My short sale experience

At the end of last week I closed on a house that was a short sale. Just thought I'd share my experience with the community and hopefully share some of the knowledge that I have gained throughout this experience. And of course, I'll have pictures.

Prior to finding this property, I've been looking at houses for over 4 months. I've looked at somewhere between 50 and 60 properties. I've been pre-approved by Penfed for my mortgage. Wells Fargo is the seller's bank.

6/30 - I notice a new MLS listing, it has just been added that day. I drive by the property and I like it from the outside as well as the neighborhood. Email realtor to make appointment.

7/1 - Look at property with realtor. Owner's were hanging out at their neighbors, so I had a chance to ask all my questions right there. It also turned out that my realtor knew the owners from way back. I tell the realtor to put the offer in at asking price.

7/2 - Offer is submitted. By the time we submitted our offer, there had been multiple offers made on the property. We're asking for a closing date of July 31st! At this point, I am renting just a room to save money, and the situation is starting to deteriorate, so I want to move out sooner rather then later.

7/4 - Our offer is accepted.

7/7 - I submit the signed purchase agreement to Penfed. Penfed had 4.875% on a 15-year fixed mortgage. I decide to wait on locking in the rate.

7/8 - The Penfed underwriter sends me the list of documents that she wants to see.

7/9 - Rate drops to 4.75%. I lock in.

7/12 - Home and pest inspection. Both came back excellent, the only thing that needs to be done is the AC needs maintenance. I pay for this out of pocket knowing that if the sale doesn't go through, I'm out of the money. Total cost: $360.

7/13 - I send all my documents to Penfed. It is 44 pages. Penfed asks for a detailed explanation of any transaction over $2000 in the past 60 days. I have 7 of them...

7/17 - Wells Fargo requests that both me and the seller sign an addendum to the contract.

7/24 - Email my insurance agent about the property so he can start the homeowner's insurance. Penfed requests proof of hazard insurance 5 days before closing. Chris, my insurance agent gets the insurance policy ready to go, I just have to pay the premium. Also, I receive some documents from the title company.

7/24-7/30 - I call my realtor once a day trying to see if we have approval from Wells Fargo yet... The answer is always the same...

7/28 - Penfed requests more documents from me... I send another 13 pages...

7/29 - Penfed officially approved my mortgage

7/31 - This was the scheduled closing date. I call my realtor to see what my options are. He tells me that he just got off the phone with the listing agent, and Wells Fargo approved the short sale! The bank requests us to sign another addendum, and the new closing date is set for 8/7. I call my insurance agent, and pay for the insurance premium. I email the loan processor at Penfed about the new closing date.

8/3 - Title company still hasn't received the documents from Penfed. I call the loan processor and yell at her.

8/7 - Closing is scheduled for 1 pm. I receive a call from my realtor in the morning that Wells Fargo hasn't approved the settlement yet, and the title company wants to reschedule it for 4 pm. Approval didn't come until 2:30 pm. We closed at 4 pm. The only problem that we ran into was the previous owner's had the electricity turned off before moving out.

Now onto the pictures (with the previous owner's stuff inside):

http://i45.photobucket.com/albums/f65/lgyeresi/402674.jpg
http://i45.photobucket.com/albums/f65/lgyeresi/SNC00030.jpg
http://i45.photobucket.com/albums/f65/lgyeresi/SNC00031.jpg
http://i45.photobucket.com/albums/f65/lgyeresi/SNC00032.jpg
http://i45.photobucket.com/albums/f65/lgyeresi/SNC00034.jpg
http://i45.photobucket.com/albums/f65/lgyeresi/SNC00035.jpg

Overall, it's ~2700 sq ft. Price was $164,900. Located in a suburb of Houston.

2 days to approve a Short Sale? WOW. It must have been pre-approved for a certain amount. This is the least hassle I've seen on a short sale.

Thanks for sharing!
This is a BEAUTIFUL house at a GREAT PRICE.
ENJOY.

You mentioned multiple offers, was yours the highest? Did your agent knowing the seller previously help in this situation?

staufj22 said: You mentioned multiple offers, was yours the highest? Did your agent knowing the seller previously help in this situation?

I don't know how much the other offers were for.

Yes, that helped tremendously. Whenever the agent wasn't able to get a hold of the listing agent, he would call the seller directly. We were also able to keep pressure on the sellers, and they were calling Wells Fargo just about every day the 2 weeks before approval. They wanted to get out of The House without the lender foreclosing on them.

Did they mark the MLS under contract while the bank was still approving it? I'm in that boat right now... My offer has been accepted by the seller but now waiting for the bank. Isn't it risky to do all the work ahead of bank approval? Inspection, mortgage, etc...

That is a nice-looking house at a very good price, it seems to me. Good job!

dmk112 said: Did they mark the MLS under contract while the bank was still approving it? I'm in that boat right now... My offer has been accepted by the seller but now waiting for the bank. Isn't it risky to do all the work ahead of bank approval? Inspection, mortgage, etc...

The MLS was marked pending, but continuing to show. Yes, it is risky to move forward with inspection and mortgage before final approval. The reason why I moved forward was because I wanted to get The House as soon as possible.

BEAUTIFUL House lgyeresi. I can't seem to find a similar house at twice the price in New York. May be its time to move out of NYC.

nice house Congrats

I'm still in awe of the response time from the bank. Less than a month!? We've been looking at short sales in south FL, and the average response time is anywhere from 4-6 months. A realtor friend of mine put in a bid for someone in January and just got an answer back last week...with the bank countering $30,000 higher.

Dealguy123 said: Nice pad for sure! You can't find anything that nice around here (DC area) for less than 2.5x your price. You guys sure get screwed with property tax there it seems, which sours the overall cost, but still nice house!

For 2.5x that price, you can't find that house within 30 miles of DC on the VA side

Congrats! Absolutely beautiful house. Thanks for reporting.

Where do you go to find the MLS listings for foreclosed or short sale homes without paying something?

bharatiya said: Where do you go to find the MLS listings for foreclosed or short sale homes without paying something?

The Houston Area Realtors association has a website that lists all the MLS properties for the greater Houston area. The website is har.com. It let's you search specifically for foreclosures, although the average user doesn't know that a property is a short-sale unless it's specifically states in the description. That information is only available to your realtor.

See if your area has a website similar to har.com.

Congrats on the smooth deal! I've been through one short sale and two REOs. They are two different types of beasts I tell ya. Penfed even gave me the hanging-noose on two of them.

Clear and concise. I appreciate you posting your experience.

nomansland said: Congrats! Zillow estimate $205,500. 25% appreciation already!

Oh nevermind... OP I just sent you a PM.

Green. Thanks for sharing.

That in NYC would be close to $1M. I sold a 750 sqr. foot apt. for this price in Baltimore a few months ago. OP got a good price (depending on construction and location)....

ritesh_ks said: BEAUTIFUL House lgyeresi. I can't seem to find a similar house at twice the price in New York. May be its time to move out of NYC.

Got a client doing a short sale with countrywide. A year and a half later, finally the house closed. Got another client doing the same with C-wide, it's been a year, 3 neogotiaters and 2 buyers, still no final date. They keep comming back to me every 3 mo's to do a revised cashflow statement to submit to Cwide.