Short Sales- Your experiences?

[puffkin]

We want a bigger home but in no way are we really looking or anything like that. Our house is perfectly adequate for us right now (2000 SF, 3 bedroom, 2 1/2 bath). We do however know that it will be cramped if/when we have another child. Also, we HATE HATE HATE our postage stamp yard. It wasn't so bad until this past summer when a house finally went in behind us and now we have zero yard plus there house is right there.

I casually peruse the real estate listings from time to time and found a perfect house for us. It is in our neighborhood, has the extra bedroom and more square footage and has a nice size yard (actually the property is beautiful). It is in our price range. Only problem is it is a Short Sale

That has me a bit nervous. We have a real estate attorney friend that could make sure all the liens and legal stuff is kosher. We also aren't in a huge hurry or anything like that. Our house isn't even on the market yet and won't be unless we decide to go for this house. So what do we need to do if we do decide to pursue this house or is it just a bad idea all around?

 

[chobie]

We bought a house on short sale back in august. It was less of a hassle then when be bought our previous home that was a regular sale.

 

[binny]

its going to depend on the bank that holds the loan.

Bank of America has a new program that is mostly computer based, and to get through the system, they say it takes no more than 60 days start to finish. I have heard of them going through in 5 weeks from offer to close. that is amazing for a short sale!

Some local banks though can turn around a decision in no more time than a regular sale. Most though will take longer than that.


The problem is going to be how much they are behind. I know someone who got to closing then (thankfully) read all of the paperwork, and found that the bank wanted to them to carry a massive promissory note for 30 years. They were not able to do it so they lost the sale.


So it is going to really vary per sale. Our first house that we purchased was a foreclosure, it was 9 years ago though so things are totally different now.

The banks are a lot more motivated right now from what I understand they know that this spring another round of ARM balloons are scheduled to hit so there will be a lot more on the market soon.