House hunting — the highs and lows and Hoozahs (an update)

Don't know much about short sales, but I do know you should not listen to a single word of what the seller's agent says when you make your decisions. The seller's agent looks out for, in order: 1) The seller's agent; 2) The seller; 3) Nobody else.

You -- not your agent, YOU -- should talk to the bank or to whoever it is that is agreeing to the short sale and make sure this is going to happen.

 

Get a buyer's agent.

 

It took us over a year to sell the house we were living in, a process that included a couple of (painful) near-misses.

So we had A LOT of time to look at houses and settle on the one we wanted.

 

In any other circumstance, I would agree. But since this is a short sale, the seller gets no money. There is no financial gain by the seller. The only goal of the sellers agent is to get the property approved for sale by the bank.

BTW, my offer was accepted this afternoon. I have to get an inspection now and pending the inspection the offer goes to the bank. If the bank accepts I get the place. If not, we might have to counter offer. Regardless of the selling price, the seller won't get more or less money. And the amount of more or less money the selling agent would receive is negligble.

 

Congrats.

Do you know, for instance, at what point your deposit becomes non-refundable? What if you've paid out $2,000 in good faith money and then the bank says it won't approve the short sale, what happens to that money? What if there's a dispute about the condition of the inspection and whether the contingencies should be removed? What if the bank really will approve the sale at a lower amount but the seller's agent is unscrupulous and tells you it has to be $5,000 more? Those are just two of about a thousand things that can go wrong if you think the seller's agent is helping you.

 

I should add that since you already have the house and all that's left is the contracts and the deal, you are probably better off with a real-estate lawyer than an agent. A lawyer will just charge an hourly fee. An agent would be tough to bring in because the fee would probably be a percentage of the deal, which at this point means it would come out of the pocket of someone who is already involved, either you or the seller's agent.

 

I have until Tuesday morning (Feb 1) to back out. At that point, if I back out, all I have lost is my inspection fee. After that point $1000 of good faith money goes into escrow. If I back out, I lose the money immediately. If the bank declines the sale, or the seller backs out, I get the money back immediately. That's why I'm doing the inspection up front... so I don't lose a deposit.

Also, if the bank declines my offer at $XX,XXX.xx, I have the choice to offer a higher amount, or again, I can just walk away and get my $1,000 back because they didn't accept my offer.

 

Also, this is an option, but only if necessary. My parents have bought and sold a lot of homes in their time and they are helping me through the process. They've never done a short sale, but in terms of the general paperwork and mortgage stuff, they know what's going on. If I were buying a much more expensive property or they wanted more of a deposit, I would probably already have a lawyer.

So has anyone out here done a short sale? If so, how long did you have to wait. I assume this has got to be the hardest part. Waiting for 2-4 months knowing the bank could call any day and let you know if they accept or not.

 

My fiancee and I are also currently in the hunt. We've found an agent and have looked at a handful of homes in the last few weeks but I had a job interview on the other side of the city last week so we decided to hold off on making any offers until we find out what happens with that.

Our agent told us "there's nothing short about a short sale." The lease at our apartment is up at the end of June (and the rent has just gotten out of hand, climbing every year we've been here despite neither of us getting a raise during that time) so we are more than ready to split. We haven't completely ruled out short sales but the more I learn about them the more reluctant I feel about them. I would also be curious to hear feedback from anyone who has purchased a short sale and exactly what the ins and outs are.

 

Took a hard look at a short sale but our deal on new construction worked out.

The hard part, as you said, is the waiting. It can take 60 to 120 days for the deal. As I recall, the longer the house has been on the market, the quicker the bank is to make a deal.

You should do a search of county records, find anything you can on numbers for the house. Give you a better idea on the financials

 

I have all the public records, they have helped substantially. What's also important is the agent said she has sold 25 homes via short sale. All but one of them sold on the initial offer because she prices to sell and save time and money for the bank.

 

Is the name on the contract the same as the name on county/city records? Do the people still live in the home?

Does the selling agent have a relationship with the seller? Multiple listings with that bank?

Is your deposit with a title company or did you write the check to the selling realtor's company?

Did the selling agent steer you to a specific settlement company? It is your right to choose the company?

Who wrote the contract? Do you have an appraisal contingency? Just because the condo is selling for $80K less than originally sold doesn't mean it will appraise now.

The selling agent's experience sounds great but each short sale depends on bank holding the note. How much is owed? What are the carrying costs for the bank? Taxes? Condo fees? Legal fees?

I have a short sale three doors down from my house. The first contract was originally proposed in January 2010. The buyer bailed in August. The selling agent told me the short sale number was approved by the bank and the next contract accepted would close in 45 days. The next contract was signed on October 29th.

The house is still empty.