pool is dark green and the equipment all needed replacing. There is mold inside all house appliances and elsewhere. Mushrooms are growing out of the upstairs bedroom carpeting because of backed up drains that I had hired a plumber to unclog months ago. All the thresholds were dry rotted out. There was vandalism to electronic system and elsewhere. . . . and the list went on. At this juncture, the property had been abandoned for 11 months.
Well, as of today, and more than 1000 emails, written letters, countless telephone conversations, meetings, showings, negotiations, and so much more AND 1042 days later, we are closing!!!!!!!!! Final sales price on the property is $3,200,000 and I’m not sure who is more excited – me or the new homeowner.