Does anyone on here have any advice or experience with short sales? I have heard mixed opinions on them. One realtor told me that they can take months and the bank usually wants market value, so you won't get a great deal. I have been keeping my eye on the market, but I am not in a rush. I already own a home that I plan to rent out if I purchase a new home, so I have the time to wait it out. I just wanted to know if it is worth considering or not because it seems like most of the houses that I find that I am interested in are short sales. Any advice is appreciated.
Short Sales
- Thread starter 3labs
- Start date
BadGirl
I am so very blessed
Don't do it.
I recently closed on a house in November, after putting in the original contract nine months beforehand. When I submitted my offer, the house had already been approved for short-sale.
The end result: it cost me much more than originally planned, the approving banks were a summabiatch to work with, and the "deal" that I thought I was getting, wasn't as much of a great deal in the final analysis. Granted, I still got the house that I wanted, in the area that I wanted, for a decent price (but not the *great* price that was originally advertised), but the process was extremely frustrating and brought me to tears on more than one occassion.
I recently closed on a house in November, after putting in the original contract nine months beforehand. When I submitted my offer, the house had already been approved for short-sale.
The end result: it cost me much more than originally planned, the approving banks were a summabiatch to work with, and the "deal" that I thought I was getting, wasn't as much of a great deal in the final analysis. Granted, I still got the house that I wanted, in the area that I wanted, for a decent price (but not the *great* price that was originally advertised), but the process was extremely frustrating and brought me to tears on more than one occassion.
Annoying_Boy
New Member
Cash talks.
It doesn't take months with cash.
The bank doesn't want to deal with buyers that require financing that would require them to make sure the house meets certain standards.
Example: you can't sell a moldy house to an FHA or VA buyer. But you can buy it for cash for little more than the land value.
That's why investors always beat out the nice guy.
kwillia
n/a
It makes absolutely no sense you had to go thru what you went thru. I have a co-worker who's daughter placed the winning bid on a forclosure auction house back in October. She figured she'd be in the house by the end of December. Here we are the end of January and she is several promises of a closing date later and still has no clue when it will actually be hers.
Annoying_Boy
New Member
Of course there's also the problem that real estate agents will sometimes make sure the offer that gives them the best commission is the one the bank sees, and never even present other offers.
red_explorer
Well-Known Member
street
We have a house on our street that's been auctioned off twice now, in the last 6 months...never got more than $175k either time. It was a $600K house originally....the buyers keep falling through.
We have a house on our street that's been auctioned off twice now, in the last 6 months...never got more than $175k either time. It was a $600K house originally....the buyers keep falling through.
kwillia
n/a
From what I am hearing from co-worker from week-to-week, I'm willing to bet it's moreso the buyers getting tired of the endless and futile hoop jumps and they just plain walk away.
The house I'm talking about is in Calvert.
Chasey_Lane
Salt Life
Keep in mind FHA recently changed their guidelines regarding rental property income. Before, all you needed was a signed lease. Now, you need 12 months of rental income in order for it to count. Meaning, if you plan to rent your current home while purchasing another, you must qualify for both mortgages.
Larry Gude
Strung Out
Short sale-dom is a NIGHTMARE.
We had a deal in HAND a year ago and were willing to take back the balance, a personal note of about $50k, and they, WELLS FARGO dicked around and dicked around and dicked around for over 120 days until the buyers finally threw up their hands and walked.
I've talked to several people who specialize in short sales and they say the same thing; it's the wild, wild west. Policy and procedures and how to handle this have been left to the winds and there is one and only one reason for this;
TARP.
Absent TARP, banks would have long ago set up procedures and figured out how to deal with this. With TARP they had ZERO reason to do so.
We had a deal in HAND a year ago and were willing to take back the balance, a personal note of about $50k, and they, WELLS FARGO dicked around and dicked around and dicked around for over 120 days until the buyers finally threw up their hands and walked.
I've talked to several people who specialize in short sales and they say the same thing; it's the wild, wild west. Policy and procedures and how to handle this have been left to the winds and there is one and only one reason for this;
TARP.
Absent TARP, banks would have long ago set up procedures and figured out how to deal with this. With TARP they had ZERO reason to do so.
glhs837
Power with Control
From my research, short sales are really a joke. Seems the process, like Larry said, is not standardized, and your odds of hitting a pinata in an otherwise empty Astrodome are better than finding a bank that does more than wait months, then spin the "Great Wheel O'Realty" which has 50 spaces for waiting, 3 for stupid hoops, and one for actually moving ahead in the process. You would be better served waiting for the property to go foreclosure.
One I had my eye on, it was listed as a short sale for over a year, nothing happened. It hit foreclosure at 40K or so less than than the short sale price, and an offer was accepted within three days, closing was going to happen within two weeks from acceptance.
One I had my eye on, it was listed as a short sale for over a year, nothing happened. It hit foreclosure at 40K or so less than than the short sale price, and an offer was accepted within three days, closing was going to happen within two weeks from acceptance.
Thanks for all the feedback! I think I'll stay away from the shortsales. It doesn't make sense though. You would think the bank would lose a lot more money foreclosing on the house rather than selling it.
Badgirl- I'm glad you were able to finally get your house! Nine months is a crazy long time, but I hope it was worth it. You would think they would be giving the houses away after expecting people to wait around that long...
Badgirl- I'm glad you were able to finally get your house! Nine months is a crazy long time, but I hope it was worth it. You would think they would be giving the houses away after expecting people to wait around that long...
Annoying_Boy
New Member
If the loan was insured against foreclosure with PMI, or an FHA or VA loan guarantee, the bank loses nothing by foreclosing. The insurance payout triggers.
As for many of the conventional loans, the original bank that made the loan no longer owns the loan; it was bundled up, securitized, and sold to someone's pension plan.
itsbob
I bowl overhand
If the loan was insured against foreclosure with PMI, or an FHA or VA loan guarantee, the bank loses nothing by foreclosing. The insurance payout triggers.
As for many of the conventional loans, the original bank that made the loan no longer owns the loan; it was bundled up, securitized, and sold to someone's pension plan.
Interesting. My understanding of the VA is they don't, and have never, insured entire mortgages.
They would insure what would be considered a downpayment amount so at the MOST 20% of your mortgage would be "VA Insured" so if you are talking foreclosures where the house goes for <40% of owed value than they are losing MORE than if they shortsold it for 70% of the owed value.
Annoying_Boy
New Member
You're correct, but the amount of house you can buy via VA has rose substantially during the bubble years.
"The maximum VA loan guarantee varies by county. As of 1 January 2011, the maximum VA loan amount with no down payment is usually $417,000, although this amount may rise to as much as $1,094,625 in certain specified "high-cost counties".[1] VA also allows the seller to pay all of the veteran's closing costs as long as the costs do not exceed 6% of the sales price of the home."
"Your basic entitlement is $36,000. For loans in excess of $144,000 to purchase or construct a home, additional entitlement up to an amount equal to 25 percent of the VA county loan limit for a single family home may be available."
VA loan - Wikipedia, the free encyclopedia
So it looks like the answer on VA is the banks have 25% to play with.
Pre-Loan Frequently Asked Questions - Home Loan Links
Annoying_Boy
New Member
"An FHA loan is a loan insured against default by the FHA. In other words, the FHA guarantees that a lender won’t have to write off a loan if the borrower defaults – the FHA will pay. Because of this guarantee, lenders are willing to make large mortgage loans."
FHA Loans - Pros and Cons of FHA Loans
foodcritic
New Member
That is a HUGE depreciation.
Short sales are a PITA for everyone on the buying side IMO, be prepared to wait.
I waited 7 months from the time I signed a contract until I moved in. The bank took 3 months to approve the short sale and then the seller filed bankruptcy. I am sure he was being advised on his side to do this - because it was within days of the bank's approval that it happened. And once he did - the bankruptcy court had the time line and we had to wait for them to do their thing before we could.
The RE Agency said they couldn't (wouldn't) let me rent the house while waiting on it (it was empty and clean). I had to go to a lot of expense of moving twice, living in a smaller place, (and storing most of my furniture/belongings) taking one kid to and from school every day to stay in his district (because I had to rent a temp. place & it was JUST over the district line) for SEVEN months!
It was an ungawdly huge amount of stress, and I, like badgirl, was in tears on more than one occasion over the whole thing.
In the end, I got the house, and I did also qualify for the first time homebuyer's credit. But it was a huge PITA and I wouldn't do it again if it meant I had to go through all the crap again.
I waited 7 months from the time I signed a contract until I moved in. The bank took 3 months to approve the short sale and then the seller filed bankruptcy. I am sure he was being advised on his side to do this - because it was within days of the bank's approval that it happened. And once he did - the bankruptcy court had the time line and we had to wait for them to do their thing before we could.
The RE Agency said they couldn't (wouldn't) let me rent the house while waiting on it (it was empty and clean). I had to go to a lot of expense of moving twice, living in a smaller place, (and storing most of my furniture/belongings) taking one kid to and from school every day to stay in his district (because I had to rent a temp. place & it was JUST over the district line) for SEVEN months!
It was an ungawdly huge amount of stress, and I, like badgirl, was in tears on more than one occasion over the whole thing.
In the end, I got the house, and I did also qualify for the first time homebuyer's credit. But it was a huge PITA and I wouldn't do it again if it meant I had to go through all the crap again.
twinoaks207
Having Fun!
That is when the realtor gets reported to the Real Estate Commission and possibly loses their license.Of course there's also the problem that real estate agents will sometimes make sure the offer that gives them the best commission is the one the bank sees, and never even present other offers.
Annoying_Boy
New Member
Give me a break.
That's a load of crap, to put it nicely.
Have you ever viewed the disciplinary action page for real estate agents on the state's website?
Have you read some of the stories about Maryland real estate agents that have went to jail for fraud? They're not even on the page; they just simply and quietly revoke their license.
Go view it and get back with me.
