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eesquared
03-23-2011, 08:03 PM
Ok - not a car question.

Has anyone ever bought a house that was listed as a short sale?

Hubby's company is relocating us and we put a contract on a short sale house. The bank that holds the seller's mortgage is...you guessed it: The regulation-bending Bank of America.

Second question: Has anyone ever dealt with BoA in a short sale?

chiph
03-23-2011, 08:58 PM
No personal experience with a short sale (either side), but from what I've read, BofA is astoundingly inconsistent in how they manage these, so I would pick out a backup house just in case they cancel the sale.

Something you might consider is putting in a "back out fee" clause in your offer. If they cancel the sale between offer acceptance and closing, they would owe you $x for your trouble.

Chip H.

ducky1776
03-23-2011, 09:01 PM
I've bought several houses over time, but not on a short sale. We have a nationally syndicated real estate column written by Edith Lank in our paper. She's written extensively on short sales. See what you can find from her online or <gasp> from the library as I think she's just written a book. I think one of her biggest pieces of advice was to make sure you had a lawyer!

Eric
03-24-2011, 05:39 AM
Ok - not a car question.

Has anyone ever bought a house that was listed as a short sale?

Hubby's company is relocating us and we put a contract on a short sale house. The bank that holds the seller's mortgage is...you guessed it: The regulation-bending Bank of America.

Second question: Has anyone ever dealt with BoA in a short sale?

I watched our old house get short-sold by the people who bought it from us. It's not pretty. Sellers are desperate (and possibly vengeful). Bank/lender is greedy and indifferent (nice combination).

The possibilities here are good for a short-sale buyer - if you don't mind the apparently often interminable wait (months, sometimes) before the bank deigns to respond to the offer you've made, even after the seller has accepted. As Chip says, definitely have a back-up. Multiples, in fact. And I like his suggestion about putting in a clause that compensates you for any losses you incur if the deal falls through because of bank delays/intransigence.

Also: I'd inspect the hell out of the house before I signed anything. The people who lived there before who lost the house likely at minimum did not do necessary upkeep (after all, they were broke - right?) and may even have done stuff to the house as "revenge" against the bank/lender (but really ultimately against the next sucker who buys the place... you).

chiph
03-24-2011, 09:05 AM
Yep. I've seen videos of houses where the departing owners just trashed the place - spray painted the walls, ripped out anything they could sell for a dollar (appliances, bathroom fixtures), knocked holes in walls just out of spite, etc.

And then there's the situation where the house is sitting vacant for a long period of time -- air conditioning unit thieves will steal the outside units. Copper thieves will pull the wiring out of the walls (they back a truck into the garage and tie a tow cable to the fusebox, and just puulllll). And you can also get squatters.

I'm not trying to say buying a short-sale is a bad idea -- just that you need to prepare for the worst. Having an inspection done the morning of closing would be a good idea, and leave a friend parked in the driveway until you call and say you've signed the mountain of paperwork, and now covered under your insurance.

Chip H.

eesquared
03-24-2011, 10:15 AM
Thanks Chip. We did not think of the back-out fee, but if the deal falls through, we have only risked $100, so I can live with that.

Lawyers - good idea. Now I have to find one. Bait for the sharks, please.

eesquared
03-24-2011, 10:16 AM
Thanks Ducky - I'll google Edith.

eesquared
03-24-2011, 10:28 AM
Thanks Eric.
The sellers and bank have accepted our offer. We have already had repair estimates, and the inspection is scheduled for tomorrow. There are some issues with the house, but nothing that is a deal-breaker. The house has good bones, and with the money we would have spent for another similar house that is updated and in good repair, we can do the upgrades and repairs ourselves and make the house like we want it.

The sellers were not resentful - they just want out of the mortgage and are willing to work with us. They have not stripped anything out of the house - they just could not afford to maintain it. some of the repairs that they did were cheap and shoddy and will have to be re-done. But there is nothing that affects the structural integrity of the house, and nothing major shows up yet, except the roof.

Apparently, there was a huge hailstorm last summer, and the roof was significantly damaged. Two other houses on the same block had the roofs replaced after the storm. Two roofers and two repairmen have told us that the condition of the roof makes the house uninsurable. We are waiting to hear back from the seller's insurance company regarding the roof. The sellers have agreed to file it with their insurance company and we have agreed to pay their deductible up to a certain amount for replacing the roof.

The house has only been vacant for about 5 months, and there are no signs of B&E, or squatters, or any other debauchery.

We have already met the next-door neighbors. Perhaps they will not mind keeping an eye on the place while we close.

chiph
03-24-2011, 05:05 PM
Good news, then!

Chip H.