Anyone been through a Short sale process?

jjaazzyAugust 30, 2011

Looking to put a bid in on a Short sale home. Does anyone have any pointers? Have you ever seen it go through? Should I put in any stipulations of time we were thinking of 30 days. Any pointers would be most appreciated.

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ncrealestateguy

Do not waste your time with putting in a time limit. The offer will more than likely end up in the trash. If you only have 30 days for a response, a short sale is probably not for you.

    Bookmark   August 30, 2011 at 9:53PM
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jjaazzy

Well not to disagree with you cause I have read old posters that said it could take months, but we spoke to a Real Estate Attorney this evening, a relative of a close friend and she said it could close in 2 weeks that the banks are anxious to remove them from the books. So I don't know maybe things are changing. Uncharted waters for sure, for us. This is investment property so were not on pins and needles but you know once you make your mind up about something you like to keep things going and finish it. I wonder if they have a buyer that is interested why they don't try and move things along. Thanks for taking the time to try and help.

    Bookmark   August 30, 2011 at 10:53PM
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ncrealestateguy

Are you sure your attorney is not referring to foreclosures and not short sales. I have never seen nor heard of a short sale taking anywhere near only two weeks.

    Bookmark   August 31, 2011 at 11:02PM
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terriks

but we spoke to a Real Estate Attorney this evening, a relative of a close friend and she said it could close in 2 weeks that the banks are anxious to remove them from the books.

I agree that this attorney may be talking about REOs (homes that have been foreclosed on and are now owned by the bank), and not short sales, which are not bank owned, so are not "on their books".

    Bookmark   August 31, 2011 at 11:16PM
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ncrealestateguy

Even if a seller can close in two weeks, that is not nearly enough time for a buyer's lender to close. They typically need 30 - 45 days once the deal is under contract.

    Bookmark   September 1, 2011 at 7:49AM
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barbcollins

I am not a realtor and I have not bought a short sale myself, but everyone that I have talked to that dealt with them said it takes months. One of my DH's cousins just bought one and it to them 3-4 months and a lot of problems. They almost walked away.

I agree I think the attorney was referring to a foreclosure. We closed on ours in 15 days, because everybody was anxious to have it closed by the end of the year, and it was a cash sale.

    Bookmark   September 1, 2011 at 7:45PM
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jjaazzy

Ncrealestate it's a cash deal. Barbcollins that deal that closed in 15 days that was a Foreclosure? Maybe I need to change my plan of action? Well your all right, we heard from the Attorney today and she said she asked around and agreed it could take months. So three ya have it. We sit, we wait. : (

    Bookmark   September 1, 2011 at 8:08PM
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ncrealestateguy

The fact that this RE attorney thought that a short sale could be done in that short of a time means that he/she has no experience in closing short sales. Use another attorney.

    Bookmark   September 1, 2011 at 8:32PM
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jjaazzy

Ncrealestateguy your right! Getting really tired of folks that don't know THEIR job. Barbcollins, what were some of the problems? What is your guys opinion of purchasing a home that is listed as a foreclosure? How is that process?

    Bookmark   September 2, 2011 at 11:55PM
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barbcollins

Yes, we bought a foreclosure at in December 2009.

I don't know exactly what their problems were but just a lot a red tape for the bank.

Foreclosures are good for us, since we do a lot of home renovations. They are usually in bad shape.

    Bookmark   September 3, 2011 at 1:18PM
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ncrealestateguy

Foreclosures are pretty much the same process as any other regular sale. Short sales are where the big differences come into play.

    Bookmark   September 5, 2011 at 9:14PM
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brickeyee

Foreclosures are pretty much the same process as any other regular sale."

Unless the bank is finally looking at an actual loss.

They then seem to move rather slowly (often to their own detriment).

No one at the bank likes to be THE person that signed off on a loss.

Banks practice diffusion of responsibility by using a 'committee' to approve money losing activity.

Even with an all cash offer on the table last fall, it still took the idiots at the banks over 4 weeks.

"Short sales are where the big differences come into play."

These typically take even longer since the bank want to minimize losses, and make sure the seller is not gaming them into taking the loss.

More than once I have put an offer in on REO, withdrawn it when the bank futzed around, then purchased the property for even less in a few months.

I have an attorney who works these deals, and pushes and pushes till the bank moves.

No one likes losing money, especially banks.

    Bookmark   September 6, 2011 at 1:43PM
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ncrealestateguy

I have never had a bank take longer than a week to respond to an offer on an REO. There may be exceptions here and there, but most respond within a couple of days in regards to foreclosures.

    Bookmark   September 6, 2011 at 2:40PM
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brickeyee

"I have never had a bank take longer than a week to respond to an offer on an REO."

I have never seen a bank take less than 2-3 weeks in over 30 years of purchasing REO from numerous banks.

    Bookmark   September 6, 2011 at 7:03PM
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ncrealestateguy

Other agents from other areas of the Country, please chime in here. I have a hard time believing that my offers to REOs are treated much differently than most other agents.

    Bookmark   September 6, 2011 at 10:17PM
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terriks

I work at a RE office, and the offers on REOs are responded to quickly, and close in about the same amount of time as a "normal" sale.

    Bookmark   September 6, 2011 at 11:06PM
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jjaazzy

Trying to shift gears and look for more Forclosures rather then the Short Sales. What a ridiculous mess everything is.

    Bookmark   September 6, 2011 at 11:08PM
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brickeyee

"I have a hard time believing that my offers to REOs are treated much differently than most other agents."

What size banks are you dealing with?

State or federally chartered?

Large banks that are federally chartered are owned by bank holding companies (gets around the interstate rules) and have multiple management levels they must satisfy.

    Bookmark   September 7, 2011 at 10:22AM
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jjaazzy

Ok another question if you go to look at a house that is a Forclosure and they are still showing house but say they have a contract on it, what does that mean? If deal #1 falls apart then you get it? Or, if you bid more then the prior offer you then get the property? How does that work?

    Bookmark   September 7, 2011 at 11:39PM
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ncrealestateguy

Brickeye,
I have dealt with BoA, Wells Fargo, Freddie Mac, HUD, all the way down to the local banks. I have never had a response take longer than a few days. Short sales are a whole 'nother matter.
Maybe your attorney has been the weak link in regards to your very slow responses.

    Bookmark   September 8, 2011 at 6:26AM
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ncrealestateguy

Jaazzy,
You could write a back up contract on the property. All of the terms and conditions have to be agreed upon and the contract executed in order for yours to move to being the primary contract, if the current contract falls apart.
As far as your second question... NO, your contract has to be treated as a back up contract. Once the bank has executed a contract with a party, any other contracts have to be treated as a back up.
Once again, dealing with a foreclosure is pretty much the same as a regular sale. There are some addendums that the bank will make you sign, mainly stating that you have a certain time period to perform all of your due diligence

    Bookmark   September 8, 2011 at 6:39AM
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brickeyee

"I have never had a response take longer than a few days. "

How do you define "a response"?

Acknowledging an offer has been received?

Or actually accepting an offer and creating a contract?

Responding with "we have received your offer" is not much of a step.

How long has it been taking to get a signed contract?

    Bookmark   September 8, 2011 at 10:00AM
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maddielee

We have purchased a few foreclosures within the last few years. In each case, the bank has accepted our offer within 72 hours. We've closed quickly on all but one (David Stern title mess involved in the slowly closed one).

Once a foreclosure hits the MLS there shouldn't be a reason to delay a contract, should there?

Our realtor is on some sort 'watch list' that notifies him as soon as a bank puts a foreclosed property on the market. When a bank is ready to sell why should there be a delay?

    Bookmark   September 8, 2011 at 3:16PM
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brickeyee

"Once a foreclosure hits the MLS there shouldn't be a reason to delay a contract, should there? "

The terms of the offer maybe?

    Bookmark   September 8, 2011 at 4:03PM
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ncrealestateguy

Brickeyee,
I have never had a bank respond by saying that "We acknowledge receiving your offer". What I am speaking of is that when I submit an offer to an REO, it usually takes one to 3 days to get a response of either an acceptance, a counter offer, or a rejection. If the reponse is a counter, the following responses are usually even quicker than the initial offer.
I can not explain why your offers are taking so long to get a response.

    Bookmark   September 8, 2011 at 9:03PM
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