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First time home buyer: Looking at a short sale house, any advice?
Posted on 10/25/10 at 12:31 pm
Posted on 10/25/10 at 12:31 pm
So my wife and I have been renting while she has been in grad school up here in Knoxville. While she didn't have a fulltime job we decided it was best to rent since we could have potentially moved anywhere in the country after graduation. She graduated in May and has just started a good job, so we will be settling here for the foreseeable future.
Anyway, we've been house shopping for a little over a month and are close to putting in an offer on a house that is on short sale. Are there any pitfalls or common practices that anyone here has any experience with? For example, one of the things we've been told is to make our offer contingent on the owner not removing anything else from the house after our offer is submitted. They've already removed a deck cover and some ceiling fans, but those aren't a big deal. However, we've heard of people removing their counter tops and appliances so we want to make sure that doesn't happen to us.
Thanks for any advice.
Anyway, we've been house shopping for a little over a month and are close to putting in an offer on a house that is on short sale. Are there any pitfalls or common practices that anyone here has any experience with? For example, one of the things we've been told is to make our offer contingent on the owner not removing anything else from the house after our offer is submitted. They've already removed a deck cover and some ceiling fans, but those aren't a big deal. However, we've heard of people removing their counter tops and appliances so we want to make sure that doesn't happen to us.
Thanks for any advice.
2
Posted on 10/25/10 at 12:39 pm to TigerNutwhack
1)be prepared to wait a long time
2)don't get emotionally wed to any one place
3)aged short sales are your best bet to get a good "deal". So if you can identify a lot of them, put in low balls on a bunch, and if you're a little lucky, one will hit your bid.
4)Get yourself a competent agent who actually understands the process from the point of view of all 3 parties: you, the seller and the bank. This will probably be VERY hard to do, so be selective. The majority of "short sale" agents, don't know their arse from a hole in the ground.
I'll try to think of more.
2)don't get emotionally wed to any one place
3)aged short sales are your best bet to get a good "deal". So if you can identify a lot of them, put in low balls on a bunch, and if you're a little lucky, one will hit your bid.
4)Get yourself a competent agent who actually understands the process from the point of view of all 3 parties: you, the seller and the bank. This will probably be VERY hard to do, so be selective. The majority of "short sale" agents, don't know their arse from a hole in the ground.
I'll try to think of more.
Posted on 10/25/10 at 12:42 pm to TigerNutwhack
A couple of points -
Ask your realtor what bank(s) is/are involved. Some banks handle these things in an efficient manner and you can get an answer within 2 months. Some are f'ing terrible. They always come back wanting MUCH more (often much more than the house could ever appraise for) and never seem to close one damn short sale -- even though they can make A LOT more money off the short sale than through a foreclosure. See Bank of America. A simple Google search can be helpful here.
Second, MAKE SURE that the selling agent knows what the f'ck he/she is doing. Whether a short sale is successful will depend very much (if not entirely) on the seller's agent. He/she must be persistent and must know what they're doing. One deadline missed 120 days out could force you to start the process all over again. I've been told that many of these realtors screw up on purpose. They are often related to the sellers and their goal is to keep the sellers in the house as long as possible - while making it appear that they're trying to go through the short sale process.
Finally, be prepared to wait. Sometimes more than a year. If you are set on going the short sale route, the best piece of advice I can give you is to NEVER stop looking for a house until you close. If you can, have 6 or 7 short sale contracts going at one time, with the idea of taking the first one that is approved. Just put in EVERY contract that the sellers/bank have a very short time to approve the contract so that you can easily get out of it when another sale is approved (and you won't lose your EMD).
Good luck.
Ask your realtor what bank(s) is/are involved. Some banks handle these things in an efficient manner and you can get an answer within 2 months. Some are f'ing terrible. They always come back wanting MUCH more (often much more than the house could ever appraise for) and never seem to close one damn short sale -- even though they can make A LOT more money off the short sale than through a foreclosure. See Bank of America. A simple Google search can be helpful here.
Second, MAKE SURE that the selling agent knows what the f'ck he/she is doing. Whether a short sale is successful will depend very much (if not entirely) on the seller's agent. He/she must be persistent and must know what they're doing. One deadline missed 120 days out could force you to start the process all over again. I've been told that many of these realtors screw up on purpose. They are often related to the sellers and their goal is to keep the sellers in the house as long as possible - while making it appear that they're trying to go through the short sale process.
Finally, be prepared to wait. Sometimes more than a year. If you are set on going the short sale route, the best piece of advice I can give you is to NEVER stop looking for a house until you close. If you can, have 6 or 7 short sale contracts going at one time, with the idea of taking the first one that is approved. Just put in EVERY contract that the sellers/bank have a very short time to approve the contract so that you can easily get out of it when another sale is approved (and you won't lose your EMD).
Good luck.
This post was edited on 10/25/10 at 12:49 pm
Posted on 10/25/10 at 12:44 pm to Tiger JJ
Agree with Jersey. Make sure your agent has dealt with Shorts before. Ask if they handle the negotiations or do they farm that part out.
In a short the owners are less likely to damage the property (compared to an REO). The negotiations can take months (depending on the bank...I hope it isn't B of A. They take the longest).
Put in a couple offers and don't put all your eggs in 1 basket. Fall in love with the deal, not the house and you will be fine.
In a short the owners are less likely to damage the property (compared to an REO). The negotiations can take months (depending on the bank...I hope it isn't B of A. They take the longest).
Put in a couple offers and don't put all your eggs in 1 basket. Fall in love with the deal, not the house and you will be fine.
Posted on 10/25/10 at 12:45 pm to Tiger JJ
quote:
4)Get yourself a competent agent who actually understands the process from the point of view of all 3 parties: you, the seller and the bank. This will probably be VERY hard to do, so be selective. The majority of "short sale" agents, don't know their arse from a hole in the ground.
While that's true, often times the buyer's agent doesn't have much leeway. He/she can keep after the seller's agent, but the ball is in the seller's agent court. The buyer's agent doesn't have access to the system (e.g. BoA's Equator System) and other than bugging the shite out of the seller's agent, there's not much they can do.
Posted on 10/25/10 at 12:52 pm to Tiger JJ
quote:
4)Get yourself a competent agent who actually understands the process from the point of view of all 3 parties: you, the seller and the bank. This will probably be VERY hard to do, so be selective. The majority of \"short sale\" agents, don\'t know their arse from a hole in the ground
absolute best piece of advice in this thread
Posted on 10/25/10 at 12:52 pm to SDTiger15
quote:
In a short the owners are less likely to damage the property (compared to an REO). The negotiations can take months (depending on the bank...I hope it isn't B of A. They take the longest).
Put in a couple offers and don't put all your eggs in 1 basket. Fall in love with the deal, not the house and you will be fine.
I see you and I have similar experiences.
Posted on 10/25/10 at 12:54 pm to Newbomb Turk
quote:
While that's true, often times the buyer's agent doesn't have much leeway. He/she can keep after the seller's agent, but the ball is in the seller's agent court. The buyer's agent doesn't have access to the system (e.g. BoA's Equator System) and other than bugging the shite out of the seller's agent, there's not much they can do.
Well, my advice is to find a buying agent who does. The guy I use is all over that shite. In fact, he does the listing agent's job FOR THEM, because they are generally so incompetent. I've been looking at a lot of short sales, and the biggest impediment has not been the bank - it's been the utter stupidity of the listing agents.
Posted on 10/25/10 at 1:00 pm to Tiger JJ
quote:
In fact, he does the listing agent's job FOR THEM, because they are generally so incompetent. I've been looking at a lot of short sales, and the biggest impediment has not been the bank - it's been the utter stupidity of the listing agents.
Absolutely, true. I have a similar experience. My agent is GREAT and knows all the ins and out of the banks' processes.
However, you can have the greatest agent in the world and sometimes there's not a God damn thing they can do if the seller's agent is a dipshit. Take the BoA Equator System - because the seller is required to put a lot of personal information into the system, they won't let the buyer's agent have any sort of access to that sale (even if the buyer's agent has other sales where he/she is the seller's agent). PERIOD. All my agent could do was constantly ask to be sent updates. My agent KEPT asking 3 times a week to make sure the Equator system wasn't asking for more information. The Seller's agent kept assuring my agent that all the information was in and swore she was checking the system. Well, sure enough, the buyer's agent lied. And, 94 days out, the process started all over again because the seller's agent missed a deadline.
This post was edited on 10/25/10 at 1:02 pm
Posted on 10/25/10 at 1:09 pm to Tiger JJ
We've enlisted the help of a buyer's agent who seems to know what she is doing. She's at least very on the ball and organized. This is the only short sale house we are currently looking at, it just happened to be a very nice house that has the features that we want and in a good location. Also, the house was under contract, but it fell through. Before we put in an offer I want to find out why it fell through if I can. Hopefully it was the buyer and not the seller that didn't come through.
The listing agent also gave the impression that they really really want to sell the house, so we are hoping that might move things along.
Finally, the bank that "owns" the house is Wells Fargo which we are also going to get our mortgage through. We're not sure if that will help us or not, but I don't think it can hurt.
Thanks for the advice. We're trying to be very careful since it is our first house, but it's also exciting.
The listing agent also gave the impression that they really really want to sell the house, so we are hoping that might move things along.
Finally, the bank that "owns" the house is Wells Fargo which we are also going to get our mortgage through. We're not sure if that will help us or not, but I don't think it can hurt.
Thanks for the advice. We're trying to be very careful since it is our first house, but it's also exciting.
Posted on 10/25/10 at 1:25 pm to TigerNutwhack
quote:
Also, the house was under contract, but it fell through.
That's a little scary. Although there could be many reasons, odds are that it took too long and the buyer found something else in the meantime (or, the bank came back and asked for more money and the buyer bolted). Which means that your approval will probably take at least the same amount of time. Try to find out how long the house was under contract before the buyer backed out.
With almost all these processes, once 90 days passes, the bank will insist on a new BPO or full appraisal. That takes time, and they've got to process it through their system AGAIN. And, if the value of the house increased during that period, they'll be asking you to come up with more money.
This post was edited on 10/25/10 at 1:36 pm
Posted on 10/25/10 at 2:24 pm to Newbomb Turk
quote:
In fact, he does the listing agent's job FOR THEM, because they are generally so incompetent. I've been looking at a lot of short sales, and the biggest impediment has not been the bank - it's been the utter stupidity of the listing agents.
This is true for all real estate transactions. I have found very few agents that have a clue. The others are just doing real estate until their modeling career takes off
Posted on 10/25/10 at 2:45 pm to TigerNutwhack
quote:
Also, the house was under contract, but it fell through. Before we put in an offer I want to find out why it fell through if I can. Hopefully it was the buyer and not the seller that didn't come through.
Definitely good news, IMO, if it was due to the buyer. These walkaways are what creates the "aged short sale" opportunity in the first place.
quote:
The listing agent also gave the impression that they really really want to sell the house, so we are hoping that might move things along.
This concerns me. It's a short sale. OF COURSE the sellers want to sell and be done with it. If they don't, they get foreclosed and have a 7-year black hole on their record. I'm not sure what the listing agent's angle on this is, but I fear it's just typical incompetent sunshine up your arse.
quote:
Finally, the bank that "owns" the house is Wells Fargo which we are also going to get our mortgage through. We're not sure if that will help us or not, but I don't think it can hurt.
100% irrelevant. The servicing arm that is dealing with the short sale has literally nothing to do with the lending arm your mortgage would come through.
quote:
We're trying to be very careful since it is our first house, but it's also exciting.
Like someone else said - get emotionally attached to the deal...not the house. Good luck!
Posted on 10/25/10 at 2:52 pm to Tiger JJ
In short sale scenarios, I would generally assume the seller really really wants to sell the house, er HAS to in order to avoid foreclosure
Just do your homework and make sure your agent is competent in the area, possibly request one with the SFR designation which means they have extra training in foreclosures and short sales
Just do your homework and make sure your agent is competent in the area, possibly request one with the SFR designation which means they have extra training in foreclosures and short sales
Posted on 10/25/10 at 2:55 pm to Shankopotomus
quote:
Just do your homework and make sure your agent is competent in the area, possibly request one with the SFR designation which means they have extra training in foreclosures and short sales
Although those designations are largely bullshite. I would find someone older and take a look at their track record.
Posted on 10/25/10 at 3:30 pm to Tiger JJ
quote:
100% irrelevant. The servicing arm that is dealing with the short sale has literally nothing to do with the lending arm your mortgage would come through.
That's what we've been thinking.
quote:
Like someone else said - get emotionally attached to the deal...not the house. Good luck!
Yeah, if there is one thing Knoxville is not short on it's nice houses at low prices. Our rental is also month to month and our landlords are great, so we're not in any rush if things don't work out on an offer.
Thanks for the advice everyone. I'm gonna finish up work and then we're going to look at this house and another one that we really like again to compare and contrast between the two.
Posted on 10/26/10 at 5:04 pm to Tiger JJ
quote:
1)be prepared to wait a long time
and (2) be prepared to close in 4 hours once the bank accepts the deal.
Posted on 1/13/11 at 1:59 pm to TigerNutwhack
Just wanted to update on this. We got the house at a good deal in a really quick time frame.
And also:
While in general this is true I'm sure, it really saved our deal in this circumstance. The sellers were about to walk out (and into foreclosure because they were morons) because a 72 period of review was not told to our agents or loan officer. When the people on the short sale side were blowing off our agents our loan officer put in a call and got right through. They put a rush on it, and we ended up closing the next day instead of three days later.
And also:
quote:
100% irrelevant. The servicing arm that is dealing with the short sale has literally nothing to do with the lending arm your mortgage would come through.
While in general this is true I'm sure, it really saved our deal in this circumstance. The sellers were about to walk out (and into foreclosure because they were morons) because a 72 period of review was not told to our agents or loan officer. When the people on the short sale side were blowing off our agents our loan officer put in a call and got right through. They put a rush on it, and we ended up closing the next day instead of three days later.
Posted on 1/13/11 at 6:03 pm to TigerNutwhack
quote:
We got the house at a good deal in a really quick time frame.
Nice! Congrats!
quote:
While in general this is true I'm sure, it really saved our deal in this circumstance. The sellers were about to walk out (and into foreclosure because they were morons) because a 72 period of review was not told to our agents or loan officer. When the people on the short sale side were blowing off our agents our loan officer put in a call and got right through. They put a rush on it, and we ended up closing the next day instead of three days later.
I'd be really interested to hear the full story of why the sellers considered walking. But in any event, I stand corrected!
Posted on 1/13/11 at 6:34 pm to Tiger JJ
quote:
I'd be really interested to hear the full story of why the sellers considered walking. But in any event, I stand corrected!
Basically, they had moved away and stopped paying the payments for the house. Their credit was below 300 (freely admitted to us) so they figured nothing worse could happen. They had been dealing with trying to sell the house for over a year and just wanted to be done with it. The wife was also a huge bitch.
Like I said, they were dumb. They said they would have rather the house gone into foreclosure than have the bank accept our offer so they could have been done with it just 30 days earlier.
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