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My wife and I found a great house that was a short sale -
>It fell out of escrow with a previous buyer (they found another place), but the bank had just approved it at a specific price.
>The day it fell out, my wife and I put in the exact same offer (the only thing different on the paperwork from the previous offer is our names). It was accepted by the seller and the paperwork was signed and filed the next day.
>There is only one lender involved, and the current owner is even up to date on his HOAs.
>Our agent and the sellers agent are both experienced short sale agents.
>We just got notification from our agent that the bank now has our paperwork in hand for review (23 days later from us signing)
....I have heard so many horror stories about short sales that I just wanted to know, based on the above information, do you think this deal will go through?
My agent feels we will get the house, but that it may take another month or two (which is fine for us).
Just wanted to see if anyone thinks we should still be actively searching, or do you think this could work out...and if the process should move quicker than normal short sales.
It sounds like you are in a better situation than most short sales by taking over from a previous buyer that had approval. However, nothing is certain in short sales, best to keep looking just in case it falls apart.
There is no guarantee. The lender approved the previous offer with a closing date in mind for them to accept X as their bottom line. With you as the new buyer, just because you're coming in at the same price, their bottom line just moved because it's at least a 60 days later closing, interest adds up, late fees add up... it all adds up. They might counter your offer to make up the difference, you just never know...
While I agree with FalconheadWest that lenders have been known to move the goal post just as buyers think they are in the "red zone", there is a BIG advantage to being able to "step in" to deal that fell apart due to buyers' inability to get financing -- the lender has likely gotten all the "loss review committe" sign-offs and other internal nonsense squared away...
The potential for the lender to re-open negoitations is always a threat, but unless something odd comes up I would focus on treating your own finances as if you were are "pre-closing final approach" and make sure your credit report stays clean until after closing....
I'd say that you were closer to than from getting the house, but short sale paperwork is notoriously slow. If you are patient and not in a hurry, it may be worth the wait. As far as the 23 days, that seems fairly quick and a good indication that they are moving along in/on your offer.
4 days after the bank had our paperwork, they came back with a counteroffer tonight.
Kind of bummed out, since we thought the original would stick since the bank had already approved it...
We were in at 200k and the bank countered with 209k, with a closing of March 1st.
The agent thinks the house value is closer to 225-228k, so she feels it's still a good price.
Both the listing and selling agents feel if we accept the offer, everything will go through and we get the house.
My question is: every penny counts to us - is it worth countering at all, even to say, 205k?
My wife and I love the home and location...so we most likely will just accept...but we have to pay all closing costs and those extra few thousand dollars could go a long way for us.
It's worth a shot to counter back at 205k...if you have time to wait because they could respond to your offer quickly, other times I've read it takes weeks. Good luck!
Countering the offer will delay several more days, even weeks before you hear from them again. As I mentioned above, just because the previous buyer was approved at that amount, it doesn't mean they should approve you for that amount because they still had X more months of carrying costs on the loan.
If it comps that much higher, and you don't want to risk losing it, you should probably accept it because if another buyer becomes interested while you're waiting for a response, you're probably SOL. If you don't mind losing the house, counter and see what happens.
If it comps that much higher, and you don't want to risk losing it, you should probably accept it because if another buyer becomes interested while you're waiting for a response, you're probably SOL. If you don't mind losing the house, counter and see what happens.
Thanks for the advice!
...we really don't want to lose the house...we really love it, so I think we'll just go in for the 209k.
The lowest priced house in the neighborhood last sold in May for $223k.
Most of the other houses were in the $230k -240k range (all the houses are similar builds)
I'll update again when I hear back...
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