Our team recently experienced a first in our combined 20 years in business. A fast-moving deal that almost closed escrow… but was derailed at the finish line. We had a hot off-market lead from a seller in foreclosure. The lender was forcing a sale and wanted their money back. The seller was asking $1,350,000 for 11 units and owed roughly $1,050,000 to the lender. The seller was insistent on walking away with something in his/her pocket.

Within 24 hours, we brought it to a buyer and put it under contract at $1,300,000. We conducted a short 5-day due diligence and negotiated a $100,000 credit for a leaky roof and deferred maintenance. The credit ate into the seller’s proceeds, but with the lender threatening auction, we had to move quickly. Then came the curveball. We were set to close escrow on Thursday. But on Monday, the escrow officer received a late payoff demand from the State Department of Health for a $56,000 medical bill—the seller’s mother had passed, and the state was claiming the debt.

Suddenly, the seller owed $56,000 more, and she didn’t have the funds. The lender gave a final notice: the property would be sent to auction the next day at 10 AM. Despite a last-ditch effort to have the buyer attend the auction, the timeline was too tight. The property was sold at auction two days before our scheduled close of escrow. Despite the brutality of the deal as a real estate advisor, we quickly got over it and laughed it off. It was a first and hopefully a last.

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