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Torn on what to do
We love a house in the neighborhood we've been wanting. It is at the top of what we wanted to spend. It is a regular sale, great finishes inside, great schools. Just needs a fence on one side for our dog, but otherwise ready to move in.
In the same neighborhood there is the same house layout for a short sale listed for $30K less than house #1 at this point. The house layout is exactly the same and the kitchen isn't as nice as far as the finishes, but obviously that can be changed. There is already a fence, but the yard is probably half the size of house #1. And it is a short sale.
We can't decide if we deal with a short sale and possibly lose house #1 or just go for it and have the giant mortgage of house #2.
Any thoughts to share? I know half of all short sales never go through so I'm nervous to deal with a short sale and the extended timeline of it. The good news is that we own a condo so we aren't in a time crunch to move. Are short sales a crazy pain in the a**? Is the $30K extra (pending negotiating the asking price a little lower) worth it for a regular sale, bigger yard and some nicer finishes?
Re: Torn on what to do
The mortgage isn't that giant - it just seems giant compared to our condo mortgage, but we know we can handle it. But $140 a month is $140 so weighing if that savings is worth the short sale attempt.
Growing Up Olson
It is stated in the listing that yes they are pre-approved for short sale. And we also know that they have two loans through Bank of America. So at least it's the same bank, but well it's Bank of America which is known to be rough to deal with for short sales.
Growing Up Olson
We offered on a SS the second week in October and got the approval last week, so for us, it was not a long process. We close Dec 29.
A few things to think about-a 30k difference won't be that much of a huge jump in the mortgage.
The bigger yard would be a nice positive for me.
With a traditional sale, if issues come up at inspection, I would think you'd have more negotiating power with the seller-generally SS's are in as-is condition, so you need to be prepared to bring the money to fix anything that might need help.
For us, the houses that have sold in the past year that are the same as ours, but were traditional sales sold for anywhere between 40k more to 99,500 more (sold in july) than we are getting ours for, so it seems worth it to us. Some of the homes had better looking kitchens or sunroom additions, which ous does not, but that is something we could do in the future. There are many things the house needs: a new double garage door (the one in there now is rotting and a safety hazard), the second full bathroom is going to be gutted, needs a new driveway put down and needs some grading work to be done. Those are the big things we have to do/get done, in addition to lots of little things that need to be done, and things that would be good to do (put more insulation in attic which is easy, but not cheap). Because the house is being sold as-is, the things that have to get done will be paid for by us-in a traditional sale we could have likely negotiated some of these. For us we feel like we'd rather pay less for the house and do this work ourselves but it will take time to get it where we want it.
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for only 30k more, i'd do house #1 for sure. unlike PP, it's way more worth it for us to have a house in move-in condition. we, and most people, don't want to do the work ourselves and don't have the patience and tolerance for it. also, mh is very risk-averse, so i know he'd have a lot more peace of mind and would be ok with paying a little extra.
30k here is not a lot as we're in HCOL, which is why i'm saying i'd definitely do #1. i understand it's a much bigger jump if your area's houses are cheaper.
We don't have to sell our condo - we will be renting it as selling it would incurr a huge loss at this point. So we are approved to rent it and purchase another home.
Growing Up Olson
So true - we are far from handy and are leaning more towards house #1. DH works a lot and well me doing things with a two year old is not easy!
Growing Up Olson
Gotcha. It just wasn't clear from your post. In this case I would go for #1. We bought a fixer upper (wayyyyy more than just a kitchen) and there's no way I could do it with kids. DH also works long hours so it's hard to do projects and I can't and won't really do much on my own. We're trying to get projects planned and wrapped up before this kid gets here so we can relax a little! Go for #1 and you can get renters in quickly as you should know approx how long it will take to close.
Yes short sales are a pain. I have been doing them for the past 6 or so years. Some go much smoother and easier than others it depends on the lender and whether or not the list price has already been approved.
Some lenders will not approve a price until they have an offer and the smaller lenders usually do things a little differently and are more motivated to complete the sale.
Are you working with an agent? What did they say? Being in the business for the past 9 years I have found that once you have worked with a buyer for a few months you get a really good feel for what they actually want.
Some buyers say they don't mind fixing the place up a little for a better deal and end up buying the best looking and most expensive house on the block. Others tell you they want a perfect move in condition type home and then decide the ultimate savings is worth spending time and money fixing it up.
The key to a happy short sale buyer is to have no expectations, pretty much put in the offer and then put it on the back burner. It can take months depending on the lender but your agent may be able to get some helpful information with regards to time lines for a particular lender/offer. Don't get excited until you have approval from the lender!!!
There is so much to consider your really should talk to a Realtor in your area if you aren't already. Realtor services are usually very affordable for the buyer (the seller pays the commission) so it will likely only cost an extra couple hundred dollars if the broker charges an admistration fee. Chances are if you ask they will waive that fee and it will be totally free to you (as long as it is listed with agent compensation or the agent has talked to the seller of a for sale by owner and they agreed to pay in the event the agent can find an acceptable buyer and produce an offer accepted by the seller).