talk to me about short sales & buying a house that is in short sale

[jessica31876]

We are looking to move so we can be closer to our daughter and want to have a fresh start as well. Well we found a place we really like only 8 miles to the Walmart Supercenter near my daughter so probably about 15 miles tops to her house. Whereas now we are at least 30 miles from her.

So anyhow the place we were looking at was under short sale. But the realtor is being sort of odd about that place telling us she has lots of places to show us in a town called Mims. That is too far away from everything. We need to stay in a place where we make it to dr's in a decent time without having to switch doctors and be closer to our daughter. Nowhere in Mims is going to fit that bill. But it is like she is trying to push those over the one we like and I do not understand why and honestly it is pissing me off (sorry for the language). So what I was wondering is can the seller back out of a short sale? My understanding is a short sale is through the bank and they are just trying to recoup the money they have put out without having to foreclose. I am new to this and we have told this lady we are not interested in Mims. There are two places we really like. One is right off the highway and in a really good place and great shape with about 1/2 an acre so a little more manageable then what we have now.

The other place is just houses away and a street down from the guy who hit and killed our son (around half a mile accoring to mapquest). The only reason we even considered it is the size of the house, that is in nearly perfect shape but the location is HORRIBLE!! So I really am not interested in it honestly. If it was in a different location it would be a dream home.

So basically what I need to know is should we find someone else who is more interested in showing us what we want to see? Are people allowed to back out of a short sale? How does a short sale actually work? And if we bought on a short sale what would happen if the guy trashed the place after we finalized everything but before we moved in? Our only experience with home purchase was buying a used mobile home and land and both were through private sellers and it was paid off many years ago.

Ideally I would like to stay where we are because it is the home our kids grew up in and it holds a lot of memories but the neighborhood is not the same as it once was (drugs, unemployment and foreclosures make things look bad) and those memories of my kids growing up are not so great when they cause as much pain as they do happiness...kinda bittersweet I guess. We also were in the middle of remodeling out kitchen when my husband had the accident and my son was doing most of the heavy work, cutting and stuff which my husband cannot do. I was helping him a lot but I cant do everything so now we have a bunch of cabinets that need to be put up and the kitchen needs to be finished so we have a ton of work if we decided to just stay here

So what should we be doing? We really really want the place we looked at. We told the realtor we want to put in an offer and she keeps telling us before we do that let her show us the places she has in Osteen and Mims. But like I said we do not want to move there no matter what good values they are or how nice they are. They are just wayyy to far away. It kinda makes me feel like she is pushing something that has been on the market a lot longer and I do not want to deal with that.

 

[BrattyMeg]

You don't have to use the realtor as your buying agent that has listed the house originally. You can get an agent on your own to negotiate the purchase for you. If you really like that one place and it's a short sale I'd go for it and hope the bank accepts your offer. Not sure why the realtor is being rude about it. It's probably b/c she won't make any $$ really vs something else that has a bigger profit for her seller which might be why she's pushing other homes.

If you have the credit or cash and don't have another home to sell the ball is really in your court as far as purchasing goes. It's a great market for that type of home buying. Selling not so much but def for buying which it sounds like that's all you are doing since your place now is paid off right?

You should be able to back out of a sale at anytime but you'd lose your earnest $$ unless it's a reason beyond your control. (Check the rules for your state). The buyer may try and say you can't or threaten to sue but almost positive you can. Lord knows we had enough back out when we were trying to sell our home. You should be protected after closing if the house was to get trashed, etc. I wouldn't worry about that.

p.s..I'd probably let that house go in the neighborhood as the guy that hit your son. That will ALWAYS be on your mind and it's not worth even a dream home. That wouldn't be a fresh start for y'all

 

[misfitinmn]

I agree with Meghan, I would find a realtor that you are comfortable with and one that will be honest with you on the condition/details of the house. Perhaps there is some underlying issue that this current realtor is not wanting to disclose to you or she may just be trying to steer you toward something that's higher commission for her (which is so, so wrong!). Does she have the listing of all of the houses she's trying to sell you on, or are they listed by another realtor?

I asked my husband about the short sale & what would happen if the previous owner trashed it and he said this:
"Short sale or not, if a person doesn't leave it in the condition that is expected, you don't need to close. But if you sign an "as-is" addendum, then you're accepting it regardless of condition"
I'm married to a real estate guru (granted, we are in MN so things will be a little different here) but if there is any way I can enlist his help I'd be glad to do it!

 

[heathergw]

our house was a short sale... it took 6 months from the time the seller signed the offer to when the bank finally accepted our offer... they are called "short" sales not because it's a quick sale but because the seller has agreed to sell it for "short" of the value.

my guess is that the realtor that you're "working" with is trying to steer clear of it... because it's a ton of work for them... I say that if you're interested in that house, that you find a realtor that specializes in short sales and foreclosures... they're the ones that will do the work and the nagging and fighting the bank that needs to be done... once you put an offer on the house, just be prepared to sit and wait... a lot of the reason that short sales end up in foreclosure is because nobody wants to wait so long on the bank to make the acceptance... and the reason the bank takes so long is in hopes that there's going to be a better offer... your realtor will need to find out if there are already offers on that place... which could also be another reason that realtor is steering you away... the nice thing though about a short sale is that if you find something else you like before the bank accepts your offer than you can get your deposit back and you can look at other places and put offers on other places... the key will be to make sure you back out prior to the bank's acceptance if you want it back for another place... another thing to find out is if there is a second mortgage on that house... if there is and it's with a different bank then the second mortgage, it very likely will never close, because both banks have to agree to the offer and how much each will get... if your offer doesn't cover both of their mortgages, it will probably never be accepted and end up in foreclosure... and very likely if there are two mortgages, what's owed on both of them is more than the full value of the house... because they got the second mortgage before the house value dropped and now something happened and they can't afford to pay for both mortgages anymore and that's why they're having to short sale... does that make sense?

anyways... it's not a fun process... tho, it did work out in the end for us... my realtor was a friend of mine and she fought like crazy for us... she would have never done as much work as she did, if she wasn't like family to us and we were just someone who called her that she didn't know and love and care for, kwim?

 

[heathergw]

"Short sale or not, if a person doesn't leave it in the condition that is expected, you don't need to close. But if you sign an "as-is" addendum, then you're accepting it regardless of condition"

short sales are always "as is" because the owner can't afford to pay the mortgage, let alone fix anything... just an fyi... I've never run into a short sale that wasn't, even the houses that were in good shape and it was only because the owner was moving out of town and couldn't sell the home previously...

 

[misfitinmn]

i think he was more referring to the fact that it needs to be the same "as is" that it was when both parties entered into the contract, not meaning that anyone would be fixing any existing problems. referring specifically to the situation where the previous owner destroys the property before closing happens.

 

[eranslow]

it definitely sounds like you need to find another realtor - one that actually listens to you!

and what I know about short sales - they take a LONG time to close. Like Heather said the bank tends to sit and wait for a better offer. From my experience short sale properties aren't trashed like many foreclosured properties - mainly because short sales are so much better for the seller. they don't have a reason to trash the place. (foreclosures are on your credit record for 10 yrs and you most likely can't buy a house until after those 10 yrs - really tanks your credit # while for short sales it's only on your report for 3 yrs and your credit doesn't take a beating). but they won't fix anything up.

anyways - that is what I know about short sales Good luck with your house hunt!

 

[mummytothree]

I'll second (or third) the notion that they can take forever!!! When my brother was killed, he had no will and no "heir" old enough to take over the house....it needed to be short saled to liquidate it and get the estate "finalized". It took 18 months for the bank to approve a sale. And it was in perfect condition!!! Crazy!!!!

Good luck Jessica...I hope you all find your dream house and get to begin a fresh start very soon!!! :hugs:

 

[jessica31876]

Yes Sara I realized short sales are sold as is that is what I meant is if we make an the an offer and the bank accepts the offer so all we would have to do at that point is sign the paperwork and have it all notarized etc. and the house is in excellent condition at the time of sale but then when we go to move in we find hat they had caused significant damages after it was purchased but before we moved in what would happen af that fime?

 

[KateD]

Ours wasn't a short sale, but we made one final walkthrough of the house about an hour before closing. I think that's pretty standard.

 

[misfitinmn]

If you have already closed on it and they cause damage before you move in, you'd probably have to involve the police. If it's between entering the contract - them accepting the purchase agreement - and the time that you close on the property, you don't have to close if the house is not in the same condition it was when you made the offer. Obviously it is clear that I am not the person in my family who is in the real estate biz since I am terrible at explaining. I should have left out the "as is" part of my husband's comment, I think that was confusing.

Or maybe I should not try to make any sense of all the rubbish floating around in my brain as I think I am being counterproductive now.

(Oh yes, and there is usually a walk-through inspection just before closing!)

 

[Nettio]

If you really want to go the short sale route, I'd advise finding a realtor with a lot of previous experience with short sales. We sold our house in Colorado as a short sale and it was actually a pretty smooth process because our realtor knew what she was doing. We'd actually planned to rent it - it was her idea to sell it as short sale since we were military and had no choice to stay.

The real issue with short sales is the banks are SLOW. We put the house on the market in July, had two offers by the 1st week of August but it still took until December to finally close. And because it took that long, we kept having to turn in updated paperwork because they considered it not current by the time they finally looked at it. Our realtor stayed really on top of everything for us but I imagine some realtors don't want the hassle and that is why they'd try to steer you away from a short sale. You also can't negotiate price at all - the bank either takes or leaves your offer and the seller has no input.

I wouldn't worry about someone trashing the house. Foreclosures and short sales are totally different - a short sale isn't someone who's been forced out of the home. They've just managed to get the bank to agree to sell it for less than they owe. We had to turn in a ton of paperwork including a letter explaining our reasons for selling before the bank would even agree to it.

 

[nun69]

I don't know anything about short sales, but I know our neighbors {2 doors down} have their house as a short sale and from the time the sign went up in the yard (it was after they moved) one of those realtor locks was placed ont eh door and it was locked up tight. So I would guess at some point if the original owners weren't living in the house and it is a short sale, then it would be trespassing if they went back on the property but I don't know for sure. I do know that there were a couple of houses on our street that were short sales (people bought the houses here when the market was very high before we moved her ein 2010) and 2 of them just sold and were actually in excellent condition. I was pretty surprised.

 

[heathergw]

Ours wasn't a short sale, but we made one final walkthrough of the house about an hour before closing. I think that's pretty standard.

yes... we had a final walk-through prior to closing... so if the house is trashed, then you just won't close on it


the seller of this house left a ton of garbage and some nice tools and stuff... ours was a fixer upper so when we had the huge trash container... we tossed a ton of that stuff... but kept a lot of the tools that were left in the garage

 

[Nettio]

I don't know anything about short sales, but I know our neighbors {2 doors down} have their house as a short sale and from the time the sign went up in the yard (it was after they moved) one of those realtor locks was placed ont eh door and it was locked up tight. So I would guess at some point if the original owners weren't living in the house and it is a short sale, then it would be trespassing if they went back on the property but I don't know for sure. I do know that there were a couple of houses on our street that were short sales (people bought the houses here when the market was very high before we moved her ein 2010) and 2 of them just sold and were actually in excellent condition. I was pretty surprised.

We had a lock box even when we still lived in the house and it was just so the realtor could show the house without us being home. With short sales, the owner still owns the home, not the bank like with a foreclosure, so until it's closed on, they'd still own it.

 

[jessica31876]

see the reason I am wondering about these short sales are the first one I really liked we were going to go over the weekend and the people told the realtor they would be out and the dog would be out all weekend. But the dog is this little bitty sweet dog. Might weight like three pounds LOL. ANd the realtor says they do that alot so its almost like they do not want to do short sale? And it has been on the market for 200 some odd days.

The second one that my husband wants to see that is only 1/2 miles from the guy who caused the wreck in July the realtor has contacted him, she has contacted the property owner and she has contacted the listing realtor. Apparently the guy is staying there and the lady who owns it just up and left and she wants to just do a short sale but the guy living there will not return calls to the realtors so they can show it.

So that is why I was wondering if the short sale is more or less lke a forevlosure because the people living there do not seem to happy to have their home for sale or have us there. We are still looking. I would just like to have something found and have us moved befoer school starts in August,

 

[Kara]

No advice, but I hope you find something soon that works well for you!

 

[misfitinmn]

Jessica, do you know anyone who could refer you to a realtor they've had experience with? It might be nice to hook up with a realtor and tell him/her what you're looking for, in what area, and then let them try to find you a list. You can look at houses and say what you like/don't like and a good realtor will be able to pull that criteria into searches and find you a house you may not have found on your own. I don't think you'd have much luck getting a short sale closed by August, unfortunately.

Wishing you lots of luck in your house hunt - it's a thrill but it can be sooo aggravating, too!

 

[Ainsley]

Navigating a short sale can be complex, especially when you're aiming to move closer to family and want to avoid starting fresh in an unfamiliar area. It’s important to understand that in a short sale, the bank, not the seller, makes the final decision, often aiming to recoup losses without foreclosure. For more details, you can visit this article. However, sellers can sometimes influence the process, and buyers should be cautious of potential issues, like the property's condition upon sale. If your realtor isn't aligning with your preferences, consider seeking someone more responsive to your needs. Moving closer to your daughter while staying within a reasonable distance of medical services is crucial, so finding the right property and agent is essential.