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Old 09-07-2010, 12:15 PM
 
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Is it worth buying a house that is listed as a Short Sale? The possibility of waiting for the bank to approval can be a long time?
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Old 09-07-2010, 12:35 PM
 
Location: Long Island
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Quote:
Originally Posted by destiny826 View Post
Is it worth buying a house that is listed as a Short Sale? The possibility of waiting for the bank to approval can be a long time?

It depends on the bank, on the seller's (and buyer's) attorney(s), and the ability of the listing agent (where necessary the buyer's agent) to present the offer package in an appropriate fashion.
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Old 09-07-2010, 02:27 PM
 
Location: East Northport
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Every short sale is different. Sometimes (rarely) the bank has already approved the sale at a specified price. Sometimes you wait and wait for an answer, although most banks are getting a bit more responsive these days. If you are going after a short sale, make sure that you are already preapproved for a mortgage. Also, be prepared to take the home in "as is" condition as there is little negotiating room.
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Old 09-07-2010, 03:42 PM
 
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So I will lose out the mortgage application fee and the engineer inspection if the deal falls through!! Should I renegotiate price of the house? I didn't find out about the short sale when we negotiated, apprently the broker didn't know until few days ago as well.
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Old 09-07-2010, 03:52 PM
 
Location: I'm gettin' there
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Quote:
Originally Posted by destiny826 View Post
So I will lose out the mortgage application fee and the engineer inspection if the deal falls through!! Should I renegotiate price of the house? I didn't find out about the short sale when we negotiated, apprently the broker didn't know until few days ago as well.
You mean you were negotiating on the house without knowing its a short sale ? Thats rough.... if it was true !! This, I believe is totally on the REA's as they should know better, correct me if I'm wrong Elke/Tom.

In any case does your perception about the house change now that you know its a short sale ? Are you having 2nd thoughts about the house ? If you are not in contract yet, then you can back off if you want to. Talk to your attorney.
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Old 09-07-2010, 05:30 PM
 
Location: Long Island
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Quote:
Originally Posted by destiny826 View Post
So I will lose out the mortgage application fee and the engineer inspection if the deal falls through!! Should I renegotiate price of the house? I didn't find out about the short sale when we negotiated, apprently the broker didn't know until few days ago as well.
Based on some of your other posts, I get the impression that you approached the listing agent directly - is that correct? Which is why you feel you have only the people on the forum to ask questions, and not an agent "of your own" ??
He/she may not have done his/her homework with regard to equity in the house when they took the listing, or if you offered significantly less than asking price, that might have put the sale into "short sale" territory - sometimes as a result of the commission which may not have been taken into consideration at the time the negotiations started.

The mortgage application fee can hopefully be put towards another home. The inspection is most likely on you, unless you can prove that the agent was negligent when representing the property and you could try to approach the manager of that office trying to recoup your cost.
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Old 09-08-2010, 10:41 AM
 
Location: East Northport
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A listing agent does not have an obligation to determine whether or not the sale will be a short sale. That being said, however, it takes a pretty stupid agent not to inquire about the existing mortgages when they take a listing these days.

If the listing agent is aware of a potential short sale situation they are required under Section 501.15 of the MLS Rules and Procedures to disclose this information to other MLS Participants (selling agents).

If the listing agent or selling agent is aware of a potential short sale, I believe that they would have an obligation to disclose this information to a potential buyer under Article 1 of NAR's Code of Ethics which requires Realtors to treat all parties in a transaction honestly.
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Old 09-08-2010, 12:38 PM
 
123 posts, read 539,973 times
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We saw the house and met the broker through the open house. We gave the owner a nice counteroffer and they accepted. I get a phone call from my attorney the next day and telling me the house is in the process of short sale. The selling's attorney is in the process of filing the paperwork with the bank. When the broker took the listing, they did not find any lien to the property and didn't know the seller had financial problems.... We do like the house and know it's a personal choice to go through, just not sure if we should go through as our first house.
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Old 09-08-2010, 01:49 PM
 
Location: East Northport
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That's a personal decision that only you can make. Since in a short sale, the bank typically requires that there actually be a fully executed contract prior to them giving their approval, your attorney should write in a clause that allows you to get out if the short sale has not been approved by a certain date.
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Old 09-08-2010, 02:37 PM
 
Location: Long Island
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Originally Posted by TomMoser View Post
That's a personal decision that only you can make. Since in a short sale, the bank typically requires that there actually be a fully executed contract prior to them giving their approval, your attorney should write in a clause that allows you to get out if the short sale has not been approved by a certain date.

Excellent advice from Tom!
For your own benefit, I'd like to suggest you use an attorney with plenty of short sale experience (not just a handful of transactions...)
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