Author Topic: Short sale?  (Read 3793 times)

0 Members and 1 Guest are viewing this topic.

MommyPenguin

  • Hero Member
  • ***
  • Posts: 4126
    • My blog!
Short sale?
« on: January 02, 2011, 09:04:12 AM »
Has anybody ever bought a house through a short sale?  What was your experience?

My husband and I are really tempted by a house that's going for a great price, in a great area.  It's a short sale.  We have plenty of time, so the delay isn't an issue.  Just wondering if anybody has done it, how long it took, whether you were happy with it, etc.

Where's the Quiet?

  • Member
  • **
  • Posts: 188
Re: Short sale?
« Reply #1 on: January 02, 2011, 09:35:03 AM »
We tried to buy a short sale last spring. The house we put an offer on had two lienholders on it so we had to have the offer accepted by three people...the seller, first lienholder and second lienholder. We ended up competing with another potential buyer and offered $5K over the asking price. Our offer was accepted by the seller and the first lienholder within 3 weeks, but the second lienholder never answered. Three months after our offer was accepted by the seller, I googled the address and found out it was being auctioned off two weeks from then! I don't think our experience was the norm. Some banks are really quick (WF/Wachovia average 45 days from offer acceptance to close) while some are still taking 3 months. As long as your agent and the seller's agent are experienced in short sales the process should go relatively smoothly. Good luck!

MrsJWine

  • Super Hero!
  • ****
  • Posts: 8783
  • I have an excessive fondness for parentheses.
    • Wallydraigle
Re: Short sale?
« Reply #2 on: January 02, 2011, 11:45:12 AM »
Has anybody ever bought a house through a short sale?  What was your experience?

My husband and I are really tempted by a house that's going for a great price, in a great area.  It's a short sale.  We have plenty of time, so the delay isn't an issue.  Just wondering if anybody has done it, how long it took, whether you were happy with it, etc.

We haven't, but I have heard that lately it's not as much of a red flag as it used to be.  In this market, LOTS of people are doing it, even people who have taken good care of their homes.


I have a blog.  I hate that word.


Utah

sparksals

  • Super Hero!
  • ****
  • Posts: 17328
Re: Short sale?
« Reply #3 on: January 02, 2011, 02:20:30 PM »
I have never bought one and probably wouldn't.  The reason being is it does take a long time since the bank also has to approve the sale.  One thing you may want get your realtor to ask if the selling price was approved by the bank when it was listed.  So many people list their shortsale and then when they do get an offer, the bank says no, our minimum is offer + XXX Dollars. 
 

You can have an inspection, but you do take a greater risk buying a short sale.  If they haven't been able to pay the mortgage, chances are they haven't been able to pay upkeep on the house.  There could be some big maintenance problems.

megswsu

  • "You fell victim to one of the classic blunders! The most famous is never get involved in a land war in Asia"
  • Hero Member
  • ***
  • Posts: 2613
Re: Short sale?
« Reply #4 on: January 02, 2011, 02:32:43 PM »
Well if you have time to wait, then go for it. Just be prepared to possibly sign, and resign and resign, etc. I sold our condo 2 years ago through a short sale and it took forever. I can't tell you how many times I had to resign paperwork b/c the banks needed it updated, whatever. It got to be ridiculous, and the process took almost 5 months. However a friend of mine sold her home in a short sale over the fall and it didn't take as long as mine did. Maybe 2-3 months? Can't remember. But I think b/c short sales are becoming more common, relators/bankers/etc. seem to know what to do and how to stay ahead of things so the process doesn't take quite as long as it used to. Of course it all depends on the house and what's owed, the banks, etc. Hopefully it won't take too long though!





shhh its me

  • Super Hero!
  • ****
  • Posts: 6839
Re: Short sale?
« Reply #5 on: January 02, 2011, 02:51:45 PM »
I have never bought one and probably wouldn't.  The reason being is it does take a long time since the bank also has to approve the sale.  One thing you may want get your realtor to ask if the selling price was approved by the bank when it was listed.  So many people list their shortsale and then when they do get an offer, the bank says no, our minimum is offer + XXX Dollars. 
 

You can have an inspection, but you do take a greater risk buying a short sale.  If they haven't been able to pay the mortgage, chances are they haven't been able to pay upkeep on the house.  There could be some big maintenance problems.
[/b]

This is a valid point but in the current market I'd be less concerned then 5 years ago. People are much less motivated to try to keep their homes if they owe $200,000 and their home is worth $90,000 then in the past when it was more likely they owed $200,000 on a house that was worth $210,000. That doesn't change the fact people won't put a new roof on a house that they're about to lose , just that rather then struggle with payment for years they are more likely to be willing to walk away sooner. 

Get an inspection , be aware it may take months and know the deal could fall apart.  I would also make sure to be clear when your offer expired.

mbbored

  • Super Hero!
  • ****
  • Posts: 5315
    • Budget Grad Student
Re: Short sale?
« Reply #6 on: January 02, 2011, 03:31:56 PM »
Avoid houses with Bank of America owned mortgages.  They're the worst at short sales.  I tried to buy one, BoA never responded to any communication from my or the seller's agents.  I ended up buying another property down the road and now that place is in foreclosure, and BoA is still dragging their feet.

dirtyweasel

  • Hero Member
  • ***
  • Posts: 1388
  • Just keep swimming, just keep swimming...
Re: Short sale?
« Reply #7 on: January 02, 2011, 04:06:05 PM »
Actually, I remember reading an article in our newspaper about how short sales are becoming increasingly harder to do because there is such a huge market of them right now that banks are having a hard time processing them.  Here's the article if you're interested:  http://www.signonsandiego.com/news/2009/jun/07/1h07short184053-short-sales-stymied-complications-/




AfleetAlex

  • Member
  • **
  • Posts: 399
  • Proud cat mom and Auntie
Re: Short sale?
« Reply #8 on: January 23, 2013, 03:03:41 PM »
I hope no one minds if I revive this topic, as I'm going through the same thing and could use some advice on the steps involved. A negotiator has been assigned and the sellers accepted my offer and have moved out of state (so they won't be moving back in) but I can't seem to get an answer on what happens next and how soon it could happen. My realtor isn't being as helpful as I had hoped. (She did warn me it could take 6-8 months, and we're at 5 months already.)
I have a chronic case of foot-in-mouth disease.

JenJay

  • I'm a nonconformist who doesn't conform to the prevailing standards of nonconformity.
  • Super Hero!
  • ****
  • Posts: 5799
Re: Short sale?
« Reply #9 on: January 23, 2013, 03:17:40 PM »
The seller accepting your offer is just a formality, it's the bank that owns the house that gets to decide and therein lies the holdup. DH and I had to list our house as a short sale when we moved out of state for DH's job. The buyers offered a reasonable price, we accepted, the bank tentatively approved it, and it still took a couple more months to close. There wasn't much communication from our realtor because there was nothing for him to report, it's a waiting game with the bank. Hang in there!  :-\

wheeitsme

  • Hero Member
  • ***
  • Posts: 3961
Re: Short sale?
« Reply #10 on: January 23, 2013, 03:22:10 PM »
Let's see if I remember... (we had a really good experience)...

I believe that both the owners and the bank have to accept your offer.  It was the bank that took the longest.  It sounds like the owners have accepted, but the hold up is the bank accepting the offer.  It could be for any number of reasons.  Has the bank received the offer?  Did it go to the right department in the bank?  Is it just sitting on the right desk, but the bank worker hasn't got around to it?

Perhaps you could ask your realtor to check with the bank?

(oops, answered at the same time!)  ;)

AfleetAlex

  • Member
  • **
  • Posts: 399
  • Proud cat mom and Auntie
Re: Short sale?
« Reply #11 on: January 23, 2013, 03:40:03 PM »
Thanks for responding! The owners have accepted, although I'm partially expecting the bank to counter, and I have some wiggle room.

The last thing I heard was that a negotiator was assigned and then, when the owners took the job out of state just recently, the bank requested all their updated financials. (They had first moved to another city in the state; the house has been empty all this time but was winterized.)

When I ask for a time frame, my realtor encourages me to look at other houses, even though I've already said I'm willing to look at houses I like in the meantime. I don't think she wants to wait for the process to go through, honestly.
I have a chronic case of foot-in-mouth disease.

wheeitsme

  • Hero Member
  • ***
  • Posts: 3961
Re: Short sale?
« Reply #12 on: January 23, 2013, 04:11:51 PM »
Thanks for responding! The owners have accepted, although I'm partially expecting the bank to counter, and I have some wiggle room.

The last thing I heard was that a negotiator was assigned and then, when the owners took the job out of state just recently, the bank requested all their updated financials. (They had first moved to another city in the state; the house has been empty all this time but was winterized.)

When I ask for a time frame, my realtor encourages me to look at other houses, even though I've already said I'm willing to look at houses I like in the meantime. I don't think she wants to wait for the process to go through, honestly.

With our house, it was the bank that came back with a counter-offer.  But they did so fairly quickly.

...I'm wondering if the "new job out of state" is going to put a hitch in the proceedings.  Because short sales are usually due to financial difficulties on the owner's part.

AfleetAlex

  • Member
  • **
  • Posts: 399
  • Proud cat mom and Auntie
Re: Short sale?
« Reply #13 on: January 23, 2013, 04:21:07 PM »
I was trying to figure that out myself, since the sellers had first taken a job about an hour away, had to send in all those financials, etc, and then just recently took one literally all the way across the country, so those financials had to be sent in as well. My realtor couldn't say how much that would delay things, however.

I assume the negotiator would be the one who might determine whether the bank should counter-offer? I feel like I'm waiting and waiting for nothing to happen!   :)
I have a chronic case of foot-in-mouth disease.

Spriggy

  • Jr. Member
  • *
  • Posts: 54
Re: Short sale?
« Reply #14 on: January 23, 2013, 04:44:31 PM »
I have never purchased a short-sale.  But I have been on the other end - I was the short-saler.

I had two lien holders on my property (I did an 80%/20% loan).  The entire process took 3 months - but that was because I was very diligent in calling both lien holders on a repeated (i.e. daily) basis.

Each lien holder need about 15 - 20 documents (paycheck stubs, bank statements, letter of why I needed a short sale, tax files, etc.).  Of course all this information had to be faxed to a generic number, so I ended sending this information multiple times because it always "wasn't in the file".  And they always needed the most current information, so I kept having to update the documents I had sent in.

The first lien holder really couldn't approve anything until the second lien holder approved their portion of the deal.  (If you have two loans a portion of the sale price goes to the first lien and a SMALL portion goes to the second lien).  Once the second lien holder approved the deal, the first lien holder approved the deal in a matter of hours. 

Of course my deal got approved by the lien holders at 4:45 PM on a Friday afternoon (8/27/2010).  Per the agreement I had signed with the purchaser originally, I had to have this deal closed by on Tuesday morning (8/31/2010) - so I manic moving session that weekend.  It is the closest I have ever come to a nervous breakdown.

So - lessons from my story:

1)  Never do an 80%/20% loan - causes too many headaches!!
2)  If you are the purchaser of a short sale - be patient - the seller probably is trying to get the deal accomplished as soon as possible.  But it is usually out of their hands.
3)  If you are the purchaser, do put a deadline in the agreement (or talk to your agent about it).  If my deal hadn't been approved by 8/31/2010 my purchaser could have walked away from the deal with no recourse.  And I would have been back a step one of finding a buyer.