Home Buying in Windsor Mill>Question Details

Goodgiirl, Both Buyer and Seller in Windsor Mill, MD

I am about to sell my condo as a short sale. I have not received an offer yet, but my current bank knows that I have put my condo up for sale.

Asked by Goodgiirl, Windsor Mill, MD Thu Jul 8, 2010

Would it be possible for me to buy another house before the short sale is finalized? Is there any bank that would actually give me a loan even though I still make payments on my condo? Thanks!

Help the community by answering this question:

Answers

7
Joel Maher’s answer
Trying to buy a house while going through a short sales is very difficult. Since your credit will take a hit, most banks will not give you a loan. Your best option is to speak with a lender and tell them your situation.
0 votes Thank Flag Link Mon Jul 12, 2010
Hello,
If u don't mind. I could sell instead of doing a short sale let me buy it from u for what the bank would offered in the short sale.. I have a lot of buyers and could help you out of a bad situation. Just simply let me list your condo for you and can realistically have you outta there in roughly 60days or less. Call or text in addition to responding on the message board. my number is 443 224 4579 and its on my page. I can also help you find another place we just have to focus on one thing at a time.
Flag Thu Apr 3, 2014
Wow Goodgiirl,

I'm always a little shocked when I see posts like this relating to short sales as if they are no big deal. When you purchased your condo, the bank gave you a mortgage which YOU agreed to pay in full. Now, for whatever reason you've decided that plan will no longer work for you. Perhaps the home is worth less than you paid for it. Or you want something nicer, larger or in a different location. The fact that you can afford a "replacement" home indicates you probably aren't having a financial hardship.

Now you want to ask that bank to accept less than what you promised them you would pay them for the home. Then you want another mortgage company to give you a loan for your new home when they can clearly see that you defaulted on your last mortgage?

Reality check...short sales are not a "get out of jail free" card. They are meant to be used in the case of a financial hardship such as job loss, health problems...a true inabiltiy to pay the mortgage. They are NOT given so that you can move on to something bigger and better. And they most certainy are not an entitlement.

I hope you are working with a good Attorney that can give you sound advice including the fact that if you are in a financial position to afford a replacement home then you probably will be turned down for a short sale after months of negotiating. And even IF your short sale is approved you will be left with a severely damaged credit history, you could be responsibile for a huge tax liability and/or a debt from a mortgagor that could come back to haunt you years from now. Mortgage companies are actually selling these default balances to credit collection companies for pennies on the dollar. Those folks livelihood depends on collecting from you. And the bank doesn't have to do that quickly. They could sell it 10 years from now. Long after you've forgotten about your condo in MD you phone could ring with a "time to pay that mortgage" call.

To put it in another context, let's say you bought a new car and agreed to pay $20k for it. It lost value or isn't quite as shiny a it was when you drove it off the lot. Would it be OK to take that car back to the dealer and say "I know I agreed to pay you $20k but now that I've used it some I wonder if you would accept $10k and let me buy another one from you"? The sense of entitlement is mind boggling...
1 vote Thank Flag Link Sun Jul 11, 2010
Hi Goodgiirl,

Once you receive an offer for a short sale, you will then need to submit the offer with paperwork detailing your assets and debt. If you have the means to purchase another property, the bank will not look favorably upon approving the short sale. In addition to that, unless you are able to afford both mortgages, the second bank will not extend the loan for the other house. Maybe you have extenuating circumstances that are not totally spelled out here. Feel free to email me to discuss further. I am experienced with the short sale process and also work with a group that expedites the short sale process.

Good Luck to you!
1 vote Thank Flag Link Fri Jul 9, 2010
Goodgiirl,

The answer is yes at least in theory. BUT there are pratical roadblocks to buying again right now. You may not want to do this in public but email me if you like. As a lender I would want to know why you are in a short sale now. If it's for a move because of a job transfer that is more likely to happen. Have you missed any mortgage payments? Is is listed with an agent on MRIS? And the most important question is can you qualify income wise carrying two mortgages? If you can't then the answer is no, the temporary DTI would be too high to qualify for a new loan. Notice also that no lenders answered only realtors which tells me something also.
On short sales, I don't know who is advising you so I just want to mention the impact to your credit score and possible tax issuses? Are you aware of both of these and how the affect you? The lender also has some leeway on what is placed on your credit score. You need to agree and ask what they will say. Get it in writing from them first. The IRS can tax you on the foregiven dollar amount unless you take steps to prevent it. The old lender will send you a 1099. I know this happens and not everyone knows it unti it's too late. Speak to a CPA and a good realtor if you have one. Also has the lender approved your short sale status? I know it's alot of questions but better to be asked now rather than when it's too late. Hope this helps.
0 votes Thank Flag Link Fri Jul 9, 2010
Hi Goodgirl,

I do many distressed property sales in the Baltimore area and can tell you that if you are facing a hardship that is forcing you to do a shortsale you will not be able to purchase another property and do a shortsale on the current one. Your post says you are still making your payments? May I ask why? Feel free to email me privately.
0 votes Thank Flag Link Fri Jul 9, 2010
Hi Goodgiirl! Completely agree with the first answer. I just want to add that even if you are able to buy it now, you could risk to loose it when the short sale property's bank find out. I am assuming that you don't have any equity and that you are asking for (a lot?) less than what you bought it for. Short Sale Bank approval can take forever and when they'll find out that you own another property, that will be the end of it.
My advise is not to buy it and if you are thinking in doing under somebody else name, the lender will have to know where the money comes from. Too much conflict!
Just remember that if you do a short sale, it will only affects your credit for 2 years, after that period of time, you can buy any property again.
Good luck!
0 votes Thank Flag Link Thu Jul 8, 2010
In order to do a short sale, one of the requirements is that you need to be in a hardship position. You also can not have any other assets. If you are able to afford to buy another place, then you probably won't be able to do the short sale.

As far as buying another place before your current condo sells, you will have to prove to the lender that you will be able to afford both places.
0 votes Thank Flag Link Thu Jul 8, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer