Anyone purchased a short sale?

jmbernadette · October 2011

Just posted this on Money Matters but I think it probably belongs over here. My husband and I are looking to rent out our current house and purchase a second home and are entertaining the idea of a short sale. From what I've heard, they're virtually impossible to deal with - everything from last minute deals that fall through to banks that won't return phone calls.Our first task is to find a realtor that specialized in short sales but outside of that, has anyone successfully purchased a short sale? What's the secret? We're in Minnesota.

Sara&Jeremy · October 2011

Yes, and it was not a fun process but completely worth it in the end. My only advice is go in with eyes wide open (the process can take anywhere from 2-8 months) and try to find a short sale that has been previously approved. Also, I have heard it is best to avoid buying a SS through Bank of America, they are notorious for being awful. Also, avoid a short sale where the seller has more than one mortgage holder...it complicates things a lot. Our short sale that we bought was through Chase who were very good and they were the sole mortgage holder. Thankfully it had been previously approved and the deal fell though for some reason and it was relisted shortly before we put in our offer. We heard back within 2 weeks of submitting our offer and would have been able to close pretty quickly if it weren't for complications with financing on our end. I have heard a larger percentage of short sale deals don't complete, but I have also heard that banks are supposed to be getting better at handling them, so who knows. Good luck!

curlylocks3 · October 2011

We did. I don't think there is any great secret- IMO a lot of it depends on the bank that is involved and how motivated they are. It takes a TON of patience, and you cannot get set on one single property due to the high possibility of the sale falling through. Definitely agree though on finding a REA specializing in this- there is lots of extra paperwork, a tight timeline, often less room for negotiation than a conventional sale. Scroll through this board, you will find lots of posts asking about various steps of short sales, questions about the process, and a lot of vents about the frustration.

MoFree · October 2011

We are in the process of purchasing a short sale and so far it has been a very easy process. A previous SS had fallen through and both the seller and bank were very eager for the sale to take place and our full price offer (almost 1/2 of what the sellers paid in 2007) was approved in the same timeline as a conventional table. We are set to close in a week and so far there have been no unexpected delays. I realize our experience may not be typical, but a SS can be an easy transaction.

honey&badger · October 2011

curlylocks3:
Definitely agree though on finding a REA specializing in this- there is lots of extra paperwork, a tight timeline, often less room for negotiation than a conventional sale. .

I think my biggest advice would be to be aware of this-- I don't know if it's true for all SS, but for ours, we (buyers) paid for all of the inspections, etc. And then when they turned up problems (see termite post below), we were on the hook for paying for them because the seller is broke and the bank won't budge.

We walked away from ours, but I don't think I necessarily would avoid one in the future---I think I'd just aim for ones where the inspections have already been done...

Anyone purchased a short sale?

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