Home Buying in 63129>Question Details

michael boet…, Home Buyer in Saint Louis, MO

how do you buy a house that is going to be a short sale?

Asked by michael boettigheimer, Saint Louis, MO Thu Jan 17, 2013

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9
With a lot of patience - if you need to move by a certain date, dont consider a short sale. My last 3 that got to successful closings took 8 months for the bank to respond after we sent in the contract offers - I have a colleague who had one take 14 months.

Understand that you are buying "as is" neither the lien holder or seller will fo any inspections or repairs. Your lender may not allow use of an FHA or VA loan because they may presume the home has issues (if a seller cant make mortgage payments and knows he will lose his home one way or another, there is no incentive for him to do preventive maintenace or repairs. Typically you can use sn FHA 303k rehab loan.

If the municipality requires an occupancy inspection to get an occupancy permit before you move in, a few sellers will let you do that prior to closing, and even fewer will let you actually fo the repsirs prior to close BUT you do them with the upfront knowledge that the sellers bànk in the middle of working thecshort sale can put the home in foreclosure at which point you lose all the money, time and effort along with any materials you've put into it

I have just touched on a few items here that you need to know - I highly recommend that you sit down with your Realtor and discuss the pros, cons, timelines, and expectations of dealing with short sales
1 vote Thank Flag Link Fri Jan 18, 2013
Great previous answers. Here are some other tips:
1. Have a buyers agent do a market analysis to determine market value at market condition.
2. Have a professional inspection on the property before making an offer (if there is time) and bring your contractor. Have the contractor give you estimated pricing for improvements.
3. If you really want the property, make your best and final, educated offer, don't mess around with low balling an already low price. You are in a different buying atmosphere...in competition with other buyers who would/should/will be making their best offers.
4. Your offer can not be contingent on selling your current property. Banks won't wait for you to sell your house, so be ready to buy when you make your offer.
5. Seek out properties that are 'approved short sales' to improve your purchase success. Using a knowledgable buyers agent will help in asking the right questions. Just because a seller is 'upside down', wants to short sale, and/or can't make his mortage payments doesn't mean the lender will approve a short sale.
6. Understand that the seller has to accept your offer and then their lender has to approve your contract. The seller may accept, but the bank may reject or counter for more money. This process can take a long time.
7. The bank doesn't care about anything except the price to cover their loss and the strength of the buyer/ability to complete the purchase.
8. Work closely with your agent to decide and define acceptance time. You will want to be able to get out of the contract and move on if the process is taking too long or you find something else or change your mind.
9. The bank will not do any repairs or provide any inspection so don't ask or expect them to.
10. Your strongest offer, and best chance for getting the property, is the highest price, CASH, AS IS, only an inspection contingency, pre-approval letter or proof of funds, flexible close date. No special requests or requirements. The cleanest offer with the best price will win the contract.

To search for short sales and foreclosures log on to http://www.WestStLouisCountyHomeFinder.com
1 vote Thank Flag Link Fri Jan 18, 2013
0 votes Thank Flag Link Sun Apr 14, 2013
Short sales are never short so be prepared for a long wait. I would start by looking for an agent with some experience in short sales. We can all give advice but an agent will guide you through the process.
0 votes Thank Flag Link Thu Jan 31, 2013
Hello Michael, Thanks for asking! Short sales are some of the best deals on the market. It takes patients and perseverance. 1st finding a Realtor that understands the sale with experience to guide the transaction to success. There will be pit falls along the way, stay focused on the benefit at the end!
0 votes Thank Flag Link Fri Jan 18, 2013
Michael,

Basically you make an offer to the owners of the home. Once you have reached an agreement, the owner needs to work with their lenders to see if they will approve the purchase price. it can take several months for this to happen. If the home has a second mortgage, the process becomes more complicated.
0 votes Thank Flag Link Fri Jan 18, 2013
Many steps, the lender will have the final say. If you need assistance with this, feel free to call me. In most all cases, the seller will pay my commission, not you. Also, if you need help with pre approval, I can help recommend. My number is 314-540-1978.
0 votes Thank Flag Link Fri Jan 18, 2013
Michael as it was mentioned by the other agent, Short Sales are a thing that occur daily. They take patience and understanding. Banks work on their time. Most short sales are not pre-approved by the banks, therefore it takes longer, anywhere from nine months (all banks are different) some are faster. Working with an agent is a must. I have information sheets I give my client to help guide them through the pre-process period. vernae@gmail.com
0 votes Thank Flag Link Fri Jan 18, 2013
Traditionally, you work with an agent and you write an offer and submitted it to the owner. From there, the owner will pick an offer and then it gets submitted to the bank. Once the bank approves it, then you are good to go. These transactions can go on for months so be prepared to have patience.
0 votes Thank Flag Link Thu Jan 17, 2013
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