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Old 07-27-2013, 10:51 PM
 
11,541 posts, read 12,567,466 times
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If you are serious about purchasing a short sale, I would highly suggest that you use a real estate agent who has experience with this type of sale and who has attended real estate seminars on this subject. You can also get some literature for yourself in order to fully understand the complexities.

A foreclosure will remain on your credit history for a minimum of 7 years. Purchasing a foreclosed property or short sale cannot possibly impact a credit score. That would not make any sense. There are investors who earn their living buying multiple foreclosures and short sales.
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Old 07-28-2013, 01:05 AM
 
Location: Long Island (chief in S Farmingdale)
22,107 posts, read 19,315,984 times
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First off buying a short sale is not going to hurt your credit. Selling your property as a short-sale will hurt your credit and results in you generally not being able to get a mortgage for 3 years in most cases (there are some exceptions if for example you didn't go late on the mortgage and had a short-sale due to having a job transfer and being under water on the mortgage at the time)

As far as the 740 score from the bank that is doing the short-sale that really makes little sense. The bank doing the short-sale is no longer going to have any type of interest in the property (unless they are also the bank you are going with) so as long as you are able to get qualified for a mortgage they shouldn't really care if you have 740 or not.

The process of a short-sale can be tough to predict. Sometimes it goes quickly and the time frame is similar to a typical purchase (which can be done in 3-4 weeks depending on your bank) other times it can be a long drawn out process and the bank that holds the mortgage drags their feet.
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Old 07-28-2013, 07:24 AM
 
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Two big things... as already mentioned, it's the SELLER'S credit that gets dinged for a short sale. They're the ones not giving the bank the money they agreed to.

As far as the credit score of 740 required... my guess is that your broker doesn't want to do the extra work required for a Short Sale. Offers must be approved by the bank and it can be a pain.

Are there other factors in your purchase? Are you putting less than 20% down? Is the purchase price at the high end of what you're qualified for? The reason I ask is that perhaps your broker is worried about jumping through the short sale hoops so she wants a score she considers a "slam dunk" for approval (and less subject to the volatility in rates). Not saying this is right of her, but a possibility.

Simplest answer might be that she just doesn't have any idea what she's talking about.

Either way, you want somebody who deals with short sales as mentioned.
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Old 07-28-2013, 08:05 AM
 
Location: Planet Earth
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Maybe your RE agent doesn't want you to buy the short sale because its at a reduced price which means less commission for him/her.
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Old 07-28-2013, 01:00 PM
 
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We'd be putting down at least 20%, possibly more. Credit score is fine, not 740, but not terrible, was already approved on another sale that fell through for something unrelated to me. I'm thinking she just doesn't want to do it, she's been in the business for over 20 years so its unlikely hat she doesn't know what she's talking about. She's either getting the short sale commission or no commission so that would be a poor decision on her part.
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Old 08-04-2013, 07:18 AM
 
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I talked to my agent about this. Her stance is that she will pursue a short sale if that's what we want but her opinion is that the sellers bank will only approve a short sale if the buyer has excellent credit and is a sure thing, regardless of buyers pre approval from buyers lender. So she thinks we'll be wasting our time because although we a pre approved (and even beyond that) for the loan we are looking for we'll be wasting our time because we don't have "excellent" credit and the sellers bank likely wont approve of that.
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Old 08-04-2013, 08:29 AM
 
Location: Planet Earth
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Quote:
Originally Posted by Apple juice View Post
I talked to my agent about this. Her stance is that she will pursue a short sale if that's what we want but her opinion is that the sellers bank will only approve a short sale if the buyer has excellent credit and is a sure thing, regardless of buyers pre approval from buyers lender. So she thinks we'll be wasting our time because although we a pre approved (and even beyond that) for the loan we are looking for we'll be wasting our time because we don't have "excellent" credit and the sellers bank likely wont approve of that.
Sorry, but your agent is an idiot. You can get financed from any lender you want. The bank does not have to approve your financing. They only have to approve the sales price.
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Old 08-04-2013, 02:56 PM
 
Location: Long Island
9,918 posts, read 23,029,363 times
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Quote:
Originally Posted by Apple juice View Post
I talked to my agent about this. Her stance is that she will pursue a short sale if that's what we want but her opinion is that the sellers bank will only approve a short sale if the buyer has excellent credit and is a sure thing, regardless of buyers pre approval from buyers lender. So she thinks we'll be wasting our time because although we a pre approved (and even beyond that) for the loan we are looking for we'll be wasting our time because we don't have "excellent" credit and the sellers bank likely wont approve of that.

"Opinion" being the operative word here. What about "Experience"???

As was previously mentioned, the bank/lender looks first and foremost at the bottom line - how much will they end up with when all is said and done. It's partly up to the agent to do due diligence with regard to credit worthiness of the buyer before making the offer.
Sounds like your gut is spot on - in a previous post you stated that "I'm thinking she just doesn't want to do it".

Offer
Acceptance
Inspection (if applicable)
Contract
Sellers' Bank Approval
Your Loan Application (concurrent with waiting for above)
Appraisal (can still kill the deal)
Underwriting
Closing


That's it, somewhat abbreviated

Short sales require more work and attention than a "regular" purchase and also call for a RE attorney (and agent!) with short sale experience. The agent works hard for the money LOL.
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Old 08-04-2013, 03:32 PM
 
654 posts, read 2,111,651 times
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The bank or the servicer for the investor is NOT going to run your credit. They will ask for pre-approval. They will not even have your ss# although BOA asks for the first 5 of your SS. So how can they determine your credit. Now NationStar is a trip and half I prefer not to deal with them.
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Old 08-04-2013, 04:39 PM
 
Location: Nassau, Long Island, NY
16,408 posts, read 33,184,658 times
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Quote:
Originally Posted by Apple juice View Post
It wasn't a specific bank. It was just a general conversation. We are selling the house we own now and beginning to look for a new one. A short sale is really our only chance of getting something in the area we'd like to be in, but our agent is implying it's not an option for us because my credit score isn't 740. I've spoken with a lender and I know for sure what amount I will be approved for (this is our second round, the first try at selling our house fell through on the buyers end and I was already approved on a new house, so I know what loan I can get) so it seems odd that even with a lender approval a lower score would be an impediment to purchasing a short sale home. I'm beginning to think our agent just doesn't want to get involved in a short sale.
What area? You may be worrying for nothing because in some areas short sales (and foreclosures) almost never come around and if they ever do are snapped up by insiders at the bank or who know people who work at the bank before anyone in the public or real estate agents get to know about them.

BTW, I agree with the rest that your RE person either is intimidated by the complexities of short sales or just doesn't want to do the extra work involved. Maybe the best thing to do is if you see a short sale you are interested in, deal directly with the offering agent, as they will work harder to close the deal since they don't have to split the commission with another side.
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