Complications...
Limbo.
That's where I find myself at the moment. Although it doesn't sound like a good place to be, it's an improvement over my former status of worrying about whether or not I would make it to limbo. Now I'll try to outline the most complicated part about buying my house.
The house was listed on the MLS like a normal real estate listing. The only thing unusual about the listing was that in the description it read 'short sell - sellers lender must approve offer'. I didn't think much of it until I talked to my agent about what it meant. My agent did some digging and found that it was indeed a short sale - which means that they were asking less than what the borrower owed on the house. Also, he talked to the sellers agent about the process that they used for short sales.
This was the most convoluted process I'd ever heard of.
According to the sellers agent, they first had to submit their application to the bank to get the short sell approved - which takes 4-6 weeks. Only then would they start accumulating bids. After they arbitrarily decided it was time to stop taking bids, they would just pick the best one and proceed with the sale. These steps would've added an unknown amount of time to the process.
I was very discouraged after hearing about this and continued to look at other houses. However, the more houses I looked at, the more I wanted my gem house. I expressed to my agent that I really wanted this house. He explained to me that his broker handles short sales much differently. First they entertain legitimate offers and then accept one contingent on bank approval of short sale. Then they submit the accepted offer with the short sale application to the bank for approval. This cuts out an unknown amount of waiting time on the back end of the process and gets me a yes or no answer much sooner. I asked my agent to do what we needed to do to get the house.
He suggested that we offer $3000 more than the asking price and ask them to put that towards closing - so they'd end up with their full asking price. Also, my agent said he'd put pressure on the sellers agent to do the process our way so I wasn't left hanging in an even worse limbo - not even knowing if my offer was going to be accepted. I went with it.
The sellers agent did end up seeing the light. They agreed to our process and accepted our offer contingent on bank approval of short sale. So, I now have a contract on the house contingent on bank approval. My financials have been run, but we haven't yet submitted for final underwriting because we don't yet have bank approval. Once we get approval we can set a closing date, lock in a rate and submit every little detail about my financial situation to my lender for final underwriting. My agent is confident that I'll get the house.
The main thing that I don't understand is how the house could even be listed if they were using the sellers process. In their method, the house wasn't even on the market until the bank approved the short sale because they weren't even entertaining offers until that point. I'm pretty sure that the sellers agent is a rookie.
I'm very excited! I can't wait to move! I'll definitely let everybody know when I get the final decision and then the remaining schedule before the big housewarming party!
That's where I find myself at the moment. Although it doesn't sound like a good place to be, it's an improvement over my former status of worrying about whether or not I would make it to limbo. Now I'll try to outline the most complicated part about buying my house.
The house was listed on the MLS like a normal real estate listing. The only thing unusual about the listing was that in the description it read 'short sell - sellers lender must approve offer'. I didn't think much of it until I talked to my agent about what it meant. My agent did some digging and found that it was indeed a short sale - which means that they were asking less than what the borrower owed on the house. Also, he talked to the sellers agent about the process that they used for short sales.
This was the most convoluted process I'd ever heard of.
According to the sellers agent, they first had to submit their application to the bank to get the short sell approved - which takes 4-6 weeks. Only then would they start accumulating bids. After they arbitrarily decided it was time to stop taking bids, they would just pick the best one and proceed with the sale. These steps would've added an unknown amount of time to the process.
I was very discouraged after hearing about this and continued to look at other houses. However, the more houses I looked at, the more I wanted my gem house. I expressed to my agent that I really wanted this house. He explained to me that his broker handles short sales much differently. First they entertain legitimate offers and then accept one contingent on bank approval of short sale. Then they submit the accepted offer with the short sale application to the bank for approval. This cuts out an unknown amount of waiting time on the back end of the process and gets me a yes or no answer much sooner. I asked my agent to do what we needed to do to get the house.
He suggested that we offer $3000 more than the asking price and ask them to put that towards closing - so they'd end up with their full asking price. Also, my agent said he'd put pressure on the sellers agent to do the process our way so I wasn't left hanging in an even worse limbo - not even knowing if my offer was going to be accepted. I went with it.
The sellers agent did end up seeing the light. They agreed to our process and accepted our offer contingent on bank approval of short sale. So, I now have a contract on the house contingent on bank approval. My financials have been run, but we haven't yet submitted for final underwriting because we don't yet have bank approval. Once we get approval we can set a closing date, lock in a rate and submit every little detail about my financial situation to my lender for final underwriting. My agent is confident that I'll get the house.
The main thing that I don't understand is how the house could even be listed if they were using the sellers process. In their method, the house wasn't even on the market until the bank approved the short sale because they weren't even entertaining offers until that point. I'm pretty sure that the sellers agent is a rookie.
I'm very excited! I can't wait to move! I'll definitely let everybody know when I get the final decision and then the remaining schedule before the big housewarming party!
2 Comments:
Hooray...but, watch yourself. You should have your loan already pre-aproved and locked in at a percentage point. That should be done before even looking at a house. It shows that you are financially sound, and protects you by allowing you to shop around before you settle on a house. Make sure they don't screw you at the last minute on the rate. Also, you should check to see if there are any other bids on the house and what that amount is. I'm not sure if that is possible...but it is one pitfall that I landed in. We had another bidder on the house. Now, if they actually existed or not...I'll never know....this should be a transparency aspect, but may be used to ratchet up the cost a couple grand. Good luck, god speed.
-J
I'm already pre-approved, but we haven't locked in a rate yet because we expect rates to fall before we close.
There were two other bids on the house. One used down payment assistance, so that was not favorable. The other bid was within $400 of my bid. My agent was able to convince them to take my bid, along with my pre-approval and their short sale application, submit the whole package to the sellers lender for final approval. We didn't want to lock in a rate just yet because it's still possible I won't get this house, and the lock would have been only for 30 or 60 days. I don't have to be out until the end of November and we started doing this in late September. Also, there was no guarantee that the process would be over by the end of November, so we saw no reason to lock in a rate just yet.
I had already ratcheted the cost up a couple grand voluntarily because I really wanted this house. I had come to my limit and that's when we decided to put more pressure on the sellers agent to accept our bid and follow our process.
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