Short sales

The BBQ Pit
1

My wife and I have worked hard saving for a house, a home of our own, where we can have the freedoms to live as we choose. She has stayed by my side through multiple overseas military deployments and accepted the financial discipline needed to accumulate a large down payment for a nice slice of suburbia. The shit we went through to earn this large sum of money makes me question many aspects of life and myself.

While friends of ours took on car loans, we kept the cars we paid off less than two years after their purchase. They took out second mortgages to pay for new swimming pools and landscaping. Boats, jet skis, plasmas in every room? Sure, why not. Another friend had an interest only loan, telling me that “…home prices can only go up!”

Not us. We saved. There are many things we chose not to indulge so we could keep the money instead. No children, pets, cable television, iPhone. Acccoding to my parents, Kiplinger’s, and USAA my wife and I are doing it The Right Way.

Many of those same friends are in a self created world of stress and pain right now while we are finally ready to purchase our house. They want US taxpayers to rescue them from their own greed and stupidity, which will unfortunately probably happen.

Meanwhile, we met with a nice realtor that USAA set us up with. He set up a client access through listingbook.com and told us how to use it. My wife and I set our search criteria and came up with a list of 295 homes for sale. Of those, about 270 are short sales. Both the homes we recently visited were short sales.

I almost feel like I had it all wrong, that years ago we should have purchased a house with zero down, 105% financed like so many others.

Pit worthy topic? I don’t know.

But fuck this whole real estate boondoggle and it’s future implications, fuck irresponsible home buyers who took on unrealistic debts levels, and fuck the short sale process that we will likely have to deal with.

2

So, as I understand it, you are about to purchase a house from someone for less than the outstanding mortgage on the home. This is bad for the seller, since they lose their hosue, and not so hot for the bank, since they lose money, but at least it avoids foreclosure (and further money loss for the bank) and a crappy credit rating for the seller.

Where’s the downside for you though? Why are you complaining? You were responsible and saved your money. You’re now buying in a great buyers market, and getting a house for much less than you would have previously. You’re a winner. Why complain?

3

Ditto. What is the problem for you?

4

Euphonious, I don’t know why I am complaining. You are correct about all of it.

Yet I am still frustrated about the totality of it. The bank gets screwed, the home’s owner now gets to rent like I chose to do, and the next generation or two get to pay for it all.

Yeah, we did it right. The market is closer to where it should be, we have the cash and the credit. Long ago I promised my darling wife a home of our own, without stressfully large debts, and now the reality of the short sale process is sinking in.

We spent too many years apart from each other to earn a dream and I was blind to the current real estate market and the difficulties of buying a short sale home. We thought it would be easier than this.

Maybe I am complaining about my false expectations. I pit me?

5

What are the difficulties of buying a short sale home? Why can’t you just limit your search to the non-short sale homes?

6

Are you upset about the paperwork process of it? If that is the case, I have never heard of any home purchase being a pleasant experience.

7

Well, he did say that most of the ones listed in his area are short sales…

And in doing some research I see that both seller and bank must consent to the sale, and this consent can change at any time. This change can waste time for buyers who thought they were going to buy the house. Money spent on inspections etc. can end up being wasted if the seller or bank changes their mind.

8

Isn’t that true for normal sales, too?

9

You say “gets” like it’s a benefit. The old homeowner is totally screwed. It’s only a god thing for the new buyer, i.e. you.

What part is bad for you, exactly?

10

I wouldn’t necessarily feel too bad for the banks that are “getting screwed”, as they are the same banks that oversold low-doc and no-doc loans in the first place. It’s their bad business and loan practices that got them in this mess, now they have to take the hit. I don’t pity them in the slightest.

11

This is possibly the second most boring pit thread ever. No one even understands what the fuck you are bitching about, other than some shit about “future generations”.

Just shut up, you wanking priss.

12

I don’t get the whole “people who bought overpriced homes to put their kids in are greedy meme”. In my area, at least, the home prices were bid up mostly by people who were speculating. Sometimes they lived in the area, others did not. This was facilitated by greedy banks and some unscrupulous mortgage practices. But the people who just bought a house at the wrong time were often desperate to purchase a home before the housing prices climbed out of their range. They may have expected, perhaps unreasonably, that they would have more future income. Many people who are short selling have lost their jobs and didn’t foresee the whole economy collapsing. That’s possibly shortsighted, but scarcely greedy.

The homes prices in most of our area went down by 25% since the housing crash. We didn’t buy our house to get rich, we bought it to have a stable environment for our kids to grow up in within a decent community with decent schools nearby. Buying a house with 20-30% down is not a greedy thing to do, it is fairly normal during my lifetime. But in my area, if you did that in the past five years you probably have close to no equity. If someone lost their job then there is a good chance that they’d need to sell or abandon your home. That’s unfortunate, not greedy.

13

If anything the short sale process should be pitted here. Short sales aren’t like regular sales. The bank that owns the house collects offers, and in weeks or months decides to pick the best one out of the lot and maybe accept it. I say maybe, because they can change their mind at any time. They can re-neg on their acceptance of the offer, with no consequences. It’s totally unreasonable. If I tried selling my house like that, I’d never get it sold, or possibly sued. Here’s my last home buying experience. This was a year ago.

90% of the homes I could afford were short sales.
First offer I put in languished for 3 months before I said fuck it and withdrew my offer.

Second offer on another house was met with… no response. The realtor never even called my realtor back.

Third offer, the selling realtor kept hemming and hawing, wanting to know more about me than I think the selling agent has any right to know. He wanted to know my ability to pay. So the fuck what? I was approved and money in hand. I finally pulled it off though.

Man, fuck short sales.

14

Between TARP, auto takeovers, home mortgage rescue programs, etc., this isn’t exactly the era of personal responsibility in this country.

Congrats on all your hard efforts to be in this position. And of course thanks for your service.

15

Who are we supposed to be pitting here?

People who lost their homes by over extending themselves with pools and interest only mortgages?
The banks who lost money by offering credit to the unworthy?

Aren’t these the consequences of their actions? I thought the rule was, you play, you pay.

So, what, you don’t like the short sale process? From the sounds of it, I don’t either, sounds like it sucks all the way around. So don’t buy one. Tell your realtor only show us regular sales.

You waited this long, and swam against the current to get where you wanted to be, why stop now?

Just say no to short sales and wait it out. I’d wager you say ‘no short sales’ and your realtor changes his stripes, and if not, find another realtor. I promise there are plenty sitting on their duffs right now, dying for prospects. Get out there and find one!

16

We made an offer on short sale back in early October and though the sellers accepted, the bank has only responded by telling us it will take them another 4-6 months to respond. According to our agent, only about 10% of short sales make it all the way to escrow, so everybody hates them: buyers, sellers, realtors, banks, me and the OP.

But yeah, since we’re on the buying and not the selling end of the whole mess, I’d say our irritation is more in line with a MPSIMS rant.

17

Congratulations for your hard-earned position in today’s buyer’s market. You are in a small minority of those who didn’t buy into the idea that debt is wealth and you have your reward. The others followed Wall Street into doom, bought beyond their means and were left holding the bag for the big bank bailouts (along with you, of course).

I think that short sales are pretty much a win-win for all involved unless you’d rather shop foreclosures.

18

At least now I understand why a buyer would want to pit short sales.

Some people who’ve lost their homes were responsible with their finances, though. Pit the unemployment and under-employment rates, too.

19

You might be right. I remember last month when you started the FIRST most boring one. :stuck_out_tongue:

20

It is, and even if there are NO surprises and everything goes right, the paperwork is a nightmare.