Home Buying in Rex>Question Details

Kaybug, Home Buyer in Rex, GA

buying a home that is a preapporved short sale with a fha loan. what are the chances it will past?

Asked by Kaybug, Rex, GA Mon Dec 28, 2009

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I think there is some confusion here between an FHA approved short sale and an approved short sale that a buyer is buying with an FHA loan ...

We don't know to which Kaybug is referring ... my best guess is she is looking to buy an approved short sale with an FHA loan ... that's kinda how the question reads to me ...
1 vote Thank Flag Link Mon Dec 28, 2009
Carl hit it well - every short sale is a unique situation and the idea of anything "preapproved" is largely babble. Preapproved for what? That's a wide open and liberally used term.

The appraiser will need to state the home meets minimum FHA standards - there cannot be any work required and it has to be fully inhabitable when they're out there. Obviously it has to appraise numbers-wise as well.

The appraisal is but a step - the jockeying that Carl mentioned is not uncommon and I've had cases where things go well and cases where totally illogical things happen and the deal collapses. Best of luck -

Hank
1 vote Thank Flag Link Mon Dec 28, 2009
I can only speak from personal experience but every listing I have had that FHA approved for a short sale, did close. FHA approves the short sales at the beginning of the process and then has to approve the offer that is submitted once it is sent in to them. In the past year, the time to approve the actual offer has taken longer and longer. FHA required lenders to allow sellers to list their properties and try to sell them as short sales. Sellers receive a bonus at closing for participating in the short sale. FHA will fine a lender for foreclosing on someone that is approved for a short sale and has their home listed. Even thought this is true, listing agents have to stay all over the banks and make sure that they keep postponing the foreclosure sale. Twice, I have had to get the sellers to call FHA directly in order to get the bank's attention. If you really want this home, then you may have to be patient. Be sure to ask the listing agent if there are any other liens on the property as the secondary liens could hold up or stop the sale. FHA only allows up to $2,000 to be paid to liens and the lien holders have to agree to accept this amount or have the seller sign a promissory note to pay the balance off in the future. I hope this helps!
1 vote Thank Flag Link Mon Dec 28, 2009
Should not be a problem if handled completely through the FHA process. FHA Short sales are the easiest except with Bank of America.
1 vote Thank Flag Link Mon Dec 28, 2009
Joshua Jarvis, Real Estate Pro in Duluth, GA
MVP'08
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Kaybug:

It’s a hard question to answer because there are many variables I don’t know – there are typically two scenarios here:

(1) You are buying a short sale and the transaction has finally been approved by the bank(s) or,
(2) You’ve just had an offer accepted on a home that has already gone through the short sale approval process with another buyer (who has since disappeared).

If Scenario 1 is the case, then you have a very good chance of closing. However, if the FHA appraiser finds items that need to be remedied prior to the sale, then all bets are off. If that happens, it could scrub the sale. Also, the home has to appraise for the approved value. HVCC is making that much more difficult. If it doesn’t appraise, your chances of closing are slim.

If Scenario 2 is the case, then your chances are a bit less than Scenario 1. Some banks will take the approval they’ve given to one buyer and simply transfer it over to another replacement buyer– we’ve had banks transfer short sales and it’s been a very smooth process. If that happens in your case, then the Scenario 1 explanation above kicks in.

IF they start the approval process over again, then your chances are up on the air. Other banks we’ve dealt with have started the process over from the beginning and have (i) taken a LONG time to finally close OR, (ii) for unknown reasons that absolutely defy all logic, eventually foreclosed.

Without knowing your exact details, it’s hard to provide a much more comprehensive answer.

.
1 vote Thank Flag Link Mon Dec 28, 2009
This is a hard question to answer without viewing the property.

Do you have a list of known items that need attention?

The seller most likely will not be able to make the repairs since they are already in a short sale situation.
0 votes Thank Flag Link Tue Dec 29, 2009
I read it as a short sale with an FHA loan - "buying a home that is a preapporved short sale with a fha loan" was her question. If I'm wrong then disregard my answer.

Hank
0 votes Thank Flag Link Tue Dec 29, 2009
I think Hank does not know what an FHA approved short sale is and did not read your question.
0 votes Thank Flag Link Mon Dec 28, 2009
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