Too Long A Wait For A Short Sale (3116/3118 6th St. N.)

Photo by John Hoff

So I put an offer down on 3116/3118 6th St. N., and it was a different situation than what I'm used to, a "short sale" situation...

In Debt Up To The Eyeballs

So first it took about a week for the owner of the house, Keith Dawson, to get his "paperwork" together for the bank. There are two steps to a short sale, or so it is explained to me. First the so-called "owner" of the house--in debt up to his/her eyeballs--has to be willing to make the sale. Then the real owner of the house--the bank which made a bunch of bad loans to somebody whose dreams were bigger than their capabilities--has to be willing, as well, to go through with the proposed deal.

Let me say something about Keith Dawson, would-be rental property tycoon. WORD ON THE STREET is Keith Dawson ran for a board position with the Hawthorne Area Community Council, speaking well (of course) of his intentions, commitment, and experience. He got that board position. And then he proceeded to hardly ever show up. That's Keith Dawson, current owner of 3116/3118 6th St. N.

Who Suffers? Tenants

In fact, Kieth (apparently) didn't have the decency to tell his tenants he was unable to pay his mortgage and was trying to bring about a short sale. The tenants found that out from me, my real estate agent Juley Viger, Jake and Gabe of 612 Authentic, (who were tagging along, as usual, making their documentary) and Peter Teachout, who came to assess the condition of the house with a contractor's eye.

So, yeah, the tenants found out from about the foreclosure situation and how things were NOT ENTIRELY in the hands of their landlord--Keith Dawson--who had made them various promises and assurances. They were not happy people. The folks downstairs have a baby. The name of the baby is Steve, FYI.

There is no longer an upstairs tenant. He was supposedly given "good and valuable consideration" to leave. I saw the lease termination document. It seemed pretty vague on the details of what this "good and valuable consideration" was.

I wonder what that man really got?

A Suggested Policy Tweak

It seems to me tenants are always finding themselves in this situation. Sometimes the property in question doesn't have a rental license, but it sure as (expletive) still has tenants; whether the owner tells his bank about the presence of the tenants (and that stream of revenue) or not.

One simple policy tweak could do a world of good: a letter addressed to the "occupant" of the house in question should inform that person of the situation with the mortgage. It's clearly not enough to send letters to the owner of the house, wherever he might be. (Quite possibly New Hope, Minnesota, in the case of Keith Dawson)

The current mortgage crisis shows one thing very plainly: owners lie to their tenants in order to secure a stream of rent money. Or, at the very least, owners avoid telling their tenants all the facts. So somebody else needs to tell the tenants how their residence is being bought and sold right out from under them like a fat hog at the state fair.

Banks Need To Wake Up, Smell The Coffee

The seller's real estate agent, Vee Xayavong, was rather apologetic, but told me it would take 30-60 days to get an answer from the bank about whether they would sell the house at the price I offered. This is not even a guarantee of a "yes," but merely an ANSWER.

I'll say this about Vee Xayavong, first of all: the man works hard, is polite, and answers emails quite promptly. I have no criticism of him. As for the bank, however:

ARE YOU CRAZY? In this market, you expect me to wait around 30-60 days while you figure out your answer? There are 10 buyers to every one property, last I heard, or possibly 13 buyers to every one property. I am a buyer and I've got an offer on the table in front of you. And you think I'll wait 30-60 days for your answer? Why? Is the stack too large and I'm near the bottom? HIRE MORE PEOPLE. This is MONEY we're talking about, here, and the money is walking BYE BYE because you can't move fast enough.

These kind of clumsy, impersonal business practices have produced the current mortgage crisis. Unfortunately, the banks haven't gotten any smarter. TOO LONG TO WAIT FOR A SHORT SALE, BABY.

Then Again, Maybe I Won't...

On second thought...well, maybe I'll make another offer and have it be "contingent" on 3116/3118 6th St. N. not being offered to me at a decent price. I really like the tree in the front yard.

I'm meeting Juley Viger at lunch time tomorrow. We'll see.