Post # 1
Hi ladies –
So, I am in Germany right now for a couple more weeks. Today I call my landlord back in Puerto Rico to pay the rent as it’s due on the 17th and he informs me that the house we’ve been living at is now optioned and well into the process of a sale. I have to move by Oct. 17, which means I get to the island on Oct. 4, will be in the middle of a crazy schedule due to a big event on Oct 10 – 15 AND now I have to move. Alone and find a new place. Less than 6 months before our wedding. *breathe*
Ok, so I started looking on the online classifieds for rents like a mad woman. It’s not looking awesome but there are a few options in the area. We love it and would like to stay in the area. Now, here’s the thing. It crossed my mind to check how much are the properties selling for in that same place and I found a house, same model as the one we currently live in, house is in extremely good conditions (realtor confirmed and sent pictures) and the house is a very good deal. Really good price for the area. It’s a short sale.
Before I move any further, I wanted to ask around here if anyone has either sold or anyone has been on the buyer’s end of a property that’s a short sale. If there is anyone here with experience I would really REALLY appreciate any advice. What to look for, questions to ask, things to watch for. I know in the grand scheme of things this is not a real problem. But I am really stressed right now knowing I have to find a place, move out and coordinate all this (either rent or buying) and be fully immersed in a month of heavy work schedule AND plan the wedding, which by the way, I have to start now and all this, by myself. All I have for the wedding is the reception venue as FH had a very bad accident and that changed our focus to get him stabilized, get his surgery, medical appointments and just getting him healthy. So yeah, not a big problem but just a little extra stress after a very couple extra stressful months. On the bright side, if we could manage to close this property, we would be paying around $300 less per month than our actual rent for the very same house model but wayyy improved! And no one can tell us we need to move anymore! lol That’s a major plus
Post # 2
I bought my house as a short sale. I live in ohio and made a offer in May 2011 and found out at the end of July that it was accepted and closed at the end of August. Im not sure what questions you have but the only bad things with short sale is the wait and that banks can take a long time. I was in a tough situation because there were 2 offers on the table and since house was listed below the comparables I went in at asking price and asked for 3k towards closing. That was still 20k less than the appraisal. definitely don’t base things on pictures and make sure the offer is contingent upon financing, inspection and appraisal. Definitely get the home inspection it’s only a few hundred dollars. You can ask that the sale includes a home warranty. It’s not uncommon to see. I never used my home warranty so not sure if it’s worth it
Post # 3
Sara1923: oh thank you! I am willing to wait. Put everything in a storage unit and stay with friends or family or even rent a month to month furnished place in the meantime.
I was wondering if you can place offers. But you just answered my question. I think we just want to go with the asking price. I know the area really well and properties are selling for much more. This lady (owner) is just on a bad financial situation and can’t pay the home anymore so before a foreclosure they asked the bank for authorization for a short sale.
The only tricky part is that I am not there to see the house. I think I’ll send my niece and my mom and ask them to take lots of pictures and video for me.
I always check the market there and in the past month two properties were posted for just $10,000 less (foreclosures) and they were optioned within hours! I would love to buy this one if in good condition.
Thanks SO much for sharing your experience with me. I am unfamiliar with short sales and wasn’t sure if there were technicalities to be wary of. I already asked about the home owners association and maintenance fee and it is up to date. No debt and no tax debt either.
Post # 4
We dont own our home, but my friend recently went through this. Basically the term “short sale” is really misleading because it can take a really long time to process. Not to mention short sales are still having to work with their bank, and often times they will price low to get interest, but they wont actually accept their asking price to buy the house. The bank wants to recoup as much of their money as possible. My friend offered almost $20k over asking and their offer still was not accepted.
Basically though short answer is if you’re in a hurry, dont look at short sales.
Post # 5
a_day_at_the_fair: yeah. Not a speedy process by any means.
On the other hand, the realtor told me the bank already approved the amount they are advertising so it’s pretty much optioning and going straight for the pre approval with the bank for that amount. But honestly I have no idea. Of course then the whole approval can take time. I am happy to wait for such a good property. Crossing fingers
Post # 6
Sporty-Bee: Are you sure its a good property though? Has a home inspection been done?
Another problem with short sales is often maintenence and repairs havent been done by the home owner because they havent had the money. Or potentially if they had repairs done they could still owe for those repairs, which would become your debt if you buy the house. Thats an extra expense for you on top of the cost of the home
Post # 7
A short sale isn’t an indication of the length of time the transaction takes. A short sale means the bank is settling for an amount lower than what is owed to them.
Post # 8
I bought my home as a short sale. I had actually been renting it for two years prior to finding out that the landlord was heading towards losing the house and she decided to list it as a short sale. Well, I put in an offer on it in January and didn’t close until June 13. It look six months. So if you need to move quickly, I wouldn’t count on it.
Post # 9
Sporty-Bee: DH and I bough a short sale. It took 8 months from the time the initial offer was made until closing and we paid only $2k under asking, but we think we got a great deal and it was worth it for us. That is our experience, we were on a tight budget, so we were willing to wait to get a great price on a house. GL!
Post # 10
I have experience both from the buyer’s side and the seller’s.
My husband bought our current house (before we were engaged) in October, 2012. Before that, he had put in an offer on a different house that was a short sale. He put the offer in in early April. The bank really drug out that process. It was through Bank of America, and they’ve since been sanctioned for their processes with short sales. It took until about August or September for my husband and the bank to complete the negotiation process and approve the sale. Right when he was expecting to get ready for closing, the bank assigned his account to someone else and started the whole process over again. It had been 6 months already at that point. He was so mad that he found and made an offer on our current house, which wasn’t a short sale.
Now, we are in the process of short selling my old townhouse. We went under contract in early July and are still waiting for approval from the second bank. The first bank approved things in late August, but I have 2 mortgages, and the second bank is taking longer. I’m hoping to be able to close in October, but there are no guarantees at this point.
So, the biggest thing about a short sale is that you are at the mercy of the bank. And some banks are better to work with than others. You have to plan on the whole process taking at least 6 months. If you’re lucky, it might be a little less.
The other thing about a short sale is that because you’re going through the bank, the seller isn’t going to make any repairs. They are sold as-is. So it’s really, really important for you to get an inspection and know what you’re getting into.
Let me know if you have any other questions.
Post # 11
- Wedding: December 2014 - Norton Country Club
FI just had to undergo a short sale (as a seller) to move for work. The entire process took 8 months, despite being a well-priced property in a desirable area. It seemed that the realtors showing the place were not up for the amount of work involved in a short sale (the eventual buyer said she had 3 realtors show her the home but only one willing to pursue an offer lower than the initial listing) and the bank was not cooperative at times. Once we had an offer in, it took 4 months from submission to the bank to approval. Now, 8 months after the offer, we are still fighting the bank to remove FI’s name from all of the documentation on the home. I’d recommend having a good realtor- one who is aggressive enough to keep up on calling the bank. Hope that hleps!
Post # 12
Our house was a short sale (in Virginia). We put an offer in mid-February and close early May. The big things to take into consideration when dealing with a short sale are:
1. Time. Since you are dealing with a bank (or two or three) it can take a long time. Maybe the banks are different where you are, but, from my understanding, the banks don’t pre-approve a sale price. The owner sets the price, accepts an offer, then submits the offer with a letter stating why they need a short sale. So the bank not only has to approve the price, but must also give permission for the owner to do a short sale. There is no pre-approving of anything. And this happens Every. Single. Time. the owner accepts an offer. So if the owner had previous offer accepted on the house that fell through, they still have to go through the same short sale application process with the bank for the next offer. Now this could be different in PR, so I’d just double check that your realtor is correct in stating that they have already been approved to short-sale at that price. Because the other thing that could happen is the owner lists one price, but the banks will say it’s too low and not accept the offer. This actually almost happened to us.
Also, if the owner has ever refinanced or taken out a second mortage with a different bank, that other bank will also have to approve the short sale and the offer. So that is another road block to watch out for.
2. Maintainance. Usually short sales are in need of work – which makes sense because if the owner can’t pay the mortgage, then they also can’t afford to fix the AC or leaky roof. So definitely get an inspection (make that a condition for closing) and make sure you have some liquid cash set aside to take care of any reparis.
3. Low chance of getting any concessions. We were able to get $5K in closing costs from the bank, but I wouldn’t necessariliy count on it. Or getting any concessions if the home inspection comes up poorly. The owner doesn’t have any money and I wouldn’t expect the bank to give you money to fix a broken pipe or pay for a new water heater.
4. Super fast closing. I’m not sure how often this happens in normal sales, but once the bank accepted our offer, they told us we only had 2 weeks to close. The problem? Most banks and credit unions require 4 weeks to get your loan approved and paperwork complete. We had to go with a private mortgage compnay for our mortgage instead of my preferred credit union. We also only had 2 weeks to update insurance, get our home inspection, and the other misc. paper work. It’s obviously doable, but just something to be aware of.
Post # 13
a_day_at_the_fair: I managed to get my friend to go visit, take pictures and the realtor said thy can also take video. She’ll go with a friend of hers who is a contractor and is a certified home inspector. They’ll go this weekend.
Apparently there had been a previous transaction in where the clients were not able to close in the end and the bank approved a sale for that amount they are offering now. I mean, sure the bank can say no we want more $ now, but the realtor feels confident they’ll approve for that amount. We’ll see how it all pans out. As exciting as the idea can be, I am trying to go after it with a clear mind, looking at the facts and not based on emotion. Which is hard when you need to move, want to stay in the same place and find this stuff!!! lol
Post # 14
MouthOfTheSouth: Spinwife: Krispi: wvlefty: RunsWithBears: and everyone else…My God ladies thanks for all the details and info! Gotta love the Bee 🙂
Long story a little less long. This is a property in a gated community, resort style. This house is in the center of the community, which means it was built in 2005. So it’s less that 10 years old. I know everything about the community because in 2002, I was one of the first home owners there with my first boyfriend. At that time, there was only one street and 10 houses hehe. It took aprox 2 years to get to the mid section of the project and build all the facilities. When we split, things got ugly and I left, he kept the house. I am SO incredibly happy I did not keep it. At the time I would have had to take a loan three times the amount we would be buying at right now if we manage! I absolutely love the community and the area. Great daycares, elementary and intermediate school at walking distance! Not that I have kids but we plan to TTC in the next years after our wedding. SOoo yeah 🙂
I spoke to realtor today. My best friend is going to go see the property and take pictures. Realtor said she can take video so I can see everything more clear. My friend will go with a home inspector friend of hers. If all is good, we’ll make a move and option the house.
On the conversation with realtor, i asked many questions, some of where ideas I got from this thread. And I asked if there was any chance of us renting the house to the lady once we option and move into the whole process. She said the owner is willing to if we are erious and we are pre approved and everything is looking good. We talked about the rent fee and it’s reasonable. This would be awesome.
Now crossing my fingers, ladies. All I hope for is that whatever happens, it’s the best outcome for us and also the lady can breathe knowing she doesn’t have that huge weight on her shoulders. All I hope for is a win win situation. *hope*
Post # 15
I bought a short sale condo. There was nothing wrong with the unit itself, but it took forever for the paperwork to go through. I put my offer in during the month of August and we didn’t close until January. My realtor and I did all of our paperwork on time, the seller did everything she needed to do, but the bank took forever. Granted this was in 2008/9 when there were a lot of short sales/foreclosures.