Glad to know I still hold the title.
Bingo.
Rather be renting?
We’re in the process of trying to buy a short sale. We have “oral approval”, just waiting on more paperwork. Or something. We’ve had an offer in since October, the home inspection was last week, we locked in our mortgage rate, BUT we’re still waiting to close.
The process is a pain in the ass, you have no certainty of when you’re going to close, you’d think the bank wouldn’t want another forclosure on their hands BUT NOOO they’re going to jerk you around cause they can. If they think they’re going to get another offer in this market at this time of year, they’re sadly mistaken. This market is saturated with houses, and almost everyone in our price range with the features we want is a short sale. Screw speculative real estate, screw mcmansions, screw everything, whatever.
Well the short sale shit causes other problems too. We looked at buying a new home in the area for over a year. We bought our home, a townhouse, four years ago at 400K, it’s 38 years old now. We did the right thing and put down 90k. We’ve also paid off another 20k or so.
We’ve come in to some money and have money on our own, we found a place we’d like to buy in, looked at a lot of houses. We can’t afford shit. If we want a single family house, it would cost us 500k+, and at 500 we’d have to put a lot of work to bring it up to date.
We wanted to sell our house as well, the best we could probably hope for is 290k or so. We owe that much on it. Our Realtor told us that in order to sell, not only would we not get any more then that, we’d have to put in all new carpets, paint the entire house, and that’s about what we could hope for, maybe. We’d have lost a good 30%+ of the value of our house because of all the short sales in the area. Single family homes though are still what they were 2-3 years ago, no one budges really. We keep getting told that single family homes haven’t gone down much in the area.
So yeah the short sales suck because they drive the selling prices down, but not taxes :mad: We’ve lost a shit load of money, and we can’t afford to buy a house because of it. And we’re the type of people that are supposed to be able to, save a lot of money, find where we want to live, all that type of stuff. The funny thing is that the Realtors still haven’t figured it out. Ours kept trying to show us houses way out of our price range. Yeah we might have been able to afford the 750k house, but we couldn’t even go out to dinner once a year since we’d be so house poor. Idiocy all around.
There are lots of disadvantages for buyers.
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The banks typically leave the house on the market for awhile and take blind offers. As such, it’s really difficult to know if your offer is likely to win or not without taking a substantial risk of overpaying.
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When you have an offer in on one house, you can’t put an offer in on another (I tried this). So you’ll have to either retract your offer and start over if you want to bid elsewhere, or just wait on one house.
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A lot of short sales never reach sale before foreclosure, starting things all over again. Because other parties than the mortgage holder can have liens on the house, this happens a lot. Everyone involved has to agree on your bid.
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If the bank accepts your offer, they close super fast (I was told within a few days). Hope you’re ready to drop everything at a moment’s notice after sitting in a holding pattern for months just on the chance you’ll get it.
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Because you don’t know when (or if) you’ll close until very very briefly before it happens, it’s difficult to manage other living arrangements. Unless you have a month-to-month lease or are willing to carry the financial burden of a second place, this is a big deal (and ultimately why I had to abandon looking at short sales). If you own a home, you can’t really go too far in trying to sell it since you may end up with no house at all.
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While the house is sitting there languishing and waiting, it’s not being cared for over months and months.
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You’re not negotiating one on one with another individual or family so you can’t negotiate on much. When you’re buying a home from an individual seller, you can often negotiate for stuff other than plain cash, like extra appliances or services or home warranties. When I bought my home, I not only negotiated the cost down, I got money towards my down payment, a home warranty, a deep freezer, and a bunch of other neat stuff that wasn’t officially included.
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You risk putting out cash for inspections, etc. and things falling through, and the bank has much less of a vested interest than an individual homeowner in not getting things to fall through. After all, if they get another buyer that pays slightly less, they could still attempt to collect outstanding money owed from the debtor.
I’m sure there are good deals to be had, but unless you’re in very special circumstances, you stand to risk a lot too. The price advantage can quickly melt away when you consider the negatives.
Strangely unmentioned in the wiki.
Happy renter here. Pit dem shorts.
I just had a great idea!
Limit your list to houses not being short sold.
Problem solved. You are welcome.
From the OP:
Great idea! Just forget about 91.5% of the homes for sale in the area! I’m sure this will lead to them being very satisfied!
Exactly! Because if short sales are so annoying you don’t have to buy them! Even if they are 99% of the market! And the reason there are so many is that the market is flooded with cheaper homes being short sold! But you don’t HAVE to buy one…you don’t even have to LOOK at one!
It’s a FREE country!
Now you are catching on! Keep trying to get your mind around it!
Here’s a summary:
You can get a house the bank is more anxious to sell, and take on the short sale hassle, or you can buy a DIFFERENT one not involving that hassle!
Sorry for the exclamation points! I get all excited when people grasp the concept of CHOICE as a way of eliminating hassles they complain about!
Thank you.
Well, look at it this way: you could have bought a house sometime in the last two years, and now be looking at a 5-year wait before the paper value of your home again matches the price you paid for it.
On the other hand, I can’t complain too much - if we’d bought in 2007 we’d be really screwed.
When I was looking for a house one of the criteria I put in my search was a price range. I’m sure the OP did that as well. How many of that 91.5% homes listed as a short sale do you think would be there?
Here’s part of the problem with short sales. (This is not to make you feel sorry for the banks, by the way, it’s just an explanation.)
[ul]
[li]Loss mitigation departments are completely swamped right now. They don’t have enough people with the training and experience to handle the case load. So the people who do know how to approve a short sale have their desks stacked high with short-sale proposals. [/li][li]There is very little standardization in the short-sale field. Unlike REO sales (which have fairly standard policies and procedures from lender to lender) short sale requirements are all over the board.[/li][li]Not many real estate agents know how to handle short sales, or put together a good short-sale proposal. (Does your agent know how to fill out a HUD-1 to show the sale as short, for example?) Agents are starting to venture into the field, but there is no good standardized training out there – and besides which, things are different from lender to lender. So you end up with agents submitting incomplete, inaccurate, and disorganized short sale packages, which the overworked loss mit person has to wade through to find the odd one that is complete and makes financial sense. This is why it can take months to get a response, and why the lender may keep requesting more documents, etc.[/li][li]Investors and mortgage insurance companies are starting to make things more difficult. They are sometimes requiring sellers (who are broke) to pony up cash at closing. Add this to the problem of getting multiple lien holders to agree to the sale, and you have a negotiating nightmare.[/li][/ul]
Yes, the lender may be trying other loss mit options, or it may decide that a foreclosure is a better option, depending on the seller’s equity, hardship, and other factors. However, a lot of the wait is not them just dicking you around because they can. It’s because very few people know what they are doing. The whole concept is new for people both within the bank and those trying to negotiate with them from outside the bank. This is why short sales can be a gigantic exercise in frustration.
If you don’t have the financial flexibility and patience to manage the wait for lender approval, then avoid short sales like the plague. Maybe try an REO sale or accelerated sale. These are somewhat easier because there is a certain amount of industry standardization involved.
The OP went way off what I thought was going to happen.
I thought…
He sacrificed, scrimped and saved then bought a home BEFORE the crash and now his savings are wiped out and friends/others bought with zero down so they could walk away with no loss.
THAT would be a tale of woe worthy of much gnashing of teeth.
However, the OP here did it right. He scrimped and saved and is now able to by in a huge buyers market. He is on top of the world.
OP…just be very thankful you didn’t buy 2-3 years ago!
Thanks for missing my point! Which was that the OP has a valid complaint about short sales! In that they represent over 90% of the houses he can afford, and it would be better for him and other buyers if these houses were not short sales! And that 90% is a pretty significant number!
Y’all have a nice day!
I will again ask. How many of these houses do you think would be in their price range if they were not a short sale?
No idea. Is your point that these houses would have been out of reach financially for the OP if they were not short sales?
I’ll give you that.
It would be good though, if there was a different process for the sales of these cheaper houses. It sounds like the uncertainty and time-lag of the short sale process is being pitted here.
Wait! Wait!
Is your point that when he filters for the cheaper houses he gets a list with more short sales because they are cheaper?! That can’t be your point, can it, because that makes no sense at all!! That’s like creating a search filter that returns houses under $20k and then complaining because they are mostly condemned and distressed properties!!
Or is your point that 90% is a big percentage??!! That can’t be your point because that wouldn’t make sense either!! You see, the denominator has grown by all the short sales!! The absolute number of houses in his price range that aren’t being short sold is the same!! In fact, it’s even larger than it would be otherwise since the short sales depress the price of homes not being short sold and bring even more houses into his price range!!
Here’s a tip!!! The OP has no complaint at all!!! He is a well-positioned buyer in a buyer’s market where short sales have further depressed the sale price of all homes and given him choices he would not have otherwise had!!!
It’s so exciting to help you understand this!!!
Have as nice a day as possible when the world is actually good but seems bad because you can’t understand it!!!
Whoops!
You dropped these:
!!!