My short sale pitfall (short sales, foreclosure, rental)

[gotpancit]

Damn, the short sale we put an offer on went into foreclosure! The owner was already late by three months and applied for bankruptcy.

What I don't understand is why did the bank proceed to go into foreclosure and waste all that time and money for that process if they had a full price offer on the short sale! Maybe we were too late?

We'll see this house back on the market in about 6 months. Upsetting, but there is still a little bit of inventory left. Hopefully more houses start popping up!

NEXT

[iconb]

The short Sale market is confusing at best, the real thing to look at here is that the bank can’t take the kind of losses that we would like. From what I under stand they need to get a certain percentage back before they can call it a loss.

We’ve gone to the auctions and even won a bid only to be turned down. If you go to a few auctions you will start to see the same homes. They are hedging their bets on it turning this summer but after what we just went through to get our loan to qualify it’s going to be tough.

Bottom line is don’t invest hope on a short sell.

[gotpancit]

Definately not investing hope, but very discouraging.

What was your problem qualifying for a loan if you dont mind me asking. We are already pre-approved, but that contract will last only until the 1st of May I believe. I know its going to be hard getting a loan with only 5% down which is what we have (1st time home buyers).

[iconb]

everything was a problem we had 20% down + credit scores over 800 and they keep making us jump over the next hurdle.

[iconb]

we want to rent out the home we are in and they want us to provide a rental agreement + canceled check. Then I had to provide an agreement that said I could work remotly, they want to know why I was going from a home of more value to less value (or so they think).

Thing is we can afford both homes and I'm not sure what they may want next, DNA!

[Sacramentan]

Originally Posted by gotpancit

What I don't understand is why did the bank proceed to go into foreclosure and waste all that time and money for that process if they had a full price offer on the short sale!

Do you know if the bank had even agreed to a short sale? Any agent can list a home as a short sale... getting the deal closed is another matter.

First, there is a good chance the listing agent is not knowledgeable enough to handle a short sale.
Second, there's a good chance the bank is not being cooperative.
Third, there's a good chance the sellers may not be cooperative.

A very small percentage of short sales in my area (like around 10%) successfully close.

When you're making an offer on a short sale the key is not to get your hopes up. Recognize that it may be a wild goose chase. If you're in a position where you just want to buy a house relatively quickly without a lot of hassle, a short sale is probably not right for you.

If you can handle the waiting, the extended timeframes, and the high probability that you will have several deals fall through before getting the one successful one, short sales are an excellent way to snag a good deal.

[Calidreemer]

Pancit - sorry to hear you lost the house. Hang in there

[gotpancit]

Well today we are going to go look at some new housing developments. Not really my choice but the wife is getting antsy.

We shall see what John Liang has to offer in folsom. I know one thing I'm not going to like are the small lots, and no 3 car garage =/. But we'll see.

[gotpancit]

Wow talk about small! Now those are postage stamp sized lots. It would probably take someone no longer than 5 minutes to mow the lawn!

[Calidreemer]

Hi Pancit - I am not familiar with that builder. It is tough to get used to the smaller lot sizes. That's why we liked the 15K lot we saw in EDH. I like elbow room!

Good luck with the house hunt!