Real Estate-Short Sales

Anyone on here ever BUY a house through a short sale? I understand it may take longer and be more of a grueling process. Any tips? I'm going to meet with an agent on Monday to look at one.

It can be very grueling depending upon the owner's lender. BofA is the worst.

For the seller it is a foreclosure, an assisted foreclosure, but a foreclosure nonetheless and will severely impact their credit and ability to ever purchase another home.

The Short part of short sale means it's sold for less than the Seller owes which means at some point in time the Seller will have a deficiency judgement show up on their credit and wages can be garnished, etc.

As a buyer since you will also need to sell this same house one day, you need to ask yourself is this a property issue, a Seller issue, or an economy issue? Most foreclosure issues are property issues which means you could end up with a foreclosure yourself later when you can't sell it either.

In general foreclosures are the least desirable type of home purchase you can make. You have proof positive there's a problem!

I'm about halfway through the process out in the Seattle area. Its a 90 day commitment "holding pattern" while the seller & banks work out the particulars. Everything is up in the air during that period & you've got earnest money tied up. The banks may come back & say no f'n way we'd sell at that price and we're out of luck.

The key is that both agents have to be on top of the deal, we get weekly updates on the banks progress (we're dealing with 3 banks on this house).

If it works out it will be worth it - we're looking at 3000 sq-ft house on one acre, 3+ car garage with shop, separate hot tub room, fruit trees, etc. Its dated (built in the 80s and shows) but literally at half price ;)

Kendall

I presently have 3 customers that are trying to buy a short sale. All 3 customers are well past the 90 day mark with no end in sight. 6 months is a more realistic number to plan for.

We've attempted to do loans for probably 45-50 people who were buying short sales, we've actually closed probably 6-7, all the rest give up and go elsewhere.

One of the 3 we're working on now probably will be able to close on his new home, or at least we're hearing noises that make us believe that within the next 30-45 days he'll be able to close.

Unless the current loan is with Wachovia who have a kick- ass short sale approval process, I agree that 6 months is much more likely decision time frame with no guarantee of sucess at the end. It can be worth the effort for the right deal though.

Tried buying one 2 years ago. Waited 4 months and finally got approved. Bank and owner said septic was fine and was inspected the 2 years prior. Bank waited till the day before closing before doing the title 5 inspection and the septic failed. Bank would not repair it or even go halves. They said we could submit a new offer but the shorts sale process would start all over so we walked.

I successfully bought one.

Mine was complicated. There were two loans out on the house: one with BoA and one with a small local lender. The listing clearly stated that the sellers were using an agent well versed in handling short sale negotiations. That was a pile of BS. Don't trust anyone!!!

The primary loan was through the local bank, and a small secondary was through BoA. The primary lender had never dealt with a short sale before, so they didn't know what they were doing. BoA actually was faster in coming to a decision. We waited from April to September of last year before we heard anything. If it wasn't for the $8,000 tax credit and the low price of the house, we would have walked away a few times when we had the opportunity. I don't know how many extensions we went through, but in the end we got it.

You need to ask yourself a few questions. One is if you want to wait for this house. Is it that much of a good deal? Is there anything better in that price range that's not a short sale? Can you handle being locked into a deal without a way out? It's tough sometimes.

In my situation, I got a house that needs a bit of work, but it was dirt cheap (cheaper than a decent apartment!!!) and I walked into equity as it is. When my renovations are complete, it will be worth a lot more than I paid.

Good luck with whatever you do.

There is only one bank involved and thats Citimortage, so that's good. I know the agent and she's suppose to be good, we'll find out. In my small town, most houses are old farm houses or overpriced double-wides. This one was built in 2001. We are renting right now, so no house to sell first. For a house like this in my area for the price, it would be hard to find.

SilverFleet wrote: You need to ask yourself a few questions. One is if you want to wait for this house. Is it that much of a good deal? Is there anything better in that price range that's not a short sale? Can you handle being locked into a deal without a way out? It's tough sometimes.

You hit a pretty important point here, especially given that there are (still) areas of the country where prices are falling. What might be a good deal now is not necessarily a good deal by the time the deal actually concludes.

Given that with most short sales and foreclosures, you'll inherit the PO's maintenance problems (hey, sounds like my cars...) I would expect them to be noticeably cheaper than a regular sale. Oh, and I'd also get the most detail oriented home inspector that you can find, not the normal drive-by type. Of course the good news is that apart from the deferred maintenance, if they PO had problems paying the mortgage they probably didn't have the money to indulge in hideous DIY "improvements" either...

Fletch1 wrote: There is only one bank involved and thats Citimortage, so that's good. I know the agent and she's suppose to be good, we'll find out. In my small town, most houses are old farm houses or overpriced double-wides. This one was built in 2001. We are renting right now, so no house to sell first. For a house like this in my area for the price, it would be hard to find.

One bank only isn't bad, but it also depends if they have more than one mortgage on the house.

I'd also like to point out that from what I hear, Citibank rivals BoA for competency when it comes to anything but taking money.

Obviously it's a relatively new house, how is the area both for comparable houses and price history?

In reply to BoxheadTim:

I live in a small farming community where not too many newer houses has been built. This road has a few nice/newer houses. There was a really nice one that sold recently two houses down. I've researched real estate in my area for two years now, its not a bad price at all. My wife and I don't want to live anywhere else and finding a setup like this around here is really hard. I'm trying not to get too excited.

OK, just checking that you've done the research .

I just hope it works out for you and you're getting completely frustrated by the run-around you're likely to get from Citi.

And just keep in mind there are exceptions to every rule. In a small farming community with few short sales things might just go swimmingly for you and you could be closed in 2 weeks. Keep your fingers crossed.