Short Sale...

Re: Short Sale...

• smerka member

  

  February 2014

  We tried in late 2007 when they first became a more common thing. Our real estate agent didn't have any experience with them. We put in an offer (what the house eventually sold for) and set a closing date about 45 days later. The previous owners had already moved out, the house was listed by a relocation company, we were buying with a 50% down payment and excellent credit, and it was about to be he holidays/winter. We figured it would be a slam dunk. The house had two mortgages. The first bank approved right away. The second mortgage bank sat on it. The respond date came and went. We were living with my inlaws and I started getting nervous. We went looking again. Found a house we liked better. It was also vacant and owned by the same relocation company. The closing date on the first house came and still no response from the bank. The next day we cancelled the first contract, and put a new offer in on the second house. The bank responded to our first offer the NEXT day, but by then it was too late. If you have the time to wait and find a house that has been taken care of, it can work out really well.

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• sillygoosegirl member

  

  February 2014 edited February 2014

  We purchased a short sale in 2013. It was a painful experience. We put in our offer in April and did not close until December 27th. I think we amended the contract with a new "close by" date 4 times. OTOH, we were having trouble finding a house we loved in the location we wanted, let alone for a price we were comfortable with. The nice thing about the short sale was that all that time while we waited for our offer to be approved by the bank, we were free to walk away from the house if something better came along. In all that time, nothing better did come along. We had a month-to-month agreement on our apartment, so fortunately we didn't have a deadline to move out. At closing, the house appraised for more than 10% above what we were paying for it, so we felt like we got a much better deal than we would have with a conventional sale. And above all, it was the best house we'd seen for our needs. I'm told most short sales don't take as long as ours did, but that part is just a crapshoot. Short does not refer to the time, lol.
  
  Our agent wrote into the contract that the sellers could not send any additional offers to the bank while our contract was active, and that we weren't bound by our offer until we had an amendment saying so, which would only be added if we still wanted the house when the bank finally got back to us. As I understand, that's pretty typical where I live, but not the norm in all areas.

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• Mom987 member

  

  March 2014

  My grandmother is a real estate agent and will not sell or even look at short sales. She sold us our home 3.5 years ago and I'm glad we didn't deal with it because of all the stories I've heard about them.

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• short+sassy member

  

  March 2014

  I've heard short sales on homes that have two mortgages are basically impossible to get.  Typically, the bank with the first mortgage gets all the money from the sale and the second bank will often get nothing or very little.  Hence, second banks will rarely sign off on a short sale.

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• shihtzu31 member

  

  March 2014

  Hi, I mostly lurk here but i love this board!
  
  I work for a real estate attorney and I'm in law school.
  Short sales do take some time, and 7 months is NOT uncommon. I've seen some get approved in 4 months and some over a year. Crazy.
  What state are you in?
  Personally, I'm not sure if I would buy one but if you love the house and you're able to wait until it gets approved, sometimes it can be worth it. It really all depends on how much the banks drag their feet and other factors like that.
  I personally don't think it makes that big of a difference as to 1 or 2 mortgages as some houses with 1 mortgage can take longer than others with 2. Make sure you find out how many liens are on the property and do your homework on the specific house before entering into a contract. Some banks will deny an offer even if it's fair just because the original mortgage amount is higher than the purchase price. It can be worth it at the end of the long wait of a short sale to find your dream home at a potentially lower price than if it were a conventional purchase. Message me if you have any questions! Good luck!

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• sillygoosegirl member

  

  March 2014

  short+sassy said:

  I've heard short sales on homes that have two mortgages are basically impossible to get.  Typically, the bank with the first mortgage gets all the money from the sale and the second bank will often get nothing or very little.  Hence, second banks will rarely sign off on a short sale.

  There were two mortgages on our house, and it did close eventually as a short sale. I think the 2nd bank got about $20K and forgave over $100K! Crazy! But they most likely would have gotten less foreclosuring...

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