This Real Estate Deal Almost Fell Apart

Most people only see the “Just Closed” post.

What they don’t see is the chaos behind the scenes.

In this episode of Coffee Break Real Estate, Danny and Adam break down a real deal that nearly fell apart, from aggressive negotiations and inspection issues to crypto fund complications, underwriting stress, cure notices, and a race against the clock to close on time.

This one had everything.

If you’ve ever wondered what really happens during a real estate transaction, this episode gives you an honest look behind the curtain and shows why having the right team matters when things get messy.

Coffee Break Real Estate is hosted by Danny Benjamin and Adam Youhanna, bringing you real world stories, market insight, and behind the scenes conversations from the Arizona real estate industry.

🎵 Music by Mahami Music

Connect with Danny Benjamin:
📸 Instagram: @danny.s.benjamin
🌐 www.YourAgentDanny.com

Connect with Adam Youhanna:
📸 Instagram: @adamyouhanna
🌐 www.MortgageAdvisorAdam.com

Intro and outro music provided by Mahami Music ‪https://www.youtube.com/@mahamimusic

Connect with the hosts:

Danny Benjamin
@dsbexplores
www.YourAgentDanny.com

Adam Youhanna
@adamyouhanna
www.MortgageAdvisorAdam.com

Coffee Break Real Estate
Hosted by Danny Benjamin, real estate agent and expert, and Adam Youhanna, mortgage advisor

Focused on all things real estate.

Subscribe for weekly conversations on real world real estate.
Questions or topic requests welcome.

Transcript

SPEAKER_01 0:09

Alright, welcome back to Coffee Break Real Estate. Um, it's been a little while, but uh Adam and I are back, and uh just to give you guys an update, we are going to be doing shorter episodes, so we're gonna do around 30 minutes uh just so you guys can get your information quicker and get some time back in your day, which we all want. So um yeah, let's get started. So, Adam, what are you drinking?

SPEAKER_00 0:36

I'm drinking my mushroom coffee as usual. Uh threw some ice in there since you know it's a nice day out today. How about you?

SPEAKER_01 0:46

Uh black coffee as usual, and I'm I'm really boring today. I have a a plain mug. Where's the other mugs? The dishwasher? I just no, I just grabbed this. It was the first one I grabbed this morning, so it's not fun today. It's raining outside, so you know, it's just normal.

SPEAKER_00 1:06

Yeah, yeah. That's why I see this is the opposite. Usually it's the weather's bad here, but I know it's crazy. All right, cool. Today we're gonna be talking about stuff that you don't usually see on social media, right? You jump on, you see realtors, loan originators posting a picture of the housing just closed as a caption, right? And everything looks amazing. What we're gonna do is kind of go behind the scenes here and talk about some deals that are not the typical cookie cutter deals where everything magically works along the process. We're gonna go over one deal in particular that got pretty messy, you know. Maybe you could even say starting from the inspection, but more on the financing side. So let's start with Danny. Um, do you want to jump in and just you know, start with how you got in contact with the client or how you met them?

SPEAKER_01 2:02

Yeah. So um these are clients that I know um personally. I've met them. I don't know like super good friends with them, but um met them both. It was actually a couple that I kind of know each of them separately. Um, but long story short, got in contact with them on Instagram. They reached out and said, Hey, we're looking at buying a house and can you help us out? And I was like, Yeah. Um, and on this one particular, they they had a house chosen already. So that um we were willing to go check out a lot more and we were ready to. Um, but they had one chosen and when we viewed it, uh they liked that, you know, that specific one and and uh were ready to put an offer in right away. But um, you know, I I think the original contact with them that I I had them reach out to you and and get a pre-quall. So um they didn't have a realtor or a lender they were working with, so it was it was a you know just kind of a lead that came in on social media and yeah.

SPEAKER_00 2:59

So we saw them on the dream team.

SPEAKER_01 3:01

The dream team, yeah.

SPEAKER_00 3:03

So what was so what was going on in your mind and your conversations with them? So I, you know, I got them the pre-qualification, as they say in Arizona, but you know, the way I say it is uh in like a full-blown pre-approval letter. So that means going through the underwriting, automated system, and then also, you know, making sure that everything when we plugged it in, everything looks good, and we were able to give some options. So this was going on in process because timing was of the essence. So Danny was thinking about his offer. So tell me about that with your conversation with them and what you decided to do.

SPEAKER_01 3:44

Yeah, so I mean, just like any offer, um, I comp the house out and uh looked at comparables and and figured out what I thought that house was worth. Um, you know, this house wasn't super nice. I mean, it was move-in ready for sure. Um, but luckily they were going into this house wanting to remodel it. So um I knew we had some leverage there because it wasn't a super nice house and they did have it a little overpriced. So I already knew we were gonna be asking for a little bit less. Um it was listed at 550. Okay. Um, you know, and remodeled houses in that area were going for around 600. So, you know, I knew it was a little overpriced because that remodel, it was a you know, fairly big house, so that remodel is gonna cost a lot of money. Um and then I kind of looked at everything, right? Like I normally do. I don't just like treat all offers the same. So I looked at who the owner was and I saw that it was owned by a trust company. Um, so then it was like, okay, what's what's going on here? Why is it owned by a trust company? Sometimes it's just someone's personal trust. Um, but this one I could tell was an actual trust company, like a fiduciary that handles usually probates. So I figured it was it was a probate situation. Um so then I did what I always do, and I called the the listing agent to kind of just ask general questions to kind of feel out what's going on. Um, and that's where I got the info that hey, this was a probate, this is a trust company. So I was like, okay, um, you know, normally that's sometimes that's not a good thing, but I I felt like in this situation it was because um they're not emotional, they're just trying to get the house sold. Um, they have a fiduciary duty to get the house sold. So I was like, okay, we can be a little more aggressive because when the when when you're when there's emotions involved, if you offer too low, sometimes you can upset people and then they won't want to even counteroffer. But I was like, Yeah, this is a trust company, like they're gonna, they're gonna counter offer, you know. Um, and then we submit, oh, and then I got with you, like we always do, because I was like, I don't I don't always get a lot of information on our clients' financials, you do. Um, so then it was like, hey, what goals do they have? And I think when you and I talked, it was kind of hey, you know, they're they're pre-approved for X amount, but they want to focus on not coming to the closing table with a lot of money, right?

SPEAKER_00 6:10

Correct. Um they needed it for renovations, exactly.

SPEAKER_01 6:14

So that's when I was like, okay, well, we're not gonna go just a straight purchase price, you know, reduction. We're gonna do a purchase price reduction and ask for credits from the seller. Um and for those of you that don't know, credits are essentially, you know, you're getting the house for cheaper because you're getting that money. But what credits do is they apply towards stuff at closing. So closing costs, um, rate buy downs, insurance, different things where instead of just you lowering your price where you're still coming to the closing table with a lot of money, this actually reduces how much you're coming to the table, uh, the closing table with because the seller is actually paying for those items. So what we ended on was a $530,000 sales price. Um, so $20K off list, plus a 2% concession on top of that. So the net number there was about $519. I think a little bit more than $519. Um, but that got and then it got accepted right away. So that and and you know, that was like it was nice that it got accepted, but then you know, psychologically it's always like, man, could I have asked for more? But I think it was I think it was that sweet spot number um where they probably wouldn't have gone down much more, but uh um we were able to get the deal deal wrapped up pretty quick.

SPEAKER_00 7:30

So yeah, and I saw those numbers and I'm like, wow, that's pretty good. So right off the bat, you just got about 31,000 off of the list price. So that's always gonna be beneficial for the for the clients.

SPEAKER_01 7:43

Um that's what I'll honestly a lot of people miss that is like a lot of people make you know think they're making money later on with appreciation, and and you do do that, you know, or the remodel is gonna add value, but a lot of times you you know, you you make a lot of the money up front. So um when you're when you buy, like a good buy is is where you're making a lot of your money.

SPEAKER_00 8:03

Yeah, and if you know you're not negotiating hard up front, then you know you're already losing.

SPEAKER_01 8:08

Yeah, yeah. So yeah, and then um, yeah, then after that we had the inspection. Um we already kind of could tell that there were some uh gonna be some issues with this house. Uh we saw some foundation issues, so we got a pretty good inspection actually. Um we we had some more specialists come out, not just a general inspection. But um, long story short, we did the inspection and then I got a little aggressive on that one too. And and we asked for 25, or we asked for I think it was like 40 grand off. Um, and it was warranted. There was a lot of stuff that that needed, you know, needed to get fixed that was about that much. But um we went back and forth with seller and I think we ended on 25 grand off. So now we're down to 505 plus the 2% commission. So or uh concession. So I think that put us at like 480, 490 or something like that.

SPEAKER_00 9:01

But yeah, yeah, 505 minus 10,100. So you were at 490, 4900. So that's okay, $55,100 off of that list price, which is pretty amazing. Nice work there. That's great. Yeah, and then of course, Danny, Dan, yeah, Dream Team. Danny, Danny put in the work, got some good uh, got some good stuff out of it, good pricing and reductions. Then he passed it over to me, and that's where things got messy. Uh so uh, you know, initially what we did was when uh worked on a pre-approval, I gave some options to them, like you know, as I always do, just you know, looking at FHA loans versus conventional and stuff like that. So pretty much gave them a side-by-side presentation so they could see what's going on, and then they wanted to push for the conventional loan, which makes sense for most of the time. Um, but we started coming up.

SPEAKER_01 9:57

I'm gonna stop you right there. I I like what you did with the video. Um, so Adam had very, very good communication where he did a uh a video with a side-by-side comparison and didn't tell them what to do, just said, hey, this is you know how much you're gonna bring to the table with this loan versus this loan. This is how much your payments can be with this loan versus this loan. This is the pros and cons of each. And he let them make the decision. But um that video was amazing. Just walking through each one and letting them know what decision to make.

SPEAKER_00 10:24

So yeah, it's just you know, empowering them. No, you're you're right. You know, it's that's what we do. It's like we don't make the decision for them, we just kind of give them the information and have them be empowered to make that decision. Um, but yeah, so with the with the financing, when we got into underwriting and all that, turns out one of the the buyer had something on their credit report that they did not know of. And really quick, this is the reason why you want to get your credit pulled right away, is because sometimes things are on there and you're like, what the heck? So the borrower didn't know something that was on there. And then it turns out there was something on there that was past due for a long time. They didn't realize it, and the underwriter was telling us, okay, well, you're gonna have to pay that at closing or before. And let's just say it was around $5,000, okay? Our client's goal is to come to the closing table with as little money as possible. So this adding $5,000 to what they have to bring to the table is gonna be giving us issues, right? And they're not gonna be happy with it. So we got creative. Um, we ordered something called a supplementary uh supplement uh trade line. So what it did was kind of update the trade line because it wasn't updated since last year. So we did that, and then a new trade line came in saying it was a charge off. And what that did was it allowed us to not have to pay it at closing, which was nice. So that $5,000 right there that they had to come to the table, we got it taken care of. Um, next thing, you know, something that's a very gray area right now, but it's starting to get more uh more and more leeway is crypto funds. You know, using crypto funds as assets or using crypto funds for down payment and closing costs. Um this lender was kind of a gray area and what they wanted, and it's like, you know what? Certain things in crypto that not a lot of banks and lenders pay attention to is just like, you know, the the wallet, right? The being able to have a wallet that's very secure because you know, you've heard of some crypto scams happening where people were just out of nowhere losing crypto money from their wallets. Yeah. So our borrowers, you know, they're super smart. They put their money in a in a crypto wallet that was very, very encrypted. Even their personal information was hard to obtain from that wallet.

SPEAKER_01 12:42

So that's the personal information, I think, right? It was like one of the what's it called? That's what we learned was a non-custodial versus custodial, where it's like the non- I think non-custodial is like you you don't have your name on that thing at all. You just have like that the um whatever that code is called, the uh encrypted key or whatever that if you you know it's not your money, it's just you you have access to this wallet and it just sitting there.

SPEAKER_00 13:04

So yeah, it wasn't a passcode, it was like a passcode sentence that you had to put in. Yeah, yeah, like super long, yeah, yeah, yeah. Yeah, definitely. So um that's what was causing some issues and you know, getting the funds, making sure the funds were actually um converted to US dollars. But um, anyways, we found a way around that, but that was kind of like towards the end where timing was kind of an issue there, and we um we ended up getting it done. But Danny's something happened that I have never had happen to me, and I don't know if it's more of an Arizona thing, but tell us about uh the trust company on the day that we were supposed to be clear to close.

SPEAKER_01 13:51

That's right. Okay, so um so in Arizona, our contracts have what's called a cure uh notice and a cure period. So if anyone breaches contract, so if you go against the terms of the contract, the party that got breached on, so in this case, we breached because we didn't have a clear to close three days before closing. Um technically we're in breach, but that doesn't cancel the contract right away. In this case, the seller has to give us a cure notice saying, hey, you breached contract, you have three days to fix this breach. Um and then at that point, if they want, they can pull the contract completely. Um, so I've seen this before when I was wholesaling with closing dates. So if you didn't close on the day you were supposed to, the seller would send you a cure notice, um, giving you three more days to close. So I've never seen it with anyone do it with a clear to close, but I think because this was a trust company, they just are on it like, you know, this is a contract and this is what we have to do. Like I said, there's no emotions. So it was kind of like, hey, you need a clear to close. Um, so it was Friday, and we were supposed to have a clear to close. And I was like, ah, we'll be good, you know, like because honestly, deals go one, two, three days past closing days all the time, and most times sellers are fine with it. Like, it's just, you know, as long as the lender's in communication and everything's looking good, it's fine. But we got a cure notice. Um, so I called Adam right away, and I'm like, hey, like now time is of the essence. Like, we need a clear to close by Monday, or else we are they there's a chance that they're gonna pull this contract.

SPEAKER_00 15:30

Um that was um and the thing that sucks about that situation was it was on a Friday, and it's not three business days, right? It's three three days.

SPEAKER_01 15:40

Three days. It's three days, but if it lands on a weekend, it'll get extended to Monday. But it was three days, it was Friday's the worst day to get cured. Yeah, literally, Friday is the worst day because you only have one business day to get everything fixed.

SPEAKER_00 15:51

Pretty much, pretty much. And you know what, honestly, I didn't feel that the deal was in jeopardy with the conditions that we had to get done. I just like Danny said, timing was of the essence. So, and and you know, the timing wasn't on our side, especially with the whole weekend thing. So there were that was a moment where we had to literally like put the pedal to the metal. Like underwriters, I had I had them replying back to me on the weekend, like literally Saturday. I was talking to them on Friday, and I was like, please help me on Saturday. You know, this is something that we need to get done for these buyers, they're great people, they're newlyweds, they're they're getting their first home. We got to get this done. We can't lose this house.

SPEAKER_01 16:36

Oh my God. Yeah, that was stressful. And from my side, I was just literally just making sure, you know, all parties were staying calm because I was kind of in the middle of it all. I was like, I don't have any control. I mean, Adam was too, you know, it's uh literally like the underwriter. So we're just kind of all relaying info to each other, and I'm letting the seller's agent know, like, hey, we're good. Adam's talking to the seller's agent, I'm talking to the buyers. Like, you know, everything was everyone was staying calm, which was nice, but it was me except me and Adam, obviously. Yeah, of course. We were stressing out that weekend.

SPEAKER_00 17:04

We were stressing and sweating, and I we were were we out of town? Was that when we were in um Michigan?

SPEAKER_01 17:12

No, no, no, no. Um, I don't remember when I don't remember if we went before or after to Michigan, but I remember it may have been right around that time, I think.

SPEAKER_00 17:22

I think it was because I was at the airport uh when I was talking to the borrower.

SPEAKER_01 17:28

I think we got the we got the cure notice the day after we got back from Michigan.

SPEAKER_00 17:31

Oh, there you go. Yeah, yeah. Okay. So all right. So I mean that was that was tough. And just I just want to throw in there that you know Danny was saying um earlier that working with a trust company, you know, there's not emotions involved, which is good on the negotiating side. But again, if we're not able to meet deadlines, there's also no emotion there as well. Yeah, and that won't favor us to be able to make sure we get everything done in a timely manner.

SPEAKER_01 18:00

Yep. Yep. But then, you know, Adam uh Adam made it happen, and I think it was on Monday. Um, you stepped up big and and you pushed everyone, and we got the clear to close on Monday, which was very nice. Um, and then I think that the the trust company did back off at that point because we didn't get a cure on Monday, because Monday was closing day, by the way, guys. So we were supposed to close on Monday. Um, but they didn't send us a cure notice saying, hey, you didn't close, you have three days to close. So that actually bought us a little bit more time, even, but um Adam stepped up big and I think we got it closed on Wednesday, Tuesday, Tuesday, you know, Tuesday. So we we had through Thursday or Friday at this point, um, but um you got it done and we we closed on Tuesday, so yeah.

SPEAKER_00 18:48

That was uh getting that clear to close on that Monday and not getting a cure was like all right, now we could kind of relax and you know just let things unfold with the title company. So and then we told them, like, hey, we can close on Wednesday, and they're like, oh great. And then we ended up buyers started signing everything on Tuesday, and then everything was done on Wednesday. So that worked out perfectly. I was stressing so hard for that week and a half. It was crazy.

SPEAKER_01 19:15

It was a lot for sure. But honestly, this is truly where like having the right lender matters a lot. Uh I mean, there's Adam had to go above and beyond. It wasn't just like a anything easy. So I feel like other people uh may have given up or not pushed as hard as they did. And and with timing being of the essence in this one, if you missed, you know, if we got that clear to close 12 hours later, we would have been screwed. Like we would have had to cancel that contract. So um, yeah, just super like you know, just super fast problem solving. I you know, the communication from you, I think, was was the best part too, because it that helps ease people, right? Like you were on the phone with the listing agent. A lot of a lot of uh lenders won't do that. Um but yeah, you were just keeping everyone calm and and getting conditions cleared and um yeah, just made it happen. So this thing probably would have delayed or gotten canceled if it was if it was someone else.

SPEAKER_00 20:12

So yeah, I mean, um I appreciate that, but it's not just me, you know, it's the team because even when I was trying to do things on the actual condition side, you were in the background kind of calming the clients, talking to the listing agent as well, and just letting them know, like, hey, things are under control, it's just a timing issue and we're good. I mean, so it's like it's a team effort. Um, and then stuff like this, you know, experience helps. Um, being able to work through whatever we can to get to that finish line and just being able to do it together. Because if Danny and I were not on the same page, this deal won't close, you know, because he has to have my back and I have to have his back. We have to look out for the client's best interest. You know, and this deal doesn't close without that.

SPEAKER_01 21:02

Yeah, literally. You need it need a strong team for deals to close.

SPEAKER_00 21:06

So yeah, a hundred percent.

SPEAKER_01 21:09

Yeah, but we got it done. Um lots of lessons learned on that one. I mean small things like the, you know, the the crypto stuff. Like we know a lot more about that and what you need to do in in situations like that. Um you know, like uh like I said, you know, negotiating is is key. Um you really, really need a strong negotiator. I think that our buyers, you know, went into the deal with a decent amount of equity up front um and you know, a leg up. Um, but you know, I I I truly think when you're choosing an agent, uh a strong negotiator is probably the most important thing for sure. Um you know, you anyone can open doors, but you want someone that that can actually negotiate. Um you want someone that can talk to other people and then and get you. Good price for a house. I mean, that's I think I think that's the the the biggest advantage to using a realtor. So that's what you should be choosing a realtor off of, you know.

SPEAKER_00 22:10

Yeah, definitely. I mean, you know, realtors you could also be good, but also you got to have that that uh that empathy and compassion for your clients as well. And I think that you had that a hundred percent from start to finish. Um, as far as lending goes, I mean, you're you're not done until the deal is funded, right? Um people think like, you know, hey, you're pre-approved, so everything is gonna be fine and dandy. I have somebody literally right now who we got a conditional approval and he's asking me, Are we clear to close yet? I'm like, hey, this isn't like in the movies, you know. It takes it takes 30 days for a reason, you know. Uh let's be patient. There's a lot of uh lot of parties involved in this, but uh he wants to go out and buy that new car already. Yeah, all right. He wants to start remodeling this house too. So but I mean, you know, things could change late, you know. We try to prevent them as much as we can. And, you know, with financing, we try to make sure that we know everything, but again, sometimes we don't. Um, and it the main thing that I would say to add on top of Danny's is you know, the difference is how your team handles these roadblocks that come in in front of us, and that's another way to be able to choose your team on who you work with as well.

SPEAKER_01 23:25

Yeah. Yeah, and like I said, yeah, your team's very, very important. And um, you know, like I said earlier, anybody can open doors, but not everybody can close. So it was uh our team that got it closed, and yeah, this was this was a hard one. A lot of lessons learned, and um like Adam said earlier, not things that you see on Instagram. You know, we we did put put the the just close post up, and it was great, you know, but um nobody knew what it took to get that close, so yeah, but a lot of pain behind that post. A lot of pain behind that post for sure. But um yeah, I mean I think we're we're done a little early. But if you guys want you know more breakdowns like this, let us know. Um you know, we have a lot more. Both of us have a decent amount of experience. So if this works out and you guys like it, let us know in the comments. We'll uh we'll get some more for you guys. So we'll catch you on the next one. Cheers. Catch you on the next one. See you guys.