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Old 01-25-2010, 10:54 AM
 
13 posts, read 47,355 times
Reputation: 16

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Hello all-

I am at the beginning of trying to buy my first house. I am very interested in a short sale property I found. Since it's a great deal and a 150% what i am looking for the agent is advising me to make an offer asap. I really want to get an inspection (and quite frankly a contractor estimate on some stuff I already know that has to be fixed) before I make an offer since I feel like making an offer before an inspection is showing all my cards.

Please advise if this is the standard process.

Also, any short sale advice is welcome.

Thank you!
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Old 01-25-2010, 11:30 AM
 
99 posts, read 306,555 times
Reputation: 56
Default same situation

hey we are going thru the same situation here in greenville,sc, our buyers agent has written it into our offer, we made a fair offer with conditions, if they ACCEPT offer we get to inspect premise and go forward from there, we have to put down ernest money with the offer, it is written out fully, the house we are looking at needs a fair bit of cosmetic work so we have detailed it with the offer, maybe it will fly ,maybe not.
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Old 01-25-2010, 12:01 PM
 
Location: Barrington
61,176 posts, read 41,984,278 times
Reputation: 19710
I am one of those odd ball agents that sometimes advocates a pre offer home inspection. Having said this, I would not do so on a short sale, given the majority of properties listed as short sales, do not close as such. Instead they proceed to foreclosure.

Short sales are far from certain. The seller may not qualify. There may be multiple lenders. There may be PMI. They may not like your offer. There may be a better offer. Seems to me that it often takes 5-6 months between the offer and close for the minority of transactions that do close.

Your offer should be contingent upon a home inspection, allowing you the ability to walk away if you decide to do so.
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Old 01-25-2010, 12:04 PM
 
Location: Tempe, Arizona
4,511 posts, read 12,874,164 times
Reputation: 2199
Quote:
Originally Posted by purebread View Post
Hello all-

I am at the beginning of trying to buy my first house. I am very interested in a short sale property I found. Since it's a great deal and a 150% what i am looking for the agent is advising me to make an offer asap. I really want to get an inspection (and quite frankly a contractor estimate on some stuff I already know that has to be fixed) before I make an offer since I feel like making an offer before an inspection is showing all my cards.

Please advise if this is the standard process.

Also, any short sale advice is welcome.

Thank you!
Is the agent yours or the sellers? You should really have your own representation who can advise you on issues like this.

As noted by boernomore, your contract should include an inspection contingency where you can cancel if you don't like the inspection results. Typically you will negotiate for any needed repairs at that time.

This may vary by area, but here, we use a short sale addendum that does not require earnest money to be deposited until the bank accepts the contract, and you can cancel anytime before the bank acceptance. All inspections etc start at time of bank acceptance. Some listing agents will require a partial earnest money deposit to be held for 60 days to insure you don't bail to soon. Generally, short sales will take a few months to get a bank answer, either acceptance or denial of the short sale.
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Old 01-26-2010, 10:17 AM
 
Location: Salem, OR
15,064 posts, read 37,214,380 times
Reputation: 15831
32% of short sales close in my area. There is no way I would advocate as an agent for my client to spend $400 on a home inspection for a 32% chance of getting to closing. It depends on how much you like your money and want to gamble.

The standard procedure is to move forward with inspections AFTER the bank has agreed to a short sale.
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Old 01-26-2010, 03:32 PM
 
Location: Marion, IA
2,796 posts, read 5,825,278 times
Reputation: 1595
put in an offer contingent to an inspection. And dont pay $500 on an inspection. If you are getting a great deal then you can't worry about the small stuff. Just make sure the major things work (furnace, foundation, roof)
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Old 01-26-2010, 05:12 PM
 
Location: Massachusetts
422 posts, read 1,367,513 times
Reputation: 298
there may be a short sale house that we may wanna make an offer on. i understand that a short sale might take much longer - sometimes up to 6mths or even more. what i want to know is....can we cancel the contract anytime if the bank hasn't accepted the short sale offer? i don't wanna be tied up to a contract which might take an unknown amount of time...and have to pass up other opportunities that come along. what's the downpayment required for short sale typically?
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Old 01-26-2010, 05:20 PM
 
Location: Tempe, Arizona
4,511 posts, read 12,874,164 times
Reputation: 2199
Quote:
Originally Posted by bigfatturkey View Post
...can we cancel the contract anytime if the bank hasn't accepted the short sale offer? i don't wanna be tied up to a contract which might take an unknown amount of time...and have to pass up other opportunities that come along. what's the downpayment required for short sale typically?
It depends on what your purchase contract says. Check with your Realtor to see if they have a standard short sale addendum and if it allows cancellation prior to acceptance. If not, you may be able to put a similar clause into the contract assuming the seller will agree to it.

Earnest money amount should be similar to any home purchase and the expected amount may vary by location. Here, it's usually about 1% of purchase price. The minimum full down payment will depend on your loan requirement.
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Old 01-26-2010, 07:32 PM
 
Location: Massachusetts
422 posts, read 1,367,513 times
Reputation: 298
Quote:
Originally Posted by rjrcm View Post
It depends on what your purchase contract says. Check with your Realtor to see if they have a standard short sale addendum and if it allows cancellation prior to acceptance. If not, you may be able to put a similar clause into the contract assuming the seller will agree to it.
thanks for your reply! i'll have to check with my realtor then....
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Old 01-27-2010, 12:47 AM
 
Location: Palm Beach County
1,701 posts, read 4,096,841 times
Reputation: 635
I hope the new short sale guidelines actually go into effect!
I'd have to agree with everyone else, don't get an inspection until you get bank acceptance, if the property is in rough shape though you could set yourself up for months of waiting only to have it not pass inspection in the long run.
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