Anyone know about short sales? (Poway, Bonita: apartment, foreclosures, loans)
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Hubby and I are house hunting and here in the Otay Ranch area in CV there are a ton of short sales. I know that they can take a long time. I have been hearing recently that banks are starting to get them done faster and you can get a pretty good deal. Has anyone done a short sale? Would you recommend doing it or not doing it? We are looking to get a VA loan around the $350k price range. We don't want to waste time if it's going to take forever because we'd like to be out of our apartment by the fall and maybe it might be better to do traditional sale, but if there is a good deal on a short sale we don't want to rule them all out. Any advice or experiences you can share would be great!!
Hubby and I are house hunting and here in the Otay Ranch area in CV there are a ton of short sales. I know that they can take a long time. I have been hearing recently that banks are starting to get them done faster and you can get a pretty good deal. Has anyone done a short sale? Would you recommend doing it or not doing it? We are looking to get a VA loan around the $350k price range. We don't want to waste time if it's going to take forever because we'd like to be out of our apartment by the fall and maybe it might be better to do traditional sale, but if there is a good deal on a short sale we don't want to rule them all out. Any advice or experiences you can share would be great!!
Yes I do.
Here are some tips to really help you nail down a good short sale:
- Dont fall for the teaser listing prices. IF they are far out of line (low) then they are trying to bate a buyer to initiate the short sale process (see below)
- Make sure to find out how many lenders are involved with the owners mortgage. During the boom homes were being used as ATM machines or there was a HELOC taken out, there are multiple holders attached to the propety. This can take A VERY long time to sort through. Not worth it.
- Wells Fargo has been gaining a pretty great reputation as one of the better short sale servicers. But of course, that means Wells has to be the original lender. BoFA still has tons of problems and may take longer. Smaller banks? Dont waste your time.
Look for
- Properties that already have short sale approval. This means that a package has already been sent in to the paper holders for approval from another buyer thus initiating the short sale process for the seller.
- Use websites like Redfin adn cross reference the MLS numbers you might see from other websites that have info. What you want to look for in the listing details is "required short sale approval" "pre short sale" etc.
These little details "may" help you see if the price matches the reality of comps in the area or if the listing agent is strategically pricing it to get that first bite, thus initiating the short sale.
- Deal of a lifetime? Maybe but Keep in mind, while there can be some good deals, the banks still perform the same due diligence for a loan. This means comps are still the same, as is condition and lack of seller concessions etc.
In other words, they are giving away the farm regardless if the whole area is on a short sale bonanza.
Since you are using a VA loan, it can be a problem. Do you have any money to put down? Banks are still nervy about 0 down.
If you dont have any experience with any of the above, make sure to get an agent that walks the walk to help you in regards to short sales. What I mean by that is the SELLERS agent and your agent should be on good terms. Your agent will almost have nothing to do with your sale as its the bank calling the shots and the sellers agent doing all the work with the short sale packaging. So in essence if the sellers agent has little experience packacing a short sale submission to the lender, it can take a LONG TIME to get through.
Also find out of they are willing to work with a 3rd party short sale negotiator. They can be hired by the sellers agent to work as a go between for as crazy as it sounds, almost like a mediator.
Good luck! There are deals out there, but tread lightly and keep a keen eye out for good houses. The many houses that I have seen in short sale status have been neglected for years (for obvious reasons) and require too much work like replacing tons of little things here and there that the seller has no motivation to fix.
Last edited by shmoov_groovzsd; 02-02-2012 at 12:35 PM..
Hubby and I are house hunting and here in the Otay Ranch area in CV there are a ton of short sales. I know that they can take a long time. I have been hearing recently that banks are starting to get them done faster and you can get a pretty good deal. Has anyone done a short sale? Would you recommend doing it or not doing it? We are looking to get a VA loan around the $350k price range. We don't want to waste time if it's going to take forever because we'd like to be out of our apartment by the fall and maybe it might be better to do traditional sale, but if there is a good deal on a short sale we don't want to rule them all out. Any advice or experiences you can share would be great!!
Well I've not worked short sales in California, but I have in Hawaii and Texas. It is still inconsistent as to how long a decision from the bank gets back to the buyer and their agent.
In addition, you mentioned VA, that could delay or even hinder things as well. I'm a big VA advocate, but on short sales and foreclosures, if any repairs need to be made, the bank tends not to agree to make those changes and VA will disallow the loan guarantee. It could also be a situation where the home just won't appraise at the agreed upon price with the bank and then again, either you must come up with the monetary difference, see if the bank will accept the appraised price or move on to another home.
Good luck with the search and I hope it is not stressful for instead joyful.
We just bought a traditional sale here in Bonita. There were also a fair supply of "shorts". The shorts we saw were beat to $#!%. There were some good deals, but a lot of red flags flew up upon closer examination. Fantasy pricing, bad record of fall-outs, and un-cooperative banks. We were on a timetable and living in temp-housing after moving (returning) from the East Coast and needed a house immediately.
We narrowed our search down to two houses, one a short and the traditional we ended up buying. The short was a good price on paper and with the money saved we could've rehabed back into livable condition. it would have been a wash though at the end as far as out of pocket expense.
The house we bought was in pristine condition with real pride of ownership. The sellers did not come down too much as they had already taken it in the shorts on the asking price. We got our house for almost half of what the sellers paid for it in 2005.
I pass the other house on the way to work all the time and it has been in and out of escrow several times since we were looking at it.
I do think there are some deals to be had with "shorts" if you have time, reserve cash for remodels, and patience.
Wow thank you for all the information, it is very helpful! I think we will be better off with a traditional sale... The "deals" sound tempting but also come with an additional price of patience and red tape navigation and us having a VA loan. I don't think I'm willing to play games with the banks and I would rather find a home that is well taken care of and ready for us to move in. I am having a baby this summer and need somewhere to nest asap! Buying a home is already stressful enough! I really appreciate all your advice!
Here are some tips to really help you nail down a good short sale:
- Dont fall for the teaser listing prices. IF they are far out of line (low) then they are trying to bate a buyer to initiate the short sale process (see below)
- Make sure to find out how many lenders are involved with the owners mortgage. During the boom homes were being used as ATM machines or there was a HELOC taken out, there are multiple holders attached to the propety. This can take A VERY long time to sort through. Not worth it.
- Wells Fargo has been gaining a pretty great reputation as one of the better short sale servicers. But of course, that means Wells has to be the original lender. BoFA still has tons of problems and may take longer. Smaller banks? Dont waste your time.
Look for
- Properties that already have short sale approval. This means that a package has already been sent in to the paper holders for approval from another buyer thus initiating the short sale process for the seller.
- Use websites like Redfin adn cross reference the MLS numbers you might see from other websites that have info. What you want to look for in the listing details is "required short sale approval" "pre short sale" etc.
These little details "may" help you see if the price matches the reality of comps in the area or if the listing agent is strategically pricing it to get that first bite, thus initiating the short sale.
- Deal of a lifetime? Maybe but Keep in mind, while there can be some good deals, the banks still perform the same due diligence for a loan. This means comps are still the same, as is condition and lack of seller concessions etc.
In other words, they are giving away the farm regardless if the whole area is on a short sale bonanza.
Since you are using a VA loan, it can be a problem. Do you have any money to put down? Banks are still nervy about 0 down.
If you dont have any experience with any of the above, make sure to get an agent that walks the walk to help you in regards to short sales. What I mean by that is the SELLERS agent and your agent should be on good terms. Your agent will almost have nothing to do with your sale as its the bank calling the shots and the sellers agent doing all the work with the short sale packaging. So in essence if the sellers agent has little experience packacing a short sale submission to the lender, it can take a LONG TIME to get through.
Also find out of they are willing to work with a 3rd party short sale negotiator. They can be hired by the sellers agent to work as a go between for as crazy as it sounds, almost like a mediator.
Good luck! There are deals out there, but tread lightly and keep a keen eye out for good houses. The many houses that I have seen in short sale status have been neglected for years (for obvious reasons) and require too much work like replacing tons of little things here and there that the seller has no motivation to fix.
All excellent advice!
We purchased a short sale last June in Poway. There were two lenders. BofA was the primary; I can't recall the secondary. There had been a buyer, but they ran into the VA snafu and backed out. That let us jump in and take advantage of the short sale process already being started. It was stressful because BofA couldn't get their 'stuff' in one sock and kept missing their own deadlines. On top of that, the second lender kept trying to set all sorts of deadlines as well, but theirs were based on BofA's own ridiculousness timeline that they themselves couldn't hold to. So we ran around like a chicken with out heads cut off meeting all their requests only to have them turn around and extend the deadlines. Very frustrating.
In the end, we closed on a short sale in a little over 30 days, which is almost unheard of. We bought the house for about $35K less than its appraised value. I know this because we just had it appraised last week for a re-fi. Not only are we dropping from 4.625% to 4.00%, the increase in value allows us to drop PMI. So, in all, we're saving about $250/month and the lender is picking up the bill on closing costs.
So yeah, for us the short sale worked out fine. But it is a stressful process. Be prepared.
I'm in the process of getting rid of a property via short sale. We got our offer (all cash) on September 11 . . . and our realtor is finally saying the light is at the end of the tunnel and that the bank could sign off in another three weeks. So, yeah, it can be a long time. Luckily for us, our potential buyers said they could wait out the time (we had eight offers with a week of it being on the market).
short sale is not related to VA sales. short sale is cash deal. so this leaves many people out of the game.
i like short sales i would not do anything else.
having the right agent is everything.
short sale is not related to VA sales. short sale is cash deal. so this leaves many people out of the game.
i like short sales i would not do anything else.
having the right agent is everything.
I don't think short sales are cash only. However, if one is financing I am sure traditional (ie 20%) down is the way to go. Some of the other programs that require less down such as FHA, Fannie and VA are very picky about the property which could be problematic since many of the short sales, as mentioned, are in poor condition. Honestly I think more homes are short sales than not so its probably something anyone wanting to buy right now may want to consider if they have the time and patience.
short sale is not related to VA sales. short sale is cash deal. so this leaves many people out of the game.
i like short sales i would not do anything else.
having the right agent is everything.
This statement is completely false.
Short sales are about the lender taking a loss on the money they lent to the current financed owner that is trying to "go short" on what they owe. The bank has to agree that under specific conditions, to take the loss on what was originally financed AFTER a SS package has been submitted to the lender(s) (basically a plea).
Hence current owners being "upside down" in a market where values have dropped below what they paid for.
Its true that VA loans have nothing to do with short sales directly. However, if there are multiple offers that are on the table to be packaged to the lender for SS approval, its HIGHLY unlikely that a VA or FHA loan is going to go ahead of a conventional or cash offer if all offers were equal.
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