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I Didn't Do It!
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Discussion Starter #1 (Edited)
I need a little info, and would greatly appreciate it if someone with any info or knowledge on the topic could post or pm me for more details, I'm looking into a house, and would like to know more about whats involved in shortsales, how it works etc..

thanks if anyone can help, if you need more info please pm me.
 

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Shortsales go on when you already own a house, not when buying one. Not so sure what your asking but....

For instance, say your loosing the home, as alot of Americans are doing right now. Instead of having forclosure, you short sale the house. The bank has to approve first before anything. It helps with credit issues. Havent touched real estate topic in a few months, so a little rusty. But you do need to be more specific on what you would like to know if you want answers:)
 

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I Didn't Do It!
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Discussion Starter #3 (Edited)
Shortsales go on when you already own a house, not when buying one. Not so sure what your asking but....

For instance, say your loosing the home, as alot of Americans are doing right now. Instead of having forclosure, you short sale the house. The bank has to approve first before anything. It helps with credit issues. Havent touched real estate topic in a few months, so a little rusty. But you do need to be more specific on what you would like to know if you want answers:)
all i know is my neighbor is selling his house, and something was said about a shortsale, and some other stuff, i just wanted to know exactly what it was, I guess i have to talk to him and find out whats really up.

sorry :p useless thread by me lol
 

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if your on the market for a house, stay away from short sale.... they would never get approved and when the bank repo the house back and put it back on the market , 99% of the time its going to be a lot cheaper too!

i just closed escrow on my first house! great time to buy! first time buyer tax credit!! woot woot
 

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*SNICKER SNICKER*
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http://en.wikipedia.org/wiki/Short_sale_(real_estate)

The skinny is though, it's to the current home owners advantage to try to short sale the house, not necessarily for the new BUYER!

The short sale only means the home owner owes more on the home than it is currently worth, and the mortgage company has to agree to write off the loss between the offer amount and the amount actually owed on the current note. (Yes it helps the home owners credit but only slightly) ... if the home owner runs into one of the rare times when a short sale does get approved, the remaining balance is written off so to speak, and the former home owner is given a 1099-MISC and has to pay taxes on the unpaid balance to the IRS as income for that year.
 

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Blah Blah Blah
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PM me. I do short sales day/night. You can call me and Ill explain everything you need to know based on what you know already about the situation.
-Matt
 

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I Didn't Do It!
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Discussion Starter #7
from what i know he had the house quoted at like 120K-ish, and was letting the house go for 70k, to another couple, which i think fell through, i was tempted to buy it at the 70 pricetag, its a decent house.

i'll pm you turbois
 

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I love sequentials!
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70k ... a house

You should be able to finance that on a McDonalds salary, it should be easy to get

What's crazy is the retail value is 120k ... that'll buy you a trailer in a trailer park out here. If it's a nice house, go for it!



from what i know he had the house quoted at like 120K-ish, and was letting the house go for 70k, to another couple, which i think fell through, i was tempted to buy it at the 70 pricetag, its a decent house.

i'll pm you turbois
 

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if your on the market for a house, stay away from short sale.... they would never get approved and when the bank repo the house back and put it back on the market , 99% of the time its going to be a lot cheaper too!

i just closed escrow on my first house! great time to buy! first time buyer tax credit!! woot woot
That's correct but sometimes banks prefer taking a hit instead of having to sell properties.

If the offer is decent it might work.

But like said above, I'd stay away from short sales. Experience talking.
 

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http://en.wikipedia.org/wiki/Short_sale_(real_estate)

The skinny is though, it's to the current home owners advantage to try to short sale the house, not necessarily for the new BUYER!

The short sale only means the home owner owes more on the home than it is currently worth, and the mortgage company has to agree to write off the loss between the offer amount and the amount actually owed on the current note. (Yes it helps the home owners credit but only slightly) ... if the home owner runs into one of the rare times when a short sale does get approved, the remaining balance is written off so to speak, and the former home owner is given a 1099-MISC and has to pay taxes on the unpaid balance to the IRS as income for that year.
Yes, all true. BUT, right now shortsales are being approved like crazy. Banks prefer to just cut their losses on the balanced owed, than to get fucked with the negative balance PLUS the cost to repo a home, which from my knowledge is about 30,000$. So thats why there is so much short sales going on. And there is no paying taxes on the negative balnce right now. Its a straight up loss. Thats just on the property you live in. No paying taxes on that property. But if your an investor and have several properties and got fucked with the economy, you have a slight chance for paying taxes on the properties you dont love in. Thats just a slight chance though. But most likely if the shirt sale on one of those properties DOES get approved, your good on taxes. I know this because i tried helping my parents with both properties they own, a personnal usage and investment property.
 

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Time for change
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As far as making an offer to the house.
First make the offer of 70K. If they don't accept call back in 2 weeks, Offer $66K If they don't accept, call back in another 2 weeks, offer $64K. If they don't take that wait 2 weeks again, offer $61K. They won't accept that but ask to work out a deal, then you can give them $64K and thats it.
 

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I Didn't Do It!
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Discussion Starter #13
the house is currently listed at 79k, so i can see why the bank would do it. im going to actually try offering lower, since i know the bank already accepted 70k
 

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mount /dev/disk1s10 FFUU
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whats unfortunate is if you have ANY collections items you won't qualify for ANY mortgage...

Some shit happened in my past and as a result I've got items in collections due to other people in my family.. Because of this I cant get a mortgage even though the house i was trying to get ... i was technically qualified for enough money to buy 3 of them..
 

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Ex-hardtopper
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Banks already have a bottom dollar figure predetermined regardless of an asking price. This figure will never be known until an offer is made, in which case that selling agent will be notified by the bank whether or not the contract has been accepted or not. If the agent knows their stuff about short sales, they can request that price point in which case you can adjust the offer higher if the client desires.

The only problem with short sales, is that banks are slower than shit. 90% of the ones that I have closed have closed over a period of 6 months from initial contact. The problem arises when it comes time for the appraisal. 6 months of sitting in a depreciating market will almost always cause that property/house to not appraise. Also, getting a bank to realize this is like trying to tell a kid "having a tooth pulled doesn't hurt", they'll never listen to you. I've had more short sale deals fall through because of failed appraisals than anything else.

If you're lucky and have a savvy realtor and a somewhat sensible financial institution, the deal has a better chance of working. Just be ready to wait patiently, because rarely do these things ever have a chance to close in 1-2 months; and its all because of corporate protocols.
 

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Banks have a minimum. When the property doesn't sell, they review the minimum, and lower it.
Depends on the bank.... I've seen and dealt with banks that said they would let the deal fall through and foreclose on it. Everything depends on which bank your dealing with.
 

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Banks already have a bottom dollar figure predetermined regardless of an asking price. This figure will never be known until an offer is made, in which case that selling agent will be notified by the bank whether or not the contract has been accepted or not. If the agent knows their stuff about short sales, they can request that price point in which case you can adjust the offer higher if the client desires.

The only problem with short sales, is that banks are slower than shit. 90% of the ones that I have closed have closed over a period of 6 months from initial contact. The problem arises when it comes time for the appraisal. 6 months of sitting in a depreciating market will almost always cause that property/house to not appraise. Also, getting a bank to realize this is like trying to tell a kid "having a tooth pulled doesn't hurt", they'll never listen to you. I've had more short sale deals fall through because of failed appraisals than anything else.

If you're lucky and have a savvy realtor and a somewhat sensible financial institution, the deal has a better chance of working. Just be ready to wait patiently, because rarely do these things ever have a chance to close in 1-2 months; and its all because of corporate protocols.
Best post so far! You can't just keep throwing offers at the bank to see which one they will take, one offer might take 2 months to get an answer on. Best bet if you are looking to buy a short sale is to find one with that has a lender approved price, that is if you don't have time wait around.
 

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Supra nut
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whats unfortunate is if you have ANY collections items you won't qualify for ANY mortgage...

Some shit happened in my past and as a result I've got items in collections due to other people in my family.. Because of this I cant get a mortgage even though the house i was trying to get ... i was technically qualified for enough money to buy 3 of them..
Did you look into an FHA loan? I have some credit issues from medical bills incurred when some kids threw a rock through my Sup's window while I was driving. I got approved for an FHA loan and just had my offer on a foreclosed home accepted. Maybe you can find a broker who does FHA loans and see if that helps. (For those not familiar with FHA, it's a type of mortgage insurance; since they insure the loan on your behalf, it's easier to get approved if your credit isn't fantastic. You pay 1.5% of the loan amount but it's rolled into your monthly payments.)

Relevant to the thread, the house I'm buying was on the market as a short sale several months ago for $99k. As a foreclosure it was listed for $64.9k. There's a lot of money to be saved with a foreclosure vs. a short sale. Either way you go, good luck! :)
 

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Make sure when your dealing with Short Sales - that you ASK THE SELLING AGENT if the advertised price is an APPROVED SHORT SALE PRICE from the Bank and that they have Proof. If the home sales price has not been approved - the wait may take forever - several months and you can miss out on alot of other good deals as in Foreclosures or folks with real Equity in their home.

I am a Realtor and Short Sales in this market can be a great way to pick up a deal, but can be a major pain in the butt, cause Realtors market a home at a discounted rate HOPING the bank will approve. Later, and good luck!
 
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