(Closed) Buying a short sale home?

posted 8 years ago in Home
Post # 3
Member
2054 posts
Buzzing bee
  • Wedding: March 2011

I didnt buy a short sale home but I have seen people who have and it is a long process…it can take a long time…for them it was 4 months to close! and it can be very frustrating from what i have heard..

Post # 5
Member
5399 posts
Bee Keeper
  • Wedding: November 1999

Our house was a short sale.  We got our offer accepted pretty quickly, but the actual closing process took about 3 months.  For us, though, it was worth it because we got a great house, for a great price in our ideal location.

Post # 6
Member
7431 posts
Busy Beekeeper
  • Wedding: October 2009

We put a bid in on a house on Dec 5 and are still waiting to get our offer accepted or a counter offer.  Its a short sale with Bank of America which I’m told takes the longest to get back to you.  It is a process but if you aren’t in a rush you can potentially get a great deal

Post # 7
Member
348 posts
Helper bee

If it’s a short sale, it matters a LOT whether the asking price is a number that has already been approved by the bank (which is sometimes true if another buyer already went through a lot of negotiation and then pulled out, or just if the seller is organized) or if it’s just a number that the current owner has picked.  In the Bay Area, you often see houses advertised with a price that the owner has chosen just to get a lot of people to look at it, but which is very unlikely to actually be accepted by the bank.  If the bank has approved the price, though, the process will go quicker (although I would imagine it will still be more complicated than a normal sale).

This may be obvious, but a short sale is not the same as a foreclosure, where the bank itself already owns the property and has agreed on the asking price (although foreclosures present difficulties of their own if you want to negotiate the price at all).

Post # 8
Member
3587 posts
Sugar bee

I just put in an offer on a short sale and hopefully I hear back soon. This is freaking me out reading these comments. My lease is up July 31st, so I have time.

My realtor was able to show me the house, no problem. Before I put in my offer, he did call the bank to see if that was the real asking price because he said just like the PP said, sometimes they say a price, just to get people in. I am looking at others just in case also.

Post # 9
Member
5498 posts
Bee Keeper
  • Wedding: September 2010

If it’s a “short” sale why does it take so long to close? I’m just curious.

Post # 10
Member
6009 posts
Bee Keeper
  • Wedding: May 2009

When we put in an offer on our house, it was a short sale.  It became a foreclosure about halfway through the short sale process, so about a month or so after we put in an offer.  Like pps said, it can be a lengthy process.  Before we put in an offer, another couple had been in the closing process with the same house for about 3 months (they ended up finding something else and backing out).  As long as you have some time, though, a short sale could save you a ton of money, especially if the bank is willing to accept a low offer or if it moves into foreclosure while they’re considering your offer.  🙂  And we had no problem getting a tour of the house while it was a short sale.  Good luck!

Post # 11
Member
6009 posts
Bee Keeper
  • Wedding: May 2009

Whoops!  Double post.

Post # 12
Member
1982 posts
Buzzing bee

@His–it takes a while because basically the bank is trying to find the best offer. It’s a step before foreclosure, sort of… you hand over the keys and payments to a buyer who will take over your payments (or something like that I believe).

Someone feel free to correct me.

Post # 13
Member
2007 posts
Buzzing bee
  • Wedding: September 2009

We’re in the process of buying a short sale house.  We put in an offer near the beginning of November and are on schedule to close the 26th so it will have taken us *knockonwood* just over 3 months.  

Getting the bank to approve the price definitely took the longest.  (Basically, the bank doesn’t own the house (yet) but it has to agree to lose money on the deal since the owner owes more money than they’ll be selling the house for.)  The other problem we’ve had with them is that they ordered the house to be winterized but the guy they hired didn’t do a good job and a couple pipes broke.  Because the bank is too much of a hassle to work with and we have less than 2 weeks until closing, we’re just having the pipes repaired ourselves and aren’t going to involve the bank.  It’s worth the $200 to us.  Oh, also the inspection turned up a few things that need to be fixed.  Normally we would ask the seller to repair them but we’ll pretty much be taking it as is.  Again, just paying for/doing it ourselves is worth not dealing with the bank.

Despite the set backs, it has been totally worth it to us so far.  It’s allowing us to buy a house that normally would have been well outside of our price range and really get a jump on our careers as homeowners.  

If you have the time, a short sale can be well worth it but oh my goodness will you learn patience!  Even my husband’s grandmother asked him “what pills he’s taking” (for patience she explained!)  

Post # 14
Member
236 posts
Helper bee
  • Wedding: July 2010

I bought a short sale – we put in the offer late December 2008 and purchased mid march 2009 – so that was about 3 months. If the docs were in to the bank before we had made an offer the process would have only been one month – that was when they finally stopped allowing offers to be made. Yes, it can be a long process – but well worth it in my opinion. Make sure your realtor puts an “any reason” clause so you can back out at any moment. Our theory was, put an offer on the short sale and we still looked around while waiting.

From what I understand the realtor can put whatever stinkin price they want on MLS – that 10k reduction was in hopes of starting a bidding war and to prove interest in the house to the bank rep so they don’t send it into foreclosure while it’s on the market and the owner isn’t making payments.

@cait – small world – the same thing happened to us, one pipe leaked and we ended up settling the situation between the two of us instead of involving the bank. We were already going to KILLZ the floors and install new carpet and they paid for the ceiling and pipe repair.

@His – The bank reps have to estimate if the neighborhood is going to recover and the home price would go up making the bank more money VS what tax deductions they make selling it at a loss (capital gains loss) VS cost of maintaining the home (paying realtor/HOA/taxes/etc). In my opinion, it takes so long because banks have the capital to sit on homes in good neighborhoods that they know will quickly bounce back in value, and the short sales that people want are typically in good neighborhoods, hence why you hear people complain about waiting a long time. A good example of this was a house we put an offer on, for 5k less than asking. It sat on the market for 7 months with no offers (this was while the stock market was still crashing so we were like the only people out there) but was gorgeous and needed little work. The bank was actually Fannie Mae. The FM rep wouldn’t budge that 5k and the comparable homes in the hood lead us to believe it wasn’t worth it. They accepted an offer for 2k less than we offered 2 months later – with no offers in between ours and the people who bought it. I know this because the week before we closed on our house our realtor called telling us the Fannie Mae rep would consider our offer again if we wanted to resubmit. My point is – Fannie Mae gambled that by their estimation they could make more money on the home by waiting. They lost.

Post # 15
Member
651 posts
Busy bee
  • Wedding: May 2012

I haven’t bought one, but my parents bought one as a vacation home.  They put an offer in on it in mid october.  Even though theirs was the only offer on the place, it was finally just accepted yesterday and closing is in march.

Post # 16
Member
2007 posts
Buzzing bee
  • Wedding: September 2009

@Sarah – That must be more common that I would have guessed.  My friend bought a short sale and the same thing happened to her too!  You would think someone would catch on!  Maybe there’s no way to really prevent it though.  My agent was telling me that the hardest thing on a house is for it to be vacant.  They’re much happier when they’re lived in.  

Oh, and we were the only offer on our place.  That really sucks they could hang around waiting for a better offer like that!  I’m glad it all worked out for you.  I still have my fingers crossed.  Maybe I’ll be able to breath easy once the well inspection is in…

The topic ‘Buying a short sale home?’ is closed to new replies.

Find Amazing Vendors