Short Sale Frustrations!

[Fishlips]

Everyone knows the economy is in the toilet...but I have been saving all my pennies for a while and planning and scheming to be able to buy my first house...along come fiance and we can finally afford a house together. It's the perfect time to buy, everything is cheap, people are desperate to sell, banks are desperate to get foreclosures off their books, and there is a TON of inventory.

So we found the perfect house, it was adorable! But it was already in contract...

So we moved on to another in the neighborhood. We liked it just as much! But the owner (who also happened to be the listing agent), didn't like our offer and didn't submit it to the bank and someone else made a higher offer so we lost that one too.

There was a third house in that neighborhood we liked (I know it sounds like a lot for one neighborhood, but it's a "air condo" complex with about 100 units. Air condo=condo association, but all the units are detached so they look like individual houses not traditional condos), we put an offer on it. It would still be an amazing deal. It was what is called a short sale. A short sale is when the owner tells the bank(s) that they are heading towards foreclosure, and that they would rather the bank sell the property not gain anything from it, but not get dinged for it either. The bank makes all the decisions about how much it sells for, and the owner is forgiven of the difference in what it sells for and what it owed on it.

We put the offer on it December 4th, we still have yet to hear back if the offer was accepted! Legally, we were obligated to it for 6 weeks, but after that we can walk away and not get assessed any penalties. We decided to give them a few extra weeks (there was massive snow, floods and holidays). But it's been 3 weeks since our legal obligation ended...we told our agent we would wait 4 weeks...

And just to add to all this, I hate the apartment complex I live in...I love my apartment, but the complex is full of big doodoo heads! And it's run by a big huge doodoo head! And the lease ends Feb 28th! I get to move but not into my new house, fortunately I have a mother that is going through a bout of empty nest syndrome and is happy to let one of her little hatchlings move back home, rent free!

I'm not trying to get people to not do short sales...they are a great deal if you can get one, but MY STARS...I JUST WANT A HOUSE!

[L.J.Aguirre]

omg we want a house too! victor and i are going through a va loan. it's a loan for veterans thats 0% fixed for the life of the mortgage. with that loan, we are looking at paying a 400 mortgage for a house built about 3 years ago. of course it is small (3bedroom 2 bath) but it's only me, him and kai (OUR PUPPY) for now. but then we decided to put that on hold till the baby is born to see if we can handle everything plus the baby. i suppose that's smart but it has put me in a depressing mood lately. I WANT A HOUSE DANGIT!

[savepaws]

Wow...we put in an offer for a house that had been repo'd by the bank and just waiting a couple of days to hear if our offer was accepted was hard. I can't imagine sitting in limbo for months!! I hope it goes through soon or I hope you find something better!

[BarceloMayaPalaceBride]

Yep. I work at RE/MAX and deal with short-sales every day. Some of them drag on for months and the closing date keeps getting pushed back and back. Some of them never make it to closing. (Something falls durring the inspection, or the lender) I wish you LOTS of luck and know it can be frustrating!!! :)

[Fishlips]

We gave up a little early because we found a house we like better and it's not a condo.

But it needs work! It's livable now, but definitely not so bad I want to throw up when I think about it. It's a foreclosure, so no more short sale shenanigans!

[Nekochanpurr]

Aww! Good luck! I hope you get what you are looking for. *^^*

[Jacobs_Girl]

First good luck!! I hope you find the home of your dreams!

A short sale is when the owner tells the bank(s) that they are heading towards foreclosure, and that they would rather the bank sell the property not gain anything from it, but not get dinged for it either. The bank makes all the decisions about how much it sells for, and the owner is forgiven of the difference in what it sells for and what it owed on it.

This is actually partially incorrect. Since we are going through the same thing and I am doing a lot of search on it.

A short sale is when the bank decides to sell the house for less than what the loan is for. (they rather get something than nothing) The owner is not forgiven and still owes the money left over after sale.. if you think about it, you rather owe $250,000 or $50,000?

The house we are purchasing (waiting for their acceptance letter should be today) appraised at $325,000 and listed to sell at $234,800 we are purchasing it for $220,000.

[Fishlips]

A short sale is when the bank decides to sell the house for less than what the loan is for. (they rather get something than nothing) The owner is not forgiven and still owes the money left over after sale.. if you think about it, you rather owe $250,000 or $50,000?

The house we are purchasing (waiting for their acceptance letter should be today) appraised at $325,000 and listed to sell at $234,800 we are purchasing it for $220,000.

See I was told that the owner doesn't owe that amount, but they must pay capital gains tax because they are forgiven of the debt. Think of it like winning the money, you have to pay tax on it but someone else gets what you won.

Either way....third house, we put an offer on just got out bid and we can't match or beat the other offer. On to plan 47....arg!

[Jacobs_Girl]

See I was told that the owner doesn't owe that amount, but they must pay capital gains tax because they are forgiven of the debt. Think of it like winning the money, you have to pay tax on it but someone else gets what you won.

Either way....third house, we put an offer on just got out bid and we can't match or beat the other offer. On to plan 47....arg!

capitol gains is when the owner makes profit on the sale, Capitol loss is when the lose money on the sale that is not over the amount of any capitol gains and that they can only claim $3000 on their tax returns.

It is the banks descisions to determine that and I doubt they are just going to give that money away. Like our shot sale they would of lost 114,000 capitol loss. The banks probably going after the borrower which either he has to take another loan or its going on his credit. Same thing as him defaulting on a credit card.

[WebLady]

So many house buying frustrations lately ... hope it all works out for you and you guys find a nice place :)

[MrsDM]

Oh hun, I can relate to you! I am going on our third house that we will be putting an offer in and none of them were short sales and they fell through for different reasons. The first one was on the market for 10 days and we ended up in a bidding war, the second one was accepted and had the inspection from hell and we had to back out losing our earnest money.

I feel your pain - I just want a house too! We have to be out of our condo by March 27th, so we have a month to find a house, get an accepted offer, clear inspections/appraisals and move in.

So did you put an offer in on the foreclosure????

[Fishlips]

Yes...we got out bid. Then we went back to a house I liked better than him, and tried to put an offer on it, and it was already pending inspection...so lost that one too.

Now were packing, moving into mom's...which, while I love my mom, will probably only focus us more on getting a house.

And, trying to look on the bright side, we can save a little more money while were living rent free. But still we'll be moving into the room I moved out of when I was 18...

[MrsDM]

Sorry you didn't get any of the houses!!! Keep looking, the perfect house is still out there for you guys!! :)

[Nekochanpurr]

i'm sorry you didn't get your house, fishlips!

[Jacobs_Girl]

Yes...we got out bid. Then we went back to a house I liked better than him, and tried to put an offer on it, and it was already pending inspection...so lost that one too.

Now were packing, moving into mom's...which, while I love my mom, will probably only focus us more on getting a house.

And, trying to look on the bright side, we can save a little more money while were living rent free. But still we'll be moving into the room I moved out of when I was 18...

sorry you didnt get the house! Same thing happened to us, we were outbidded as well the very last minute. I so very upset!

We decided to wait a few months and try looking again.

Good luck on the next house

[saltyveruca]

Oh I feel your pain. We put an offer in just before Christmas and we're still waiting to hear. Got an email last week that they'd be making a decision, so soon we will know one way or another.

Ours is a short sale too, so we knew we'd be waiting. For us, it was just a question of whether the house is worth the frustration of waiting so long. This one is-so hopefully it will pay off in the end!

[Brian's Bride]

I'm sorry you didn't get your house yet! Don't despair, it's out there somewhere just waiting for you guys!

[Fishlips]

So we're now living with Mom, of course were still looking at houses, and we've found a few we like. Buuuuuttt, now that the pressure is off (we have no lease that's about to end) I feel like we can get a better deal no matter what we get, and I worry every house is wrong!? And I don't want to have to chose between location and house versus condo/townhouse and price.

Prices are dropping like a box of rocks and I wonder if we could get a better deal if we wait just another month, then just another month, etc.

[MrsDM]

Hm. Coming from somebody who thought she fell in love with a house, then returned to the house days later only to find out that it was just lust, I think if you see something that is appealing to you, go and look at it. I know its hard not to think of what could be if you wait just a little longer, but you will know if its the right house.

On the flip side, what if you wait too long and miss the perfect house? If you see something, go and look. You never know!!

[firespirit]

First good luck!! I hope you find the home of your dreams!



This is actually partially incorrect. Since we are going through the same thing and I am doing a lot of search on it.

A short sale is when the bank decides to sell the house for less than what the loan is for. (they rather get something than nothing) The owner is not forgiven and still owes the money left over after sale.. if you think about it, you rather owe $250,000 or $50,000?

The house we are purchasing (waiting for their acceptance letter should be today) appraised at $325,000 and listed to sell at $234,800 we are purchasing it for $220,000.

Actually whether or not you have to pay the bank back varies from state to state and agreement to agreement, anyone trying to do a short sale should study up on their state laws and read the agreement very carefully.

I used to own a house in Iowa, I moved and was unable to sell or pay for the house. My bank actually chose to do a deed in lieu of forclosure, but because of Iowa state laws both a deed in lieu and short sales are considered non-judicial forcloures and the bank could not ask me for any difference in amount owed and what they got for the house.

If it were a short sale I could potentially still be responisble to pay a capital gains tax (but since I lived in the house for 2 out of 5 years I would have been able to write off up to 250,000, since I was single at the time). However, since the company accepted a deed in lieu, that means I turned over my deed and they accepted that as payment in full of what I owe, so there was no difference in amount. Either way, the loan wasn't even close to $250,000 so there was no worry abotu having to pay capital gains tax.

The banks determine whether or not they will accept a short sale based on how much they think it will cost them to forclose on the house and what they think they can sell the forclosure for. It costs money to sell the house and if they already have a willing buyer at a reasonable write off, they might choose to do that. There are a lot of fees associated with a forclosure, court fees, listing fees, maintanace fees, selling fees, etc. Plus there is no guarantee someone will offer much more for the house than the amount of a short sale.

[saltyveruca]

We are still waiting to hear about our short sale. Seriously. :bbeek:

*impatiently waiting*

[Fishlips]

We put our offer on beginning on December and waited 9 weeks before we moved on. I just found out yesterday that the offer was accepted. The listing agent called my agent and asked if we were still interested. Unfortunately for them, we have found better houses and better deals since then and if we wait for it to finish foreclosure proceedings my agent, FH and I think that we could get it for lower than our original offer. But again we're just not as interested in that property as we once were.

Crazy banks! If they would just work these things out they would get more money for the properties, waste less time with foreclosure proceedings and in general help everyone that is about to lose everything. SO ridiculous!

[MrsDM]

That is the funny thing about real estate. Once you think that you've found the perfect house, go look at a few more and that house wasn't so perfect. I'm glad that you guys are finding better houses and deals though! Have you put any offers in, or were you still planning on waiting a bit longer?

[Fishlips]

In total we have put 6 offers on 6 different places, that have fallen through for 6 different reasons. I'm still super frustrated with this whole situation and most days wanna give up, but we can't exactly live with my mom forever so whether I wanted to or not, we have to keep pushing forward. We have looked at over 100 houses, ranging from needing to be razed to turn key...and the real estate tree has yet to provide fruit...

We actually recently found a perfect house, there was nothing about this place that either of us had to compromise about, and we put a full price offer. And the listing agent didn't even acknowledge our offer. It took my agent's broker calling his broker to find out that they had accepted another offer. Barring that singular communication we have heard nothing else about the property. The listing broker suggested we call back in 2 weeks and see if the offer they accepted fell through. Personally, I think the whole situation is BS, so I started the "I hate Daks Falk (listing agent's name)" club...wanna join?

[firespirit]

Haha, I just noticed you're in Kirkland! If you haven't found a house yet you could always come look at ours! We're putting is up for sale at the end of this month. Hehehe. (But the commute across 520 does suck going from the U-district to Kirkland in the morning...)

[Fishlips]

at this point a house is a house...shoot me the MLS # when you get it listed... :)

[firespirit]

at this point a house is a house...shoot me the MLS # when you get it listed... :)

Ours is a little different, it's one of the few (<500) floating homes in the area. I actually just put a link on onewed that has a picture of the outside, it shows the house covered in snow from this past december. http://forums.onewed.com/showthread.php?t=24741.

But yeah, I'll pm you an MLS when we get one.

Oh and our listing agent will be MarJean Krupp, she hasn't done a floating home before but we liked her WAY better than other agents we talked to that tend to list floating homes.

[Fishlips]

Ours is a little different, it's one of the few (<500) floating homes in the area. I actually just put a link on onewed that has a picture of the outside, it shows the house covered in snow from this past december. http://forums.onewed.com/showthread.php?t=24741.

But yeah, I'll pm you an MLS when we get one.

Oh and our listing agent will be MarJean Krupp, she hasn't done a floating home before but we liked her WAY better than other agents we talked to that tend to list floating homes.

So cute! I would love to live on the water, I know FH would buy it just because the boat came with it, working or not. (He's sitting next to me shaking his head saying "I'll have it working in two days...I wanna fish!") It's very Sleepless in Seattle, and how fun to say you lived on a houseboat at least once.

We're definitely learning patience with this whole process.

[saltyveruca]

Found out our contract didn't go through. Waiting to hear if we can put in another one on it, but it doesn't sound favorable. Apparently the owners are getting divorced, don't want to sign paperwork, whatever. It looks like it's going to foreclosure. We could snatch it up then, but I am not willing to wait that long. So we're going to keep an ear to the ground on this one, but I am back to the drawing board on the house search again. :bbeek:

[Fishlips]

Found out our contract didn't go through. Waiting to hear if we can put in another one on it, but it doesn't sound favorable. Apparently the owners are getting divorced, don't want to sign paperwork, whatever. It looks like it's going to foreclosure. We could snatch it up then, but I am not willing to wait that long. So we're going to keep an ear to the ground on this one, but I am back to the drawing board on the house search again. :bbeek:

That is what is happening with the first offer we put on a place, its now going to foreclosure, and we could probably get it for way less than we offered before (did I already say that, in a previous post?)

That really sucks for you! People get so angry and blind over stupid things, if they would just sign the paper they could get away from each other and end a bitter divorce.

I actually just found out that one of our gagillion offers that got out bid, was actually a bluff. The listing agent told us there were other offers, there weren't and now its back on the market and they keep lowering the price. So far $15K since we offered on it. It's total BS that the listing agent did that. Isn't some offer, decent price and strong buyer, better than nothing?

[Fishlips]

so a quick update, still spending every waking moment looking at house either in person, or online....

Put an offer on another, I think this is #7...and the bank said it was too low! Are you F-ing kidding me? have they heard of negotiating? I mean it's listed at $254,900 and we offered $215,000...That's NOT unreasonable! Not even a counter offer!

The real estate gods hate me, well, us!!!

[MrsDM]

so a quick update, still spending every waking moment looking at house either in person, or online....

Put an offer on another, I think this is #7...and the bank said it was too low! Are you F-ing kidding me? have they heard of negotiating? I mean it's listed at $254,900 and we offered $215,000...That's NOT unreasonable! Not even a counter offer!

The real estate gods hate me, well, us!!!

I don't think its unreasonable providing the house wasn't worth their asking price!

Ya know, its amazing how quick the bank responds when the offer isn't good enough, but if its something worth considering, man, they will just take their time!!

Hang in there, hun!

[firespirit]

so a quick update, still spending every waking moment looking at house either in person, or online....

Put an offer on another, I think this is #7...and the bank said it was too low! Are you F-ing kidding me? have they heard of negotiating? I mean it's listed at $254,900 and we offered $215,000...That's NOT unreasonable! Not even a counter offer!

The real estate gods hate me, well, us!!!

That is not an unreasonable offer. I think maybe the problem in this case might be that you are dealing with a bank and I think a lot of banks feel that they don't need to negotiate. Your agent should have access to how long that property has been on the market and at what prices, so the longer it sits there without any interest or offers, the more leverage you might have because it does cost them money to keep the property up to show people.

[Fishlips]

That is not an unreasonable offer. I think maybe the problem in this case might be that you are dealing with a bank and I think a lot of banks feel that they don't need to negotiate. Your agent should have access to how long that property has been on the market and at what prices, so the longer it sits there without any interest or offers, the more leverage you might have because it does cost them money to keep the property up to show people.

Actually, since we've been looking for so long we've found a couple sites that will give us majority of the info our real estate agent can get. And we know it's been on the market for about 5 months. but not available for sale that entire time. There was the time it takes for the foreclosure process, and cleaning it up, etc. We actually offered on it before, for $205k, so we've gone up 10K and they've come down 15K so far.

Just a side note, my agent and the listing agent (who also happens to be the broker) aren't exactly BFFs, so she may be putting her personal feelings in it. But I think we're the only offer(s) on it so far. We're gunna wait and see if it will sit on the market longer..

[Fishlips]

Ok so another update...

I work at Costco, and for those of you that don't know it's like a Sam's (only in my opinion much better)...anywho, you need a membership to shop. When people forget theirs we can print temporary cards.

The other day I was working in the membership dept, and a woman came up to me to get a temporary card. I found what I thought was her account and verified a little info, like what company she was on the membership for. It was a real estate firm I've had dealings with...so I ask, "Do you know Daks Falk?" She says, "Yes, my husband is his broker." I told her my story and she knew exactly the deal I was talking about. But she did seem hopeful for me to keep an eye on it, just in case the other offer falls through.

I swear the gods are taunting me!