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What do I need to know about short sale?
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Hello, I am a first time home buyer looking to purchase a home out of my home state. I found a home I love but it’s short sale. I did some research on short sale and I have a few questions.
- As a first time home buyer looking to purchase a short sale home, do I need someone to represent me? Or can I just use their realtor and have them pay the costs?
- If I do need someone to represent me do I need to sign the brokers agreement?
- Besides taking an extremely long time to purchase a short sale what are other cons? Everyone is telling me not to touch a short sale home...
- If the people living there vandalize the home or refuse to get out what are my options?
Any personal experiences would be very helpful! Thanks so much.
Top Comment: Shorts can be good if you don’t have a timeline, otherwise they can suck. You’ll make an offer and hear nothing, for months. Then you’ll get “we need your best offer today “. Then hear nothing, for months. Then you’ll get something like, offer accepted if you can close by the end of the week. Everyone I know that has been through a short said they would never do this to themselves again. But if you have the time 🤷🏻
HOLY SHIT! BBBY Short Sale Volume compared to GME. : BBBY
Main Post: HOLY SHIT! BBBY Short Sale Volume compared to GME. : BBBY
From your experience, what are the pros and cons of short sales?
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Hey Reddit! My fiance and I found a house we love. We looked at it yesterday, and the realtor told us it's a short sale. She explained it to us a bit, but I was wondering what your experience has been with short sales. We have 7 months until we get married, so the fact that short sales tend to take a while isn't a turn off. Thanks for any info!
Top Comment: Well, I've been in many short sales. The main problem there, is not the time it takes. The main problem is that after all you might not get the house at all. Short sales are famous for taking a long time and not being able to actually close in the end. The seller needs to go to the bank and get a ATP (Approval To Participate) letter from the bank. That letter will have a $. It almost doesnt matter what price they are selling if they dont have that. Because the bank won't approve it. Once the bank give out that letter, the seller needs to prove that he is in a hardship situation, and that he will get foreclosed otherwise. This is actually really hard to do, because sellers think they have to do nothing, and often are not motivated to fill vast amounts of paperwork that will result in no cash in their pocket. If I was in your place, in order to proceed with your short sale buying, I would: See if the sellers already went to the bank and got the ATP. If not, you should offer and be on them to get that in the next 15-30 days. That is what takes most of the time. VERIFY IF THE SELLERS REALTOR HAS ENOUGH SHORT SALE EXPERIENCE. SO THAT YOU DONT WASTE YOUR TIME. Are the realtors up to work with a shortsale? They will say yes, but if you feel like they are not super sure, or "prefer" to do a regular sale, they might not put enough effort on it. Would the realtors feel comfortable with you talking directly with the seller? Because the realtor back and forth will delay it even more. You need backup plan, and I would recommend to put the offer in and keep looking at other houses. That said, your realtor will be not happy to do that (because it is more work for them) https://www.youtube.com/watch?v=7yAIMwIGJ7Q If you are going to read only one thing read this: That is why realtors hate them, because they do all this work and don't get paid. And because they don't do them often, they are not experienced to actually help you, which will make it harder to actually get it closed and done.
Considering buying a short sale
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I am looking at houses with my husband. We currently live apart as he started working his new job, and I am staying in another state with the kids with my parents. We are seasoned homebuyers, this would be our 3rd time purchasing and are in a good financial position.
We have our eye on a listing that is very attractive, and the house looks in good to great shape, been listed for 2 months . The listing price has already dropped 40k (from 629 to 589k) and we were hoping to go at it for a little less than this. The listing said motivated sellers, bring all offers. Our agent says it’s a short sale, and that the deed of trust says 547k. We’re a bit scared of the unknowns with a short sale, particularly how long it could take.
Any advice on the situation? Is it worth pursuing? If it seems like the bank would agree in a reasonable time, we may go for it, but this is a situation we’re not familiar with.
ETA: our agent said it’s also a reverse mortgage house
Top Comment: There are different stages to short sales and there are a lot of variables to consider because every buyer's situation is different. Yes, the biggest unknown is what the bank is willing to let the property go for. So much can happen within the timeframe while waiting to hear an answer. Years ago when I used to go under contract for short sales, I would have to tell my buyers that it could take 3-9 months on average just to hear anything. The main question I would ask is if the current price is bank approved. More than likely it's not, but if it is then it can save you months of waiting to hear an answer. It could be as fast as a normal close if it is. If it's not then see how far along the process they are. So many people don't look into it but there are listing agents out there that start the process a lot sooner because they know the process from start to finish. At the end of the day, I would come in at a price that I would be happy to pay and see how the bank reacts. It could take a long time to hear anything, but if you're not in a hurry and have extra finances to make any repairs/updates, then it could be one of the best investments you'll make.
Short sale
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Hi there,
So I have to do a short sale on my house. It appraised for $300k. I owe like $320k ish. I’m in the process of finding a realtor. I found one and she told me that short sales are very rare and she hasn’t done on in so long. She said she saw it a lot during Covid but now rarely. It honestly has me feeling worried.
Top Comment: Broker here and licensed since 2006. Went through the crash. Find an agent that knows short sales. Period. Title company handles the process with your agent. Get them involved. Your agent should know this. Start the process before you list your home. You will need the following: Hardship letter. Explain why you need to short sale. Financial documents such as tax returns, pay stubs, bank statements, investment/401k statements. Bills. Utilities bills, credit card bills, medical bills, tax statements. Your Realtor’s market analysis detailing value and showing comps with adjustments. As well as a market report as to why the homes value is short. If possible, get a short sale approval from your lender before you list. This lets potential buyers know you’re cooperative and the buyer may not have to wait 3-6 months for the bank to approve the sale. All offers will go to the bank. They are essentially selling the home and must sign off. Your agent should have you sign a short sale addendum and attach it to your disclosures. Never agree to a short sale unless the bank is willing to write off / waive the deficiency judgement. They WILL send you a 1099 on the deficiency amount as “income” but they will not be able to file judgement against you for that amount. It’s a long process and your agent needs to be proficient in short sales and have a title company partner that will get involved. In summary: Get all your documents ready and prepared. Some title company’s and agents have check lists of the items required. Submit your short sale request before you list and let buyers know you have started the process. Hope all this helps.
In active foreclosure.I am diligently working for a short sale,do I still have time?
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My house has been on the market since August 2024. I received many offers ,about 15. In addition, I have received many offers from agents saying they would take over the delinquency and then transfer my title out of my name in a few months. It sounded sketchy. I really didn’t know how to think of that.
It’s been a really hard process. I’ve been getting a lot of low balls. The highest offer I received was 165K .Once my bank did the numbers I am expected at least have 175K . I’m requesting a short sale because I’m so close to my auction date. I haven’t gotten any offers higher than 165K.
I may be a little confused on the new legal terms and jargon . I don’t understand how I can’t be considered for a short sale . I’ve submitted a letter. I’ve been very thorough with my lender, letting them know that I’ve been trying to sell this house that I’ve got many offers. I really do not want to go into foreclosure.
Can someone help me understand this process a little better? My agent has done a wonderful job trying her best she hasn’t seen very many short sales in the past 10 years. We hired another law agent to help us come up with the preliminary CD.
Do I have time? Will it be very hard for me financially in the future? Is this the normal process for a short sale? Any information can be helpful.
Top Comment: Let’s start with what a short sale means. It means that the bank will be “short” money at the end after closing costs. That’s why they get to approve the transaction. To persuade the bank that it’s in their best interests to lose money, they will want a bunch of financial information from you showing that you can’t continue to pay the mortgage, and you can’t pay the difference between the offers you are getting and what the bank is owed. If the number the bank says seems high, remember that it probably includes some late fees and other penalties. The one thing not at all short is the amount of time it can take to get approval. Meanwhile the foreclosure department of the bank doesn’t necessarily communicate with the short sale department! Since your agent seems a little rusty on this kind of transaction, suggest (or insist) that she involve her broker. Like today.
Short sales: are realtors just being lazy about it?
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First time poster here. Be gentle.
We are looking for our first house and we are getting fully pre-approved for a large amount. Found a house that is a "short sale" for 50K under our maximum. I'm not afraid of some TLC and renovations. However, when I called about this house, two realtors essentially said "It's impossible to buy the house" and "stop looking to short sales."
I know that I don't know anything about the ins and outs of short sales, but what bothers me is the attitude of "It's impossible" and "don't even try." The approval process we are going through is so that our offer is 'as good as cash' so why just give up on a house before we even ask?
I suppose this is a rant, and a question of 'what do i do?' Do I find a new realtor (not under contract)? Should I just give up? What exactly does make buying a short sale home so impossible for the average guy?
Moving sucks. Buying a car sucks. I hate this more already.
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Seller didn’t disclose short sale? What to do?
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Trying to buy my first house for the family. I put an offer on the house about 50k above asking with contingencies. Seller accepted offer and none of the disclosures stated anything regarding liens or short sale(is it suppose to be in there?). With the only thing the seller wanted was the loan being able to be underwritten within 10 days which we were able to do. Escrow was opened and EMD placed with an estimated closing date of 10/11 but then it had been silent for awhile.
Turns out seller is trying to get approval from his lenders? So this was a short sale but I can't find anything in my paperwork stating it was and we did the inspections and put the money in escrow. Can I pull out and get the escrow back? Any chance I could also get the inspection money back because it seems like this wasn't done in the order it should have been?
Appraisal came in at $33k above our offer so it doesn't seem like we are saving that much anyway? Technically I don't have a strict timeline. Living with family on a month to month. But I don't know what to do.
Our realtor has essentially been hounding the seller's agent and got a response from them saying that got approval from the beneficiary to agree on the deal (don't know what that means, who is this person in relationship to house) and they are hoping to get to signing this week (this was on 10/30, so that week has passed) and now silence again. I know that short sales can basically go from 0 to 100 on movement from my reading online but I am annoyed and irritated and don't know how close it is to being done or if I just want to pull out. Not sure if I can legally back out without losing earnest money?
As far as the condition of the house, it's generally pretty good. Does need some upgrades/renovations and a couple of fixes but otherwise can be livable within a week worthy of repairs.
Top Comment: If the beneficiary (the mortgage holder) has approved it, why does it matter to you that it is a short sale? "Short sale" just means the mortgage holder will release its lien for less than the full balance owed. It has nothing to do with you.
Any short sale success stories?
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Husband and I just put an offer in today on a great home listed as a short sale. It basically feels like our dream home. I would have bought it at full price to be honest. We and our agent were feeling pretty positive about it... However, I just came on here and read about all the cases of people being stuck in an neverending waiting game on short sale houses. Has anyone ever had a positive experience with a short sale? Trying to get an idea of how far down I should tamp my enthusiasm...
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Short sale or walk away?
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Hi,
New to being a member of reddit, though I've looked up things here many times; including how to manage my current predicament.
I bought a condo in 2022 in the Pacific Northwest. The building needed some repairs, and I was advised that a few insurance claims would take care of that. In July, I was assessed a $50K special assessment for my unit which is part of a $3.2 million dollar assessment across all owners. It passed in a vote. Many of us voted no. I tried to fight it with a lawyer, no luck. I signed on to a large loan the bank gave to the hoa for most all of us who couldn't pay $50K up front by the October deadline.
My condo isn't worth the $350K I paid for it anymore. Comps show it at $315K. Ish. And nothing is selling around here. AND. This won't be the last assessment. That's been rumored. I'm in a sink hole.
A new lawyer has plotted this next strategy: Stop paying my mortgage and list it for sale. It will be a short sale and he'll negotiate that. I'd have to dip in to my 401K (I'm no where near retirement age) to pay the assessment to get the lien off the condo, which will result in an additional tax burden. In the end, I'm out my down payment, I'm out money from my retirement, and I'm out about $13K in taxes. Probably $85000.
What if I just walked away? The bank can foreclose, the hoa can foreclose. Yes-It impacts my credit score. It's a civil not a criminal manner. But it would keep me from losing $85000? I understand the bank or the hoa can come for me. Could a lawyer help me then?
Appreciative of any insight. This has kept me up at night for 5 months and I feel like doing the right thing like I've done my whole life is just going to keep costing me $$.
Top Comment: If the bank forecloses, you'll still owe the HOA fees and whatever the bank can't recoup from the sale. Foreclosure does NOT get you off the hook. Plus there's the whole credit score thing. Go with the short sale.