I put in offer for a home about a week ago... It is a short sale and the owners have accepted the offer, plus they have deposited my earnest money in escrow.

The question is, should the house now show pending on the MLS or not since the banks have not accepted it?

Would my offer seem strong? I am putting in 20% and waived inspection, plus if accepted I am financing with one of the banks that has to approve it (there are 2 banks)?

I originally put in 30 days for them to review, they've changed it to 60 days. I don't like short sales, but this home is too good to let good. Like the previous post, if there is a bidding war, I am out!

 

I'm not sure about the MLS listing. I thought they had 48 hours (or some time limit) to remove it from the listing service.

What concerns me is that you waived the inspection. I hope for your sake that the house is in good shape.

At any rate, good luck. Hopefully your situation turns out better than mine!

 

^999999

I would NEVER EVER waive inspection. Who's idea was that? How are you sure everything is in working order?

 

Just closed on my first home last Thursday which was also a shortsale. House will not show as pending on MLS until the bank accepts it. Is the property bank approved?

 

I waived the inspection because:

1. I live right across the street from it since new. I can pretty much see everything that has or could of happened to it.

2. It's fairly new, 05. Again I lived at my house since new and can see the house from my house.

3. I am fairly handy. If there are anything to fix, I can do it. Most inspector don't do much for me anyways, I can do what they do, which I do to my own house, I inspect it every few months.

And baboy, how do I know that the house is bank approved?

 

^ He means has the bank approved the offer. The owners may have accepted your offer, but that does not mean the bank has... and they are the ones who need to accept it for there to be a deal.

As for the inspection... still should have done it. We were looking at a foreclosure near one of our friends, and from all outward appearances, the house looked pretty good. We knew we need to finish construction inside, but we did not mind that.

On a hunch we spoke to the developer for the community next store who's sales office sits in perfect view of the house. After speaking from him we removed all offers and ran until we saw Eskimos. He watched the house be built... construction was shoddy and many corners skimped. He told us things even an inspector would not have found.

Point is, for the few hundred dollars it costs for an inspection you should get one. You say you're fairly handy... but unless you are a certified inspector or a home builder, you should get a professional opinion before putting one dime into it. Just b/c you can see it does not mean you know what is going on behind the walls and under the floors...

 

I know what you mean. I thought about that though. I've been looking for a home for a LONG time now, and have not seen a home that I would pay a lot of money for, until this one.

Location, location, location... If (hopefully not) there is/are anything wrong with the home in question, I would not mind because of the location. I can't seem to find any home better located than being a few hundred feet away from where I am now. Again, my situation is different.

Oh and they just took the home off the MLS as of today.

Just My

 

I don't understand why you wouldn't pay a licensed inspector a few hundred dollars to look around. Hell I'll finished basements, built editions, and I would never buy a house without an inspection. I have good eyes, but 4 are better than two.
I also think taking the emotion out of buying a home is a good thing. An independent inspection is money well spent.

I am going to provide you two tidbits of wisdom, then I will drop the discussion.

http://993c4s.com/wp-content/uploads/2008/08/penny-wise-pound-foolish.thumbnail.jpg

 

Well, I guess what's done is done.

Still doesn't make sense to me that for one of the the biggest investments of your life which will cost you hundreds of thousands of dollars you do not fork over a couple hundred for the peace of mind and another set of eyes (who also happens to be a professional) to look over the place.

Hope everything works out and I hope there are not any hidden surprises.

Good luck!

 

Also, out of curiosity, how long was the house on MLS? Short sales here vary. Some are scooped up quick, others not so much.

 

Thank you for your advices! I really do appreciate it.

Juniorbean, the home was on the MLS for 1 day when I saw it and I jumped on it like a lion on a gazelle. Actually I waited a week and the price dropped 41k and I found out that the owner's had not paid the mortgage for 4 months. That same weekend I put in the offer and am waiting patiently.

Short sales seems to be a lot around my area. I look at the price it was bought for and the price it is selling for. Most are selling for wayyy less than purchase price.

 

^ Yeah, we had an $400k offer in on the foreclosure mentioned above and the house was valued around $1.5 million (county tax value). The asking price was $415k, so we would have likely got it had we not pulled out before signing anything after we found out more about the place.

Keep in mind that even though you waived inspection it does not mean you cannot hire an inspector anyway (after closing). This way you can have someone look it over and know what, if anything, you need to fix.

 

That's strange. I guess it depends on the area. Up where we are looking in NY, the short sales are less than 100k off the price the last owner bought it for. Not as good of a deal, and a hell of a lot more aggravation, it seems. I wonder why it is so different there than other places. This annoys me.

(For example, the house I was referring to in my thread was purchased for around $450k IIRC, and now it is listed as a short sale for $399,900. It's also been on the market since April 2008.)

 

^ I would definitely do that.

 

My potential home is ~80k off the original purchase price of 460k.

 

In my experience, the bank (who owns the property) must APPROVE the listing value of the house before you make an offer. Often times, listing agent puts up a price that bank hasn't approved. You as the potential buyer may like the price and offer at 100% but that doesn't guarantee you anything because the bank didn't pre-approve the listing value. That's why, often times you see it thru MLS listing whether the house has been pre-approved by the bank. Keep in mind, once they pre-approve, it also have an expiration date... (in my area usually 30 days but this depends on the bank) Between the seller and listing agent, they have an idea of what they want to let it go for, but it means nothing unless the bank (who ultimately has saying in it) didn't approve. Hope this info helps.

For my house, it was pre-approved prior to us looking at it and only had two weeks left before it was expired. Thankfully, they accepted and it's now ours. Good luck with yours! Shortsale can be such a hassle but it's definitely worth it knowing how much equity you just gained by closing on the house.

As for the inspection... ultimately it's your decision. I'm defintely no handy but I do HVAC/Plumbing work for living. So I wasn't too concerned with the existing system but when it comes to structure, walls...etc I wanted a professional opinion. Like everyone said, several hundred dollars is def worth it. Not only that, it gives a list of things to repair (hopefully nothing major) so you won't have to go out and look for them yourselves.

 

I really don't like short sale!!!

Long story short, my agent wasn't good at dealing (nor the experience at all) with short sale neither was the listing agent. They deposited my earnest money when they were not suppose to and I finally got it back a couple days ago.

At this point my offer is void and I am out! But the escrow said that if the banks ever come back with an answer she will let me know, I doubt it.

But I think I am done with buying a home for now!!! The 8k deadline is near and not possible, at least for me.

Plus the economy is still in the tank and the future looks grim for at least a while. OK good night!

 

Bumping this one from 2009 for some advice...

I've been looking for a condo in DC - I currently own a condo in Alexandria, VA. I'm not in a hurry to move - I'll be renting my place in Alexandria out. I found a great unit in a great building at a great price... it's a short sale.

The current owner purchased the unit in August 2006 for $427,900 and it's now selling for just over $360k. There are two loans/lenders on this property. Honestly, $360k to be a pretty good price for this unit, not an outstanding deal.

If I put 2% towards earnest money, am I at greater risk for losing it if one lender accepts but the other doesn't? sporting's experience above has me worried.

Is it required I finance through the selling banks?
I'll be meeting with my realtor about it this weekend. What questions should I ask before/during my meeting with her?

 

From what I know, you won't lose that money. Both lenders HAVE to accept your offer for it to bind and then you'll be in contract.

Update on my end, the house I put the offer on still is listed as pending to this day! I am thinking the listing agent didn't do squat, even to take it off! And I put 5k for the earnest on 390k price!

1. No
2. Not much, I would say most of the short sales are a PITA!

 

You do not have to finance through the selling banks.

Honestly, you can ask as many questions as you want, but from my experience, it doesn't get you anywhere. I guess I have a sour taste in my mouth from when I went through it, but be prepared for a lot of waiting (can be months for a decision), and a lot of BS from the banks. Don't get attached.

 

Check the listing regarding closing requirements. Example, the one we ended up with we could finance with whoever we wanted, however, we had to use an attorney chosen by the bank. No biggie really since we had our own attorney glance everything over. It was pretty standard stuff anyway. That said, there were some that required pre-approval by the listing bank, and some that required financing through them... so they're all different. If the listing does not mention, have your agent confirm...


Correct. The house we just bought was a short sale and had two lenders on it. The primary accepted pretty much right away (after some negotiating)... the secondary took another week or so. All told from first offer to closing was ~3 months.


Go after it again! Can't hurt, right? Sucks b/c some of the listing agents are good... some are terrible. Looks like the one you were dealing with is on the worse side of the spectrum...

 

^
I would try again, but as you can see in my "Just Poured My New Driveway" thread, I have a place now, I think I'll wait a couple more years until I pursue buying a home again. Home prices I think will still be weak/fall.

 

Unfortunately it sounds like the listing agent for the property I'm interested in is also in the "sucks balls" category. My agent is telling me they pretty much don't have their act together.

Good info here. I'm ready to wait - I'm not in a hurry. I'll have my agent check on the financing since the listing doesn't say it. I know 1st trust is through BoA but don't know the 2nd. Sounds like I shouldn't get attached like LuvMyTsx said, and keep looking for other opportunities until I get work both lenders accepted my offer (if I put one in).

If I offer list price with 2% earnest money, what type of negotiation (if any) should I expect from the banks? Anything to watch out for there?

 

I don't think the earnest money matters that much with the banks, only with sellers as it shows you are serious. The banks are looking at how much they will lose and how much they can compromise.

Again, with short sales, you just offer and wait (if you really want it). That is all you can do.

 

Ahh, sorry... missed that one. Haven't been on much... been crazy getting our new house in order!! I'll have to check that thread out.


Again,

When we were making our offers the bank didn't care about earnest money... they just were worried about the offer and how much they would net.

 

Definitely don't get attached. We looked at probably 20-25 homes leading up to this one and my wife started getting attached to a few. Once they went off the market, she stopped getting attached... but with this one, she was really attached to it. She would go on the weekends and read a book on the deck overlooking the lake (house was empty for about a year, so no one was around). So it's really good we got it!

Anyway, that kind of sucks about the agent. Lucky for us the selling agent was great. She reduced the price $150k, and when the bank kicked back, she had a contractor come out and estimate all of the work which needed to be done. Conveniently that number came out to about $150k so the bank agreed to the price drop. So she was on the ball. When we saw the house, it was after it was re-listed, so we made our offer at that lower price. We went in ~$15k below the new list, however, we were liquid (plus no house to sell and already approved for a mortgage) and could close ASAP. They came back at listing... we went a little higher, they came back at listing again, and we just took it. Still a steal, but we wanted to play the game a bit. After the big price drop we had a feeling it would take an offer at listing to get it, but hey... we tried! We also knew the repair/upgrade list the agent had was inflated, so it really didn't need that much work. Example, there were 2 different structural issues and they figured about $35k total to fix them. We fixed both for under $10k. Example #2 - The deck needed workand their guy said we had to rip it down and rebuild (~$15k), but everyone we had look at it (inspector, 2 structural engineers, and two contractors) said it just needed re-supporting. Cost, $675.

So, if I were you I'd come in a tad below listing price and see what happens. If they take it, great, little bit more money in your pocket. If not, then just go up to listing (which is what you're expecting anyway) and go from there. As mentioned a few times in here, the waiting game can vary based on the bank and the selling agent. We have purchased two short sale properties (one piece of land, and now our home) and both took ~3 months from offer to close.

Be prepared though... once everything is accepted, the process goes very fast!! We were in contract 11/3/10, got the acceptance 1/5/11 and they wanted to close by 1/31!! That gave us only ~18 business days to close! Luckily we kept our mortgage guy in the loop from day 1, so he was ready. The inspectors we needed were available (be sure to have a good one lined up in advance), so we were able to do it and we actually closed on the Friday before (1/28) to ensure everything was processed and filed by the 1/31 deadline. So like I said... be prepared!!

 

juniorbean, that's exactly the type of info I was hoping to get - thank you and sporting for all the good advice.

 

Well the clock has started ticking.

I submitted an offer last night for ~$30k under list. Seller should give us an answer within a week, then I wait for the bank if the seller accepts.

Both 1st and 2nd trusts are with BoA, and they have a professional negotiator handling the short sale, so hopefully it'll move along in a matter of weeks, not months. Seller's agent said he sold another BofA short sale in 4 weeks recently. Keeping fingers crossed.

 

GL einsatz! Keep us posted.

 

Apparently the seller signed the contract
Should have a copy of the signed papers tonight, and it goes to the bank tomorrow for approval.

 

Cross your fingers for bank approval.

 

No problem and great to hear!! With the professional negotiator involved you should save a lot of time... so hopefully you hear back soon and can make a move. It's a perfect time of year to close on a house!! Good luck!

 

Well I might as well post an update on my short sale fiasco...

The offer went to the bank for approval in early April, and three months later my realtor places her monthly call to the seller's agent for an update.

The seller checks with the bank and they tell him it'll go for review in the next week, so I was happy with the update. So the seller's agent calls my realtor and tells her the good news - but also drops a bomb.

The seller apparently never paid her HOA fees, and had a $24,000 lien attached to the unit because of it. The seller had intended to pay this when she listed the unit, but now she didn't want to/couldn't pay it, so if I got bank approval, I'd have to pay that $24k up front. The HOA refused to dismiss/decrease the amount, the seller refused to split it with me, and the bank refused to get involved. My realtor's agency's lawyers got involved to see what we could do and it looked like we didn't have many good options.

We were floored - I would've had to empty my savings to pay the down payment + 24k + closing costs. No way I was going to do that, so we killed the deal. We withdrew the offer a couple of weeks ago.

 

That's dumb that the HOA wouldn't allow a clear title on the house, allow someone new to move in and start taking care of it vs. it sitting vacant. They should be going after the previous owner, either via the courts or whatever other avenue they need to, but their debt should not have to be paid by you and it should not have destroyed your deal. Bummer.

 

WTF $24k? Even if the HOA was $300 a month that would be 80 months of fees. How many months does she owe the HOA and what is the monthly dues?

NM, I see you withdrew the offer, probably better off.

 

HOA fee of 300 in downtown DC would be low. That building's fees were about 400/mo. Owner never paid them - so back fees + overdue fees just kept compounding.

They supposedly went into arbitration and the HOA won the case, but she still wouldn't pay. I'm amazed at how some people just don't give a fuck.

Whatever - I just got word an offer I put in yesterday (not a short sale) was accepted, so I'm moving a block away from where the short sale was to a higher-end building, a unit with more sq. ft., nicer view, and a block closer to a Metro station. So fuck it, I'm happy the short sale turned out the way it did.

 

Even more surprised then that they would expect someone else to pay her debt. Have never heard of someone totally unrelated having to pay for monies owing from someone else's lack of payment and judgement against her.

Great news!! Enjoy the new place!! Glad it all worked out in the end.

 

Awesome!! Everything happens for a reason! Glad it worked out for you.



Typically the debt is on the property, not the person when it comes to HOA fees. The house we bought was behind as well, but the seller paid it before closing and the lien was released by the HOA about a month before we closed. Had he not paid we would have either had to pay it, or walk.

The HOA could go after the homeowner, but there's no guarantee they'll get any money... but by leaving it on the property, they're pretty much guaranteed to get paid either by the seller, or if they jump ship, the new buyer.

 

glad to hear it worked for the better Einsatz!

Junior, sounds like you were REALLY lucky to get that home with the way your wife got attached to it!

I've been in the same situation you were in, ready to move asap....but taking our time to find the best deal possible. Found a fairly good deal on a dream short sale, numbers were going to be a little tight with my fiancee getting her masters, so we balked. Five days later the asking price dropped 25K so we pounced. The drop was on a Thurs night, made a second walk through the following afternoon and the offer went in Monday at about noon. We were told that there was an offer that came in that morning already but that they would hold it until they received ours.

Knowing that they had another offer I went $500 over listing, unfortunately they went with the other offer so it must have been higher. My fiancee was devestated, and refused to even look at anything for about a month.

Last week I saw that it finally shows as sold, but for 7k below my offer I can only guess that they must have found something in the inspection.

 

To expect you to pay their debt is ridiculous. What a dumb broad.