From my interaction with realtors they take a minor miracle to close. Then bank still needs to be made whole for the deal to come to fruition. And the bank involvement in the process prolongs the closing process. Basically takes a whole lot of patience and capital to complete. Godspeed
If you do a short sale, don't plan on trying to by a house for a looooooooong time. Your credit is going to take a HUGE hit.
I work in loan servicing and am experienced w/ short sales. The above is true. Short Sales require a lot of due diligence on behalf of the bank. They almost assuredly will not make any repairs to the property... they want to recoup as much of the unpaid balance as possible without spending much to maintain the property's condition. Considering that, you stand a much better shot of purchasing with an FHA 203k loan (which allows an escrow holdback - or a reserve fund - to make repairs) than a straight conventional or FHA 203b loan. Better yet would be to purchase in cash (if you have it) or a hard money loan that isn't contingent on an appraisal. The bank typically markets these properties specifically to cash investors. Again, the bank wants to spend as little as possible on these properties and the monthly upkeep of even an abandoned or vacant house can be significant. If you pay cash, there will be no lender appraiser to worry about so the bank refusing to repair the property before sale would not necessarily impinge you from buying the house. Make sure your contract has a clearly defined inspection contingency so that if you back out within said contingency period, you'll retain the entirety of your earnest money. And yes... slow and steady wins the race. Don't expect to purchase a property in 3 weeks. I would say that 60-90 days should be expected at minimum. GOOD LUCK!!
Wow, thats a while to close. Do banks not typically take an offer in a conventional loans in short sales? I definitely dont have the cash to buy outright. The house itself is in pretty good condition, so I wouldnt ask for much repair.
They'll definitely consider a conventional offer, but say their list price is $100,000 and you offer $90k conventional and a competing offer comes in for $80k cash. If it were an individual selling their house, they'd put up with the delays in loan approval for that extra $10k. The bank, on the other hand, wants to turn and burn their inventory as fast as possible so they would definitely give more weight to the cash buyer. Condition is a huge factor. Your lender appraisal (beware, appraisals are expensive right now) will determine what happens. If they call a repair out on the appraisal and the lender won't fix (or allow you to fix before closing), you may be up a creek... See what inspections they'll allow you to make before you put in an offer. Maybe on a showing with your Realtor, you can bring a home inspector with you and get their opinion.
I know we tried to buy one that was owned by Chase. It was a nightmare and Chase didn't seem to know what Chase was doing. After 45 days of trying to get some consistent input from Chase we finally walked away.
yes we put in an actual offer but their law department was also involved and the it was like one hand didn't know what the other was doing. Yes I got my earnest money back.
