Help Please: Buying Foreclosure/Short Sale

[FirstTimer90]

In an effort to spend less money on a home, I am considering buying a foreclosed, Pre-foreclosed or short sale house. This will be a home to live in, not an investment. I am doing some research and thought it best to reach out to this community. Does anyone have any information they may be able to offer on this subject? Or if the forum rules allow, could anyone suggest articles or another trusted forum link for me to gain more knowledge about this option. Thank you in advance.

[97guns]

i bought 4 foreclosures in '09 and another last year, at the time of the first buys the market was really hot and listings were not lasting on the market long, maybe averaging a week. i had to come in with offers 5-8K over asking price to land them. the market turned when i bought last year and the average days on market was closer to 1 month, my offer was for 10K under asking and they countered with a 5K discount that i took.

try to buy something newer so you dont have to worry about any big repairs for some years, the last one i bought did not come with a home repair warranty but all 4 previous did. the re agent told me they changed the rules that it was not mandatory anymore, could be state to state, check that out. it might be worthwhile you buying it on your own, i think it was $800 for 1 year and it covers almost everything that breaks, i got 2 new stoves and a water heater out of them.....good luck

[FirstTimer90]

i bought 4 foreclosures in '09 and another last year, at the time of the first buys the market was really hot and listings were not lasting on the market long, maybe averaging a week. i had to come in with offers 5-8K over asking price to land them. the market turned when i bought last year and the average days on market was closer to 1 month, my offer was for 10K under asking and they countered with a 5K discount that i took.

try to buy something newer so you dont have to worry about any big repairs for some years, the last one i bought did not come with a home repair warranty but all 4 previous did. the re agent told me they changed the rules that it was not mandatory anymore, could be state to state, check that out. it might be worthwhile you buying it on your own, i think it was $800 for 1 year and it covers almost everything that breaks, i got 2 new stoves and a water heater out of them.....good luck

Great info. Thanks

[ua_guy]

I recently bought a short sale. It's going to be dependent on the lender, the location, the home, the sellers situation, the agents, among a myriad of other factors.

Our experience buying one went very well. We hired a law firm that specializes in negotiating them start to finish. Their fee was contingent on a successful close, and that we did. We paid a flat fee of $2400 and worth every penny to us as buyers who knew nothing about the process.

Short Sale Superstars is a good forum to read about buyers/sellers/agents who have navigated them. Lots of horror stories on there too, not everyone's experience is the same.

All in all, the process took a little over 4 months from the time we engaged the seller to consider a short sale and sign an offer, to the day we closed.

Other pointers -- It takes a lot of administrative effort on everyone's behalf, and everyone must be engaged. We set up an email forum with us, the sellers, the agents, and the attorney. There were afternoons where we had rapid-fire emails going to get things signed and completed.

Inspections are best done before an offer is made. Banks are unlikely to negotiate any remediation/repair during the approval process. Make your offer inclusive of what you discover about the house, and shoot low, but compile a serious offer. We did ask for closing costs in our offer and it was approved and graciously paid by the lender.

Creating other dependencies with a short sale is extremely difficult, for example, timing the sale of an existing home, or making it contingent on the sale of an existing home. We didn't have to do that, and it made things easy. The closing date did move; and don't assume the closing date requested in your offer will be approved or even met. The bank sets it within reason, and if there are multiple liens, they aren't always in agreement. Ours were not; the second loan had a shorter closing date.

Short sales are a heartbreak; unfortunately we fell in love with the home from the start, and there were many points during the process where it appeared the deal was doomed. A short sale has to be treated as a gamble and it has to be expected that you could lose the deal at almost any point up until closing. There were many points of panic in our deal, right up until the day before close when the HUD was rejected because of a clerical error. Thankfully, it only took a day to have the corrected version re-approved.

At the end of the day, the bank doesn't have to do anything; everything is according to their timeline and whim. Just imagine the whole approval is in the hands of some rich guy who is mostly unreachable somewhere on his yacht and you are just another stop-gap business deal to be reviewed and approved between enjoying drinks and fishing. It goes a lot easier to expect nothing, set expectations low, but dutifully follow the process and hope for the best!

[FirstTimer90]

i bought 4 foreclosures in '09 and another last year, at the time of the first buys the market was really hot and listings were not lasting on the market long, maybe averaging a week. i had to come in with offers 5-8K over asking price to land them. the market turned when i bought last year and the average days on market was closer to 1 month, my offer was for 10K under asking and they countered with a 5K discount that i took.

try to buy something newer so you dont have to worry about any big repairs for some years, the last one i bought did not come with a home repair warranty but all 4 previous did. the re agent told me they changed the rules that it was not mandatory anymore, could be state to state, check that out. it might be worthwhile you buying it on your own, i think it was $800 for 1 year and it covers almost everything that breaks, i got 2 new stoves and a water heater out of them.....good luck

Do you (or anyone on here) use any online sites or resources to find and review properties in foreclosure or short sale?