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SHORT SALE.....BAD IDEA?

Discussion in 'Off Topic' started by mouse, Mar 3, 2013.

  1. mouse

    mouse Pacific Northwest Active Member

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    My wife and I might be buying our first home. (we are looking at least). We are not in a rush, have the 20%, and work from home so we can live anywhere. We are looking at a house over by Manzanita beach, but its a Short Sale. I heard this things can take a long time and have many pit falls. Do any of you have good or bad experiences with short sales. Please let me know. Also I am looking for a good short sale agent to help us along (someone with experience!) Here is the home we are looking at? Also we can move anywhere, so I you have some suggested locations in Oregon (wife says we can't leave Oregon - too long to explain). 16700 Marshall WAY, Nehalem, OR - MLS 12612427 - Estately
     
  2. mattg521

    mattg521 portland.,or Member

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    I know nothing about short sales but that looks like a sweet place. I'd love to move to Nehalem. Best of luck.
     
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  3. kukusya

    kukusya King County Wa Active Member

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    In WA it about 4-6 month waiting.
     
  4. Kelzebubba

    Kelzebubba Fort Worth, TX/USA Public Outhouse Active Member

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    Yes, and also you have to be very careful that the people owning it do not gut it. We were looking at some short sales and heard some horror stories from our realtor.
     
  5. Allfat

    Allfat Marion County Active Member

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    When we bought our first home last summer we looked at some short sales, even made an offer on one. The sellers accepted the offer, but we never heard back from the bank. We kept looking at houses, and found one we liked even better a few months later. So we canceled the deal with the last house and moved forward with the non-short sale. We probably waited 4 months with no news from the bank. If you have the time to wait and think it is worth waiting, might as well make on offer. You can continue to keep looking while you wait also, and you are never really committed to it as you can get out of it with the home inspection if you need to.
     
  6. captqc

    captqc Tigard Silver Supporter Silver Supporter

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    I just bought a short sale house and here is how it went: August 2012, wife and I walking the neighborhood, see sign, call to see house, like house, make offer, offer rejected, make counter offer, offer accepted, wait on bank, wait on bank,... bank cancels short sale because another branch of bank tell seller to pay up, he does and it kills the short sale, next month short sale back on, wait on bank, wait on bank.........Now comes January, bank says okay, sign papers and get keys Feburary 4th. If you have the patience then it's worth the wait as we got our house for $30K below asking price. Just understand that most of the time these deals are "As Is" as the bank will more than likely not make any repairs regardless of what the inspector finds (you can back out and get your deposit back though). Good Luck!
     
  7. tunus

    tunus PDX, United States Active Member

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    One thing to be aware of is the fact that the selling agent may advertise a price that the bank will not approve. Don't be surprised if the bank comes back with a counter offer 10-15% higher than what you offered. Another thing that can complicate the deal is the number of mortgages of the current owner. The more parties are involved the more difficult it is to negotiate the deal. If the seller is really serious about short-selling their home (often times it's just a bluff tactic to get the bank to renegotiate their loan), they will have a short-sale team (not just a realtor). That team will work the bank on behalf of the seller to close the deal as quickly as possible with as little impact as possible to the sellers financial situation.

    I was recently in your shoes but decided to go with a non-short sale property to avoid the extra hassle, wait and the potential for really screwed up property (many of the horror stories are true).

    Good luck!
     
  8. Sgt Nambu

    Sgt Nambu Oregon Bronze Supporter Bronze Supporter

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    I know nothing at all about the waits and procedures, but my son bought on a short sale and the house was, indeed, gutted before he took possession!
     
  9. Blitzkrieg

    Blitzkrieg WA Well-Known Member

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    I believe this is one of the worst times in modern history to get into a mortgage for a home

    I do not think we have seen the bottom, yet
     
  10. DieselScout

    DieselScout S Clackamas County Well-Known Member

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    My brother and I both bought houses in the last 3 years, both of them short sales. Both of them took right around 6 months to process. The procedure on your end isn't any different, just many more people having to say yes or no to your offer, including all the people who have a stake in the house. In hind sight it was a very stressful 6 months for the wife and I, with many signed extensions and more paper work. But we ended up with a house we wanted at a really good price. It was worth it
     
  11. tunus

    tunus PDX, United States Active Member

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    It really depends on how long you plan to pay off the mortgage. Assuming you see a 30yr loan through, consider this:

    Purchase price: $200,000
    Loan: $200,000
    Interest: 3.5%
    _________________________
    Monthly payment $898
    Total amount paid after 30yrs:
    $323,312

    Now, suppose the house prices crash again by 50%. Such a dramatic decrease in the home values will be most likely caused by high interest rates. So same house, half the price:

    Purchase price: $100,000
    Loan: $100,000
    Interest: 10.3%
    _________________________
    Monthly payment $899
    Total amount paid after 30yrs:
    $323,935

    So buying the same house for half the price, but paying 3 times the interest rate produces the same monthly payment and almost identical total payout amounts. To somewhat accurately say if it is a good or bad time to buy a home, one must consider if prevailing mortgage rates of 10.3% will decrease the home price by at least 50%. If the prevailing rates are higher than 10.3%, then buying now at higher prices but lower interest rates is a much better financial decision than waiting for lower price, but higher interest rates.

    If you expect high inflation in the future (caused by the relentless money printing), then buying now, fixing low interest rates and taking the full 30 year term to pay off the loan is one of the best financial decisions you can make.
     
  12. nwg19

    nwg19 Auburn WA. Member

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    My wife and I put in two cash offers for two different short sales. On both we offered the asking price.
    Never heard a thing and both were posted sold after awhile. Both ended up back on the market and one of them eventually sold for less than we offered. Hard to figure things like this.
    My realtor felt that the bank took less and financed the buying party.
    We ended up buying a HUD foreclosure, payed cash and the whole deal closed really fast.
    We saw a bunch of stripped out homes when we were looking, and most of the time the pictures didn't show the true condition. There were so many on the market I think sometimes the banks didn't even know they'd been stripped. we'd see the same house re-listed later for less $$$$.
     
  13. Blitzkrieg

    Blitzkrieg WA Well-Known Member

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    tunus.. that assumes the interest rates will go up. IMO they can't..

    Our residence is underwater and still sinking. Thankfully we have paid off land and soon to inherit. Not going to post what plans I have for this place
     
  14. DireWolf

    DireWolf Oregon Active Member

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    We bought an amazing property for an amazing price via short sale just over a year ago.

    Lots of factors involved, they can be unpredictable.
     
  15. Solomon

    Solomon Vancouver Active Member

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    On the course we're steering inflation is coming. With increased inflation comes increased interest, which will bury the real estate market. It'll be a great time to pay cash for a house, but not a great time to finance one.

    The Federal Reserve can only do so much to control it, and they're already overextended.
     
  16. Blitzkrieg

    Blitzkrieg WA Well-Known Member

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    If they raise rates (they are about 0 right now for the banks) you can watch for a total collapse.. it may happen but the results will be total disaster. We are about to build our dream retreat home sans mortgage and we will never be in debt, again
     
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