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Well, I was just told that the sellers accepted my offer of $270K so we are moving forward with the process. Hopefully, it'll be sooner than eight weeks before the lenders look at my offer and we begin negotiations. The longer time frame actually doesn't bother me at all; I have a lease on a rental good through the middle of summer. I can stay here if/when the deal is closed while the painters and flooring people do their work.
I'm still a little confused on the pricing of these shortsales. I've seen enough houses and comparables to make an educated guess on a home's value in the area I'm looking. I guess what I should have asked is "If one chooses to buy a house through a shortsale, what kind of savings off the house's fair market value can be expected?"
Thanks to everyone who responded. For somebody going through this the first time without anybody at their side, the whole thing can be a little nerve-wracking.
Well, I was just told that the sellers accepted my offer of $270K so we are moving forward with the process. Hopefully, it'll be sooner than eight weeks before the lenders look at my offer and we begin negotiations. The longer time frame actually doesn't bother me at all; I have a lease on a rental good through the middle of summer. I can stay here if/when the deal is closed while the painters and flooring people do their work.
I'm still a little confused on the pricing of these shortsales. I've seen enough houses and comparables to make an educated guess on a home's value in the area I'm looking. I guess what I should have asked is "If one chooses to buy a house through a shortsale, what kind of savings off the house's fair market value can be expected?"
Thanks to everyone who responded. For somebody going through this the first time without anybody at their side, the whole thing can be a little nerve-wracking.
Unless there has been a previous offer on this particular short sale property and the lender responded giving an indication of what they are willing to accept, then it's kind of a shot in the dark on the pricing. I have seen agents list a house that will be a short sale at some ridiculously low price in order to get some action on it and get the short sale process started. The idea is generally that this first offer will most likely fall through (especially if the offer is w-a-a-a-y below market value). But then the seller and agent will know what kind of an offer the lender will consider acceptable, plus all the necessary paperwork will have been prepared so that the next offer is likely to go relatively quickly and smoothly.
It's really important to know what market value is on a short sale property. You can possibly get the lender to accept something lower than that, but generally not some ridiculously lowball offer. Remember, the lender has the option of choosing to foreclose rather than accept a short sale. Depending on your local real estate market, a lender may feel they'll recoup more costs by foreclosing and then relisting the house themselves through an REO.
Congratulations on your accepted contract! Now it's up to the seller to provide the necessary paperwork that the lender requires (and it's a LOT of paperwork). Then it's up to the lender to decide if they're willing to do a short sale at the offer price, usually negotiating commissions and title fees. And finally, if the lender agrees to the price, terms, and conditions of the contract, then they'll execute a short sale agreement with the seller which will probably require that the seller take back an unsecured note for the closing costs and possibly the deficit on the payoff amount. So ultimately it ends up back with the seller to decide if they're willing to do that. Sometimes the seller isn't agreeable to that. (I just had a short sale where I represented the buyer fall thru because the seller was not willing to take back a note for the amount of the closing costs. Fortunately we were able to execute a new contract whereby the buyers offered less for the house but agreed to pay all seller closing costs. The net to the bank was exactly the same, but the bank looked at the deficit differently because it wasn't "closing costs". It closed in about 2 weeks. Go figure. )
And the really fun part (for the agents), probably no two short sales are going to be anything alike (unless it's the same lender). What works one time may not the next. You have to like Russian roulette to enjoy short sales.
Try to find out some comps your self and if the seller has any liens on the house or property tax not paid, and present them to the sellers realtor (most people just do nothing, I mean realtors as well) and it can help the process.
If your house is in a HOA community, call the HOA and tell them you have a contract on the home and if the home owner is in good standing with the HOA or if there are any letters send out to have things changed or to pay fines. I found out 1 day before closing that the sellers realtor and he is married to the seller, didn't disclose that the had gotten a letter that an oil spill needed to be cleaned which costed a couple of hundred dollars. Even though it was a short sale we delayed the closing and the seller paid for the cleaning. They had to disclose everything even if it is "as is", which they didn't. The seller was a real estate lawyer so to me it was even better that she couldn't get away with the lying and still had to pay. She was pissed off and wanted to sue the HOA but she had no chance and she knew it. The HOA in this community has all letters on a website for everyone to see who gets a letter and for what so nobody has the feeling that they are treated different than others.
Realtors love the word due dilligence and that is what I did and most realtors I worked with using the word in a sentence and that is where it stops.
If your house is in a HOA community, call the HOA and tell them you have a contract on the home and if the home owner is in good standing with the HOA or if there are any letters send out to have things changed or to pay fines. I found out 1 day before closing that the sellers realtor and he is married to the seller, didn't disclose that the had gotten a letter that an oil spill needed to be cleaned which costed a couple of hundred dollars. Even though it was a short sale we delayed the closing and the seller paid for the cleaning. They had to disclose everything even if it is "as is", which they didn't. The seller was a real estate lawyer so to me it was even better that she couldn't get away with the lying and still had to pay. She was pissed off and wanted to sue the HOA but she had no chance and she knew it. The HOA in this community has all letters on a website for everyone to see who gets a letter and for what so nobody has the feeling that they are treated different than others.
Realtors love the word due dilligence and that is what I did and most realtors I worked with using the word in a sentence and that is where it stops.
You have no right to that information and the HOA is derelict if they give it to you. Even access to a website should be limited to owners. You might ask the owner to get it for you or put it in the contract. But mostly it would not survive the addendum the bank would add. You don't have to accept the Bank addendum. You generally won't buy the house though if you refuse it.
If the contract was written with the standard short sale addendum they did not have to tell you anything...in fact they likely fixed the oil problem because it was easier than suing you. If it was an issue of substance however there would likely have been a different outcome.
You continue bentlebee to believe that you have a set of rights that do not exist. As long as these are minor matters they may well be settled by allowing you your way....but some poor fool will follow your lead and get his ass sued. So let us understand...you demonstrate that people will sometimes yield on issues they could win to avoid a battle. But pick the wrong issue and the building falls on you.
In AZ when a home has a contract in an HOA with greater than 50 units the seller must notify the HOA of the contract. The HOA has 10 days to provide the CC&R's, Bylaws, and any violations that may affect the sale of the property.
The buyer has to sign that s/he has received and understand those documents.
The title companies have taken it upon themselves to notify the HOA of the sale, and sometimes they drop the ball and are late notifying the HOA. Therefore, an agent (in AZ) should get on top of this right away, with the title company to see if the notice has gone out, and then contact the HOA to see if the notice has been received, and when. Then get on the buyer to collect the documents from the HOA. The HOA cannot give the documents to the agent.
I know it's different in other states. This is a relatively new law for AZ.
In AZ when a home has a contract in an HOA with greater than 50 units the seller must notify the HOA of the contract. The HOA has 10 days to provide the CC&R's, Bylaws, and any violations that may affect the sale of the property.
The buyer has to sign that s/he has received and understand those documents.
The title companies have taken it upon themselves to notify the HOA of the sale, and sometimes they drop the ball and are late notifying the HOA. Therefore, an agent (in AZ) should get on top of this right away, with the title company to see if the notice has gone out, and then contact the HOA to see if the notice has been received, and when. Then get on the buyer to collect the documents from the HOA. The HOA cannot give the documents to the agent.
I know it's different in other states. This is a relatively new law for AZ.
It is much the same in Nevada. The process though can be more complicated than that...for instance lenders and holders in do course routinely refuse...in some cases they build it into the contract. And a short seller may well decline to pay for the docs.
Nevada agents always pick up the docs...In fact the crucial legal handover is from the sellers Agent to the Buyers Agent.
I see no way an oil stain would be reported. Cosmetic and would not interfere with a close. Nor would you hear about a weed complaint. Both though may result in HOA fines.
Note however only the seller can order up docs....I presume that is the same in AZ.
What about if you ask to disclose everything,incl. HOA issues and they didn't and they lied? You don't get me scared, I was totally right even if it is cosmetic, but it is a issue that will be fined by the HOA. A real estate lawyer and a sellers realtor (in this case husband and wife) should be acting honest as the realtor haad us signed to state he would disclose everything and act honest. What about that paper? We had more written proof about their "honesty" so we knew the case would be one they couldn't win and I try to prevent other of just listening to realtors who just want to collect their commission and have home closed on the the buyer can deal with the rest..... Realtors like some on this forum are just telling me and close and pay the couple of hundred dollars...see who was right, ..not you guys and you can't scare me I know what i do and can't do. Potential buyers have a right to get disclosures and have them to be filled out as much as possible. I have filled out 5 and everytime the realtor would tell me, "oh not important just state you don't know", well I know that trick and before I sign a contract I want to have the HOA rules and regulations so I can also see for my self if there are issues, like for example a fence that shouldn't be there. In our community wooden fences are not allowed and some people had them years ago and they are grandfathered in, but new once have to be vinyl and white. There are home owners who still have put in the wooden fences and are having a lot of fines and have to remove it and replace it for a vinyl one, that will cost a couple of thousand dollars, so I want to prevent other people from having these things happening, but it seems that a couple of realtors rather have buyers pay and feel bad after closing..........I know all to get the commission, not to have the best interest in your client who is paying for you to eat and drive around.......
Whatever happened to just paying what the seller is asking? You were willing to pay $300K before, so what changed? It is the same house.
Maybe because the market has changed and not going up but downwards? ...
Smart to offer less!
I have homes that I won't sell now because it is a buyers market and I won't get what i would like to get, but if you need to sell or just want to sell you have to know buyers are not willing to pay the same when an offer is turned down and a couple of months later the market and the news seems to be worse, so of cause an offer will be lower. A seller can always say no and wait longer and see what will happen.
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Now it's up to the seller to provide the necessary paperwork that the lender requires (and it's a LOT of paperwork). Then it's up to the lender to decide if they're willing to do a short sale at the offer price, usually negotiating commissions and title fees. And finally, if the lender agrees to the price, terms, and conditions of the contract, then they'll execute a short sale agreement with the seller which will probably require that the seller take back an unsecured note for the closing costs and possibly the deficit on the payoff amount. So ultimately it ends up back with the seller to decide if they're willing to do that. Sometimes the seller isn't agreeable to that. (I just had a short sale where I represented the buyer fall thru because the seller was not willing to take back a note for the amount of the closing costs. Fortunately we were able to execute a new contract whereby the buyers offered less for the house but agreed to pay all seller closing costs. The net to the bank was exactly the same, but the bank looked at the deficit differently because it wasn't "closing costs". It closed in about 2 weeks. Go figure. 
)
