Monday, December 7, 2009

Some things we've learned about short sales

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Just a few things, thinking back over the last month, that we've learned about short sales;

  • They can take a long time!  Patience is very important.  For us, we're lucky, we're in a house now and we can wait.  But it does not make it any easier.
  • If an offer has already been made and accepted by the buyer, move on to the next property.  An accepted offer is supposed to have the first chance at purchase.
  • If there is a second mortgage/equity line on the property, that lender has an opportunity to weigh in on the whole deal.  The first note holder will likely try to influence them to play along, but they don't have to.  
  • Just because you are in escrow, it does not mean that this is a done deal.  I've heard stories of people breaking escrow because another arm of the bank decided it was time to foreclose.
  • You cannot make a contingent offer on a short sale (thankfully we did not need to)
  • We've heard that if it appraises for less than your offer, then it is possible that the bank could come back with an amount less than your offer.
  • You can still have inspections done on the house you are trying to buy, but it is an as-is sale, so there is no obligation for them to resolve issues.  However, you do not lose your right to exit the deal based on issues in the inspections, so it is well worth the investment to do inspections.
  • There is really no cost to put an offer on a place, you do not put up money until you get into escrow.  This gives you time to work out financing and other details.  Of course, you will need to show that you have financing, so there could be some charges with your bank to get a commit letter.
  • Lots of rules now when trying to purchase a second home....can do a whole other post just on that.  The short of this though is that a few bad people have damaged this process for others.  It makes qualifying more difficult, but not impossible...if you have your finances in order and some good solid down payment funds.

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