Anyone buy a short sale?

[Monica]

We tried to last year...made five offers and finally decided to buy a traditional sale. There are a lot of people that have been able to get a good deal on a SS or foreclosure, but our experience wasn't good. You really just have to be prepared for it to take a LONG time, and that you will probably have to make offers on multiple homes.

We did sell our other house first, as our realtor told us that banks won't accept contingent offers and want to see that you have the cash in hand.

[annadala]

We had to short sell our rental property when DH and I both lost jobs (that was a fun time). We put it up on the market in April, accepted an offer in May, the bank approved the offer in August and we closed in December. It was soooooo sloooooowwwww. I think they should call it a slow sale! It can be even trickier if it's a bank owned short sale since they can have multiple offers in the wings and accept any of them, even ones that came after yours.

It's great if it works out since you can get a good house at a good price but it's not an easy process.

[lolc]

We are currently going through the process of buying and selling. Our timeline so far: Listed our house in February, got an offer in early March. Accepted offer. Started looking for houses. Found a great house, but it's a short sale (as most houses are). Inquired about short sale details. Found out short sale is due to (military) family being transferred a few states away, and that they are very motivated to sell. Listed at 224k, reduced from a starting point of 235k. We put in an offer of 214k after getting comps in the area, and also factoring in that there might be some repairs we aren't aware of. We put this offer in March 12. After some small negotiations the sellers accepted, but we needed their bank's acceptance. So their agent submitted our offer and they did whatever they had to do to get things moving on their end.

We only JUST got the approval (after much pursuit from us, the title company, and the sellers) on Friday (verbally) and received the written approval today. So over 2 months of living in limbo, having no idea if our offer would be accepted or not.

In the meantime, our buyers lender did their appraisal. And it came in 15k lower than the price we agreed on. It's definitely a hit for us and the buyers were concerned we would back out. But we decided not to (we have outgrown our house and we would at least be walking away with most of our initial down payment, which we can live with). So we instead asked them to please work within a much longer time frame. Instead of closing in early May like they wanted, our realtor suggested we ask them to wait for a late June close date, in hopes that the short sale would be processed by then since the sellers of the house we want to buy are leaving the state then anyway.

So... so far, things are progressing and I pray to God they continue to do so. We have an inspection of the house on Thursday (it's as-is, so we're hoping nothing big pops up!) and still have a close date for the end of June. At this point it would be nice to close even just a few days earlier than the scheduled date, but we'll see. Our buyers have been made aware and are making their final preparations. Their inspector needs to come out and re-inspect the repairs we made in order for them to get their FHA loan.

So that's that.

This might seem like crazy advice, but if I were you, I would research as much about the house and the previous sale as I could. To see a price drop of 150k is huge (well, depending on your price point I guess). If it was initially listed and has been a short sale since it was initially listed, then that is an indicator that even at that higher price, the bank would have been taking a loss. If they just lowered it 150k, this might just be a bait tactic. They get you to go into contract, knowing full well the bank will scoff at such a low offer... but then, after a period of time, they get an answer as to what the "approved" price is that the bank would be willing to take. It would likely be much higher than your budget. From what my realtor said, if the bank agrees to a short sale, the price is usually within 10-15% of what other comparable homes are selling for. So if a deal seems way too good to be true, it probably is.

[sjh722]

Be prepared to have somewhere to live in the (very likely) event that it takes forever. Would you have the option to go month-to-month after your current lease is up?

[sarahbear]

My mother bought a short sale (condo) and it did take several months, but all worked out fine. There was no crazy story or bad outcome. She just had to wait on the bank all the time.

We bought our house short sale a year ago. We got a good deal on it, did lots of upgrades and had it appraised at almost 40k more than what we paid (including renovation costs). For us, it was the crazy realtor the out of town sellers chose that almost ruined the deal. But once we got passed that (by going to his boss) we were able to make it through just fine. It was a slow process. We started in January and didn't close until April. Things were delayed just waiting to hear back from the bank (always expect to hear back at the latter part of their estimated time frame). We were not in a situation where we needed to give notice and vacate another property though. The good thing about our situation is that the bank had already approved the price prior to us looking/offering. That was the ONE good thing about their realtor. Sometimes realtors will list it at a price the bank hasn't agreed upon yet, and then it takes forever for them to determine if they will accept. You'll offer the listing price and the bank might come back with a higher price! Also, if the owner has 2 mortgages it will take longer too because both banks need to agree to the price.

If you're going to make an offer I'd wait until the last possible moment to give notice where you're at, and have a back-up plan in case things don't run smoothly.

[lemondrop]

Our current house was a SS. It wasn't too stressful. Our other house sold very quickly, and our only issue was that we didn't have approval from the current owner's lenders to buy the house until one week before closing.

We were able to proceed with the appraisal and inspection even though we weren't under contract on the house.

[emoflamingo]

Our realtor said they avoid short sales because they are usually happening (at least here) because people are trying to avoid foreclosures so we could be in limbo for a few months and have the bank decline the sale still. I honestly don't see many short sales here. Mostly regular sales and the occasional foreclosure.

[house]

We are in the process of buying a short sale too. And yes it takes forever. But supposedly unlike the last few times this time the bank is more responsive than the last people who offered on it. We are still waiting for the bank to accept our offer. Though its been only a month since our offer.

Oh and another house we really like came back on the market so we may not even go through the short sale. The other house is much bigger, has a better kitchen and $25000 cheaper with twice the land!

[catsarecute]

We purchased a short sale. We were moving from an apartment so we didn't have to worry about selling a house but it was still a tough process to go through. We made an offer on July 24, they accepted and the first bank approved it but the second bank took another two months to accept. I know that isn't a very long time in comparison to other short sale situations but it seemed like every day there was new information about the house.

The sellers realtor was a prick and would not communicate with our realtor. Right at the last minute when it seemed like everything was going to go through, there was a hiccup in the process. It was just annoying. You have to really decide if it is worth staying in the fight for and be patient.

[vaportrail]

we actually closed on a short sale today...we put our offer in the end of December. So 5 excruciating months later, we actually own it. It requires so much patienceeeeeeee...plus our realtor should NOT be selling to first-time buyers. she was no help. we were originally going to use WF as our lender and we were excited that they were one of the banks that had to approve our offer...they took FOREVEEEERRR. first bank took 3 weeks and done. WF took about 3 months...we did NOT use them for our mortgage. i'm getting pissed again thinking about it...

[bluesmoothie]

We put an offer in on a short sale on 12/24/2010. It had been on the market since the summer. We were given a close date of 2/28/11. We ended up closing on 4/01/11 due to a burst water pipe that had to be repaired. That obviously pushed back the original close date. It had nothing at all to do with it being a short sale. The ss was through Bank of American and we would have closed in 60 days if it had not been for the damaged pipe. The whole thing was surprisingly easy.

[sillygoosegirl]

We're trying to buy a short sale right now. Our offer has been at the bank almost a month so far, and we've not heard anything. I'm a little concerned about some alterations we've seen the current owners do to the property in that time (not things we disapprove of, but who knows what else they will do--they said the changes they made were "for safety reasons," so it could be that they are honestly trying to make sure the house is mortgageable and the sale goes through: while short sale owners are notoriously unmotivated, the short sale doesn't trash their credit as badly as a foreclosure and it also reduces their future obligation to the mortgage holder.). I'm trying to remain calm and not worry too much. The worst that can happen is we don't buy the house and keep renting. We're month-to-month, so that's really nothing more than disappointing. Ultimately, our offer isn't binding, so if we find another house we like better in the mean time, we can back out. If we do eventually get this house, we'll be getting it for a great price and we really like it. If we don't get it... Well, that's the same outcome as if we hadn't tried.