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Old 06-20-2009, 12:23 PM
 
Location: So Cal
12 posts, read 35,550 times
Reputation: 13

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My husband and I are trying to buy the house that we are now renting. The owner is currently 30 days past due on his mortgage and he is trying to get together a "short sale" package to submit to the bank.

We are working with our landlord's listing agent (as our buying agent) and he is meeting with us on Thursday to put together an offer to submit to the bank.

We are trying to get the bank to approve a short sale of $125,000 (which would have payments at or around $1000, right? if so, this would save us around $400 a month on housing). The real estate agent is telling us that in order for the bank to approve a short sale, there has to be a valid offer submitted with the package from the borrower.

BUT... we have not even been approved for financing yet. We have some issues with our credit that we are working on and as soon as we get those off, our broker is telling us that we can be approved for around $175k. ALSO, I am trying to save enough cash to put down so that we can buy down the amount of the loan (and ultimately pay less interest).

This whole ordeal started abruptly and it seems like we have been thrown into a huge mess. My husband has been the main person speaking with the agents and brokers but he doesn't seem to really understand everything that is going on.

Is it even possible to submit an offer to the bank without first having been approved for lending? How long then (about) do you think we have before we need to be approved? Is there any way of knowing this?

TIA.
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Old 06-20-2009, 01:06 PM
 
Location: Philadelphia
244 posts, read 661,306 times
Reputation: 167
Why would you put an offer in on a house if you have not been approved for a mortgage? This is just a waste of everyones time. Talk to a mortgage company and see where you are at with credit and approval price before you even entertain putting an offer in. Most Realtors including myself will not even present an offer to my client nor will I write up an offer on a property without at least a pre-approval. I will not even work with a buyer unless they have a pre-approval from a mortgage company. Getting your credit in order is the first step you need to take towards home ownership. Without the first step the rest of them are useless.
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Old 06-20-2009, 01:14 PM
 
Location: So Cal
12 posts, read 35,550 times
Reputation: 13
Quote:
Originally Posted by byoak View Post
Why would you put an offer in on a house if you have not been approved for a mortgage? This is just a waste of everyones time. Talk to a mortgage company and see where you are at with credit and approval price before you even entertain putting an offer in. Most Realtors including myself will not even present an offer to my client nor will I write up an offer on a property without at least a pre-approval. I will not even work with a buyer unless they have a pre-approval from a mortgage company. Getting your credit in order is the first step you need to take towards home ownership. Without the first step the rest of them are useless.

This is what I thought as well. My husband really has been trying hard to get everything straightened out (which I appreciate), but I think he is letting himself get caught up in all the hype that the realtor and broker would like to present instead of stepping back and looking at the facts and reality of it all.

I am not sure how comfortable I am with putting in an offer on a house when I have not been approved for financing. It all sounded really fishy to me. BUT.. at the same time, the real estate agent is implying that we NEED to put in this offer before we can do anything else on this particular house. Should I then not trust this agent if he is just wasting everyone's time?
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Old 06-20-2009, 01:17 PM
 
Location: Salem, OR
14,469 posts, read 34,559,495 times
Reputation: 13867
The bank will require a preapproval letter submitted with the purchase and sale agreement (the contract). They won't consider your offer without it.
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Old 06-20-2009, 04:38 PM
 
Location: Palm Coast, Fl
2,249 posts, read 8,244,213 times
Reputation: 1005
Quote:
the real estate agent is implying that we NEED to put in this offer before we can do anything else on this particular house.
Anything else such as...what?
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Old 06-20-2009, 07:02 PM
 
Location: Just south of Denver since 1989
11,267 posts, read 30,423,828 times
Reputation: 7656
It doesn't take a great deal of time to get pre-approved. It takes a great deal of time to complete a short sale.
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Old 06-20-2009, 07:04 PM
 
Location: Cary, NC
35,536 posts, read 61,961,912 times
Reputation: 34946
Quote:
Originally Posted by 2bindenver View Post
It doesn't take a great deal of time to get pre-approved. It takes a great deal of time to complete a short sale.
Probably enough time to clean up the credit, no?
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Old 06-20-2009, 07:18 PM
 
Location: So Cal
12 posts, read 35,550 times
Reputation: 13
Quote:
Originally Posted by palmcoasting View Post
Anything else such as...what?

...before the house can have a short sale package even submitted.

The owner is also a good friend of ours and we are trying to work everything out (as far as timing) so that we are able to put an offer in that can be accepted and then stay in this house.

Here is what we have done so far:

*Met with a loan officer (who also happens to be a good friend of ours) who told us that based on our income, he can easily qualify us for a $175k loan.... as soon as we get our credit cleaned up.

*Confirmed with the listing agent that we would like to use him as our buying agent

*Taken and submitted pictures of the house and the property w/our agent

*Met with "Dedicated Credit Repair," a credit repair company that we were referred to for help with cleaning up our credit. The lady we spoke with said that within 90 days, we should be more than ready to be approved for a home loan

*Set an appointment for Thursday evening to submit an offer on the home with the short sale "package" (which is what threw up a red flag for me and was the cause for my questioning...)


Maybe we are just being foolish and seriously wasting time. I would LOVE to stay in the home we are in. I love our neighborhood and we are really close to my family. Plus, we wanted to try and buy around July of 2010, so in purchasing NOW, we are just speeding up the process (or at least attempting to), but I don't want to get my hopes up that there might be a possibility if we don't stand a chance.
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Old 06-20-2009, 08:26 PM
 
Location: Barrington
53,102 posts, read 37,278,347 times
Reputation: 17266
Quote:
Originally Posted by giampa View Post
We are trying to get the bank to approve a short sale of $125,000 (which would have payments at or around $1000, right? if so, this would save us around $400 a month on housing).
How much do you have for a down payment? If less than 20% down, you will need PMI and the mothly expense.

How much are the property taxes? How much will insurance run? Heat? Cooling?
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Old 06-20-2009, 09:43 PM
 
Location: So Cal
12 posts, read 35,550 times
Reputation: 13
Quote:
Originally Posted by middle-aged mom View Post
How much do you have for a down payment? If less than 20% down, you will need PMI and the mothly expense.

How much are the property taxes? How much will insurance run? Heat? Cooling?

We will have about $6k down (4.8%). Our total mortgage payments (according to the agent, our loan officer, and various online calculators) will be between 950 and 1150 (including property taxes, insurance, etc.) We are already paying for all of the utilities (including heat and cooling), so that won't change the amount we spend per month. We are paying $1375/month on rent.

So... we will be saving around $400 a month. Even if it comes down to only saving $225 per month, it still seems like a wise move... IF we even have the chance.
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