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Buying a short sale house... how long is this going to take!? Experienced short sale buyers come in
I am beginning to get twitchy about how long this darn process is taking.
We put our offer in over a month ago now. 5 weeks ago, and the sellers accepted our offer then. Their real estate agent has relayed the information that they are 100% cooperative and want this sale to close quickly. They are a military family and are relocating, and the housing values have dropped since they bought a few years ago.
I was told the next step we are waiting on is for the bank of accept our offer or reject our offer and counter-offer. But right now, we have no idea! From what I understand, the bank has to 1st get all of their hardship paperwork (which I am told the bank already has), then the bank has to get an appraisal of the house as well as comparables to see if our offer is a reasonable one or not, and then from there things may possibly move very quickly.
This whole thing has us very much in limbo right now and I HATE it! I can't stand not knowing whether the bank is going to accept our offer or is going to want us to pay more... or what-have-you. I can't stand this. Our current house is under contract and the people buying our house are being VERY patient and reasonable. We have a tentative close date for both houses at the END of JUNE (which I can't stand!!! I'd much rather close in May or beginning of June at the latest!!)
Our realtor told us to give them a close date of "on or before" June 30th in our initial offer so that the sellers see we are willing to work with the slower time. I told him then that I don't want to wait THAT long but he said "if the sellers are as motivated as their realtor says they are, it probably won't take that long.... the bank they have the loan with is fairly efficient with getting things moving..." So we agreed to "on or before" June 30th. And our buyers are willing to deal with that time frame since 15k of our agreed price had to be shaved off due to a low appraisal.. but the sooner we can close, the better.
I'm just going out of my mind insane with this complete limbo status. Several people have told me that even with a motivated seller it will probably take longer than the end of June, could be into July, August, or beyond. I'm going crazy about this.
My realtor told us last week that a negotiator has been appointed but no word on any appraisals yet.
Anyway I would love to hear other peoples short-sale stories, whether it has a happy ending or not!
Such an aggravating process so far.... ugh.
Re: Buying a short sale house... how long is this going to take!? Experienced short sale buyers come in
My mom just purchased a short sale several months ago. It took approximately 4 months to hear back from the bank, once everything was approved and submitted by the sellers. From start to finish, it was about 6 months total, and all agents felt like it moved fairly quickly. They were only dealing with one loan at one bank.
We've had friends in various stages of short sales and it hasn't been so smooth. One took several months to hear back from the first bank, which approved, and other few months to hear back from the second. The second refused to accept, probably based on how much money (if any) they would get from the sale.
Most people that I know that have ended up with a successful short sale didn't count on it as their only option. My mom put her offer in very early in her search and continued to look and submit other offers for several months. If you're counting on this as your #1 option, I would resolve to being in limbo for several months, at least. Otherwise, keep looking around and maybe it will take your mind off of the time. You may find another house you like better, or you may cement your love of this house. Either way, you win.
Your agent should have prepared you better before you put the offer down. Our short sale took three months to close, and that is QUICK, considering it was a short sale and all. Our agent told us a wait of six months - at least - was normal.
Let me tell you, the anxiety doesn't stop at the bank(s) approving the offer. You've got to do the inspection too, which could bring up issues you'd need to negotiate if things need fixing. That's one thing I hadn't even thought of prior to putting our offer down. There are a lot of hurdles that come up along the way and it gets stressful. Heck, we are signing our papers tomorrow and I am STILL stressed out.
If you are patient, it could turn out to be a good deal.
Unless the paperwork, price, etc. had already been approved, short sales can take months. There isn't a "set time" since each situation is different. We looked at one---and ultimately walked away (thank goodess). The first potential buyer had waited 8 months for a response from the bank before walking away. We looked at another one that is still on the market because the second lien holder will not agree). We have friends who are on their 5th month of waiting.
When we were looking, our realtor shared with us that the average "wait time" in our area was 6-8 months (with some exceptions). Short sales are not typical sales and I'm sorry that your realtor did not educate you better on the process.
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Agree with others, you REA should really have explained and prepared you for a long process. Most short sales take months to close and only about 20% of short sales actually make it to closing, so I would come up with a plan B just in case this short sale deal falls apart.
The sellers really have no control over the process. It is all up to the banks and they really don't care about them or you. Sorry, but you need to have a lot of patience when dealing with SS. If you not willing to do that and getting twitchy, crazy and all stressed out, then you need to decide if the house is really worth it.
GL hope all works out.
I agree with everyone else. Nothing short about a short sale sadly.
Dh's cousin and his soon to be wife placed an offer on a short sale many months ago (I think late January, so we are fast approaching 4 months). We were also looking for a house at the same time. In the amount of time they have been waiting to hear, we found a house, made an offer and our under contract. Our house is a new construction and DH and I have privately joked we will probably be able to build a house and move in before they get to close. We are set to close on July 6.
It took them only a few days to hear from the seller but then it was waiting on the bank. They finally heard from the bank after about 2 months but then come to find out the house had a 2nd mortgage and they have to wait to hear from that bank now too.
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I feel you. We've been waiting for 6 weeks now. The bank ordered the BPO 4 weeks ago, and we were told by the bank that a decision can be expected by the end of April. This is consistent with what our Realtor told us to expect with this bank, so we are staying calm and letting things run their course. But our contract is set to expire on May 2 if the bank does not respond. As we move closer to that day we are beginning to formulate plan B. We must be into our new house by mid-August, and prefer to be moved by the end of June. So if the bank is not going to work on our timeline, we need to find another house to buy.
Do you know if the seller's bank has ordered your BPO to even get the review process started? Has the bank requested updated financials from the sellers? Basically, has the bank shown any signs of progress?
Here is what we know on the financial side of things:
They bought in 2009 for 252k.
They only have 1 lender, a known bank. Our realtor claims that as far as short sales go, this bank is fairly efficient with them.
They sellers a military family (not sure that makes any difference at all, just throwing that out there) and are being reassigned to a different area, set to take place in July. They want this done and over with well before that.
Prices in the area, like most areas in FL, continued to depreciate since 2009. They initially listed in January at 235k. Then lowered to 224k in February. We put our offer in at the beginning of March, offering 214k based on some comps in the area.
Just putting guesswork into this: We believe they either put 5% down or 3% down. If they initially put 5% down on 252k, then that means their mortgage would have been 239,400... so starting at 235k is a short sale, but not by much.
If they put only 3% down...then their original mortgage was 244,440 (I believe this is probably the more likely scenario since they announced this was a short-sale listing from the beginning).
Going on apples-to-apples comparisons (same bed, bath, general location, square footage within 200sq. ft, with a pool)... 7 properties sold within the last 3 months (we used the 3 month method because that's what the appraiser for our buyers did with our current home). That average is $222,100.
If you go based on a price per square foot, the average ends up being 214k.
If you go based on what has sold in that particular neighborhood in the last few months, we have 2 apples-to-apples comparisons that sold for 199k and 176k within 2 months.
Anyway, with that said:
We know the appraisal will not come back much higher than anticipated (unless they use some serious off-the-wall equations and factors... because we've considered it ALL).
We know that this short sale is not as bad as some others out there (multiple lienholders, or someone so upside-down in their mortgage that the bank would be losing well over 50k).
Now whether any of this will help us at all (or the time this all will take)... I don't know.
But it sucks to hear of these long wait times. I love this house.. it is the house for us and I can picture this being our house for a long time to come. I just wish we had more stability (and speed) with this entire process.
~L~
Mommy to 2 boys, ages 7 and 5 and a little girl who is 1.5
And an update from our realtor today:
All required docs have been provided by the seller (we assume this means the appraisal as well, since that was the next step the last time we were updated), and the file has been moved to the banks main office that reviews and deals with VA loans (which I'm assuming is the type of loan they have). Our realtor then writes "hopefully we will see some action now. The seller is being very active in pushing the bank and title company to bring a quick resolution to this."
I'll keep praying that we can close by the beginning of June. But based on what you've all told me... I also won't be holding my breath!
~L~
Mommy to 2 boys, ages 7 and 5 and a little girl who is 1.5
It's good that you have an active seller. I would assume a lot of sellers in this situation has simple washed their hands of the property and are doing nothing to help the situation. Best of luck!
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We offered on a short sale in Aug one year, the first closing date came and went without anything from the bank, second contract in place, and again nothing at the closing date, in Feb. Complicating all of this was the fact that the sellers' agent was uncooperative, unresponsive, and just hands-down shady.
We backed off from the whole process at that point since we were both OOT a lot for work and getting ready for our wedding. Our lease was month-to-month by then, so we weren't in a hurry. Meanwhile the house sat empty, and was eventually foreclosed on. It came back onto the market in May, we offered again (with a $40K price drop), bank tentatively accepted, closing date arrived and they hadn't completed their paper work. We finally closed at the end of July, nearly a year later, after four contracts.
Short sales, at least in 2008, were ridiculously slow. I think attempts have been made to improve the process, but it's still frustratingly slow. Buying the house as a foreclosure was much more straightforward, though still not a quick deal