Has Anyone Ever Purchased a Short Sale?

We bought a short sale but our situation was unique. The banking that held the note had already run a BPU (I think that's what it was called) because they'd had a previous offer so they knew how much they needed to get for the home. We offered full amount and got our answer in like 5 business days! Then it took like 6 weeks+ to get everything together from our bank to do the closing.

But it can take 6-9 months. Also make sure that if the home has HOA fees or anything like that you know if you are going to get hit with them in addition to the purchase price. THat was one thing that happened with our. The HOA fees were behind and the lawyer didn't get the correct numbers to our closing agent and they estimated them and they ended up taking a hit because they estimated too low but not all closing companies would be willing to do that just to push the sale thru.

You shouldn't be putting any $ down until you have an accepted offer. You can't tie up $ for months at a time on a deal that may not even go thru.

We recently purchased a short sale in Naperville. We submitted our offer and it was accepted within a month. We closed a couple of weeks later. We were extremely surprised at how quickly everything happened...the house we were living in was still on the market. We were able to find a renter quickly so we could take advantage of the fantastic short sale we scooped up. We did write a check for the earnest money with our offer. Good luck - there is a lot of paperwork invovled but it was completely worth it!

Hi there,
I am a licensed mortgage loan originator in Texas and also own a National legal consulting company, specializing in mortgage loan analysis and resolution. We process short sales all over the country and list and sell them in the Dallas/Ft.Worth area in Texas. This is not a solicitation for your business, only my professional opinion.

There is nothing short about a short sale. Many of your time-related questions will depend on the Listing Agent and their level of expertise, how long they have had the seller's file submitted to their Lender, the type of loan the seller has, the servicing Lender who the loan is with, the underlying Investor of the mortgage backed security, whether the seller has mortgage insurance in their loan, and finally, if there are multiple liens on the property. We have worked with every major lender and servicer and sometimes the stars align and the seller's file glides right through, and others, if can take 6+ months for them to acknowledge there is even a request in their system.

You can submit your earnest money at the time of your offer, but it is not necessary. Often, this depends on the practice of the Listing Agent.

I would encourage you to NOT be wary of the short sale process, especially since you love the house and currently have a stable place to live. Since you own your current home, make sure you can qualify with both payments because if it hasn't sold at the time you are applying for your new loan, you are no longer allowed to get a renter and lease to offset the current payment unless you owe less than 70% of the home's value. Please select your mortgage professional and begin the pre-approval process now, so that you don't wait until the short sale is approved to begin. Often short sale approvals only last several weeks or 1 month, and in this lending environment, that is sometimes not long enough to process your new loan, and you can run the risk of the seller's lender moving to foreclose if you don't close by the date of their approval.

Best of luck and if you have additional questions, please feel free to message me.

C.

We put in an offer on a short sale and after 3 months we pulled the plug. It was just taking too long and we didn't have the whole 6 months to wait. (school was starting). After we pulled the offer the bank begged us for another day. (after going through 3 extensions). We pulled out anyway and I found a better deal in a better location.
If you have the time, a short sale can be a good deal.
We did give a check for the earnest money but they did not cash it and we got the check back. I don't think they can until you close - but i'm not sure. My advice - get a realtor who is really experienced with short sales! Not a realtor that has had 1 or 2.
Good luck!

My husband and I bought a foreclosed house before we got married. It had been vacant for about 6 months and was in pretty bad shape. We gave a really low-ball offer, and they accepted within a week. It might take longer for you if the house hasn't been on the market long or there are other offers. They actually gave us the keys within a month and let us have control of the utilities way before the sale was finalized. I don't recommend that, because we had already torn up all the carpet and done some painting before we actually owned the house, and they technically could have backed out and we would have done all that work for nothing.

Something really smart my husband did, was have the realtor put a clause in the offer that we could renegotiate if any problems showed up during the home inspection. Some banks won't accept offers like that on foreclosures, but they did in this case, probably because it had been vacant so long. Turns out the water heater had gotten fried when the electricity was turned back on after the pipes had been drained, so the bank paid for a new water heater so we wouldn't back out of the sale. It's a small thing but we were glad it worked out.

If you do get the house, make sure you get title search insurance. It can cost a few hundred dollars, but it will protect you from a lawsuit if the previous owner tries to claim title ownership anytime in the future.