sir_eccles

While short sales are often in better condition than foreclosures, the "as-is" factor may still apply. Often, part of the short sale process is the seller proving to the bank that they have no money left to pay the difference in sale price and what is owed. So good luck trying to negotiate with the seller to fix xyz.

The thing that usually slows down short sales is second lien holders. They are usually owed much less than the primary mortgage but they have to agree to the sale price and the cut they get which is often pennies.

We were really lucky with ours, it closed in about a month. This was due to three previous short sale offers from other people falling through. The last one, they walked away just as the bank agreed the price. So when we stepped in the price was already set, the banks had agreed to it and basically said close in a month or it goes to foreclosure auction (actually it was the second lien holder (a HELOC) that suddenly said you've got a month, he was probably pissed he wasn't getting anything so this was him pouting). It was take it or leave it.

TimFountain

I bought a foreclosure just over a year ago.
In almost all respects it was like a normal purchase except closing was very short (10 days from offer to close), we were forced signed a form from the bank that said we would take it or leave it, no negotiation. However we got $5k in fixes out of the bank, all code violations that they would have had to disclose to any future buyer (leaking sewer in 2 places, dangerous gas and water leak from the hot water heater, water heater not strapped for earthquakes, split, leaking pipe etc.).

The house was in great condition, move in ready with all keys, manuals for appliances, original blue-print plans and new carpets. Bank held the note for $425K, previous owners had tried to sell it during the crash for $650k, apparently they lost ~$180K, it must have been tough on them. We got it for $380K. We weren't even looking for a foreclosure, it was just the right house at the right price in the right location. We used a regular Realtor (actually one appointed by the Relo company).

Have put over $40K into the house as it hadn't had any work in a long time. So far a new roof, new fence, new heating and A/C system, new faucets throughout, new blinds, new sinks, new microwave, new dishwasher, the list seems endless.

- Tim

GeoffM

You start off positive and then your final paragraph seems negative! Are you happy/satisfied overall?

All seems a bit of a gamble really!

TimFountain

Oh yes, I am satisfied. The process was relatively pain free, certainly no more painful than our last purchase, but we knew the house had needed some work and budgeted for that. I guess we are at about break even on the upgrades, but it's hard to tell in this day and age. At one point someone paid $650K for this house.... And as they say it is location, location, location. Attached is the view we wake up to when it is not too cloudy....

GeoffM

Wow, congratulations!

WEBlue

Did you get the bank to pay for fixing and/or fix the code violations before or after you signed the document that said you would take or leave it?

TimFountain

Yep, $4.8K in fixes. Since they were code or public health issues, they would have had to disclose or fix for any future buyer, so they just went ahead and paid for the work to be done. The biggest fix was the roots in the sewer line and the sewer leaking into the crawl space. They had to dig 8ft down in a 6ft diameter hole in the front yard to get to the broken section of pipe. It was a 3 day job. The water heater was a brand new, larger capacity (75G vs. 65G) that they installed. Finally they fixed the thermostat, is was commanding both heat and cooling at the same time.

BTW we were in a 3-way bidding war on the house and went in $5k over asking, so in effect we were only $200 over asking once the fixes were subtracted from our offer price.

Being a repo the house was vacant and as I mentioned upthread, the house was move-in ready. The last owners hadn't really looked after the place, but neither had they trashed it. It was just neglected. Oh and the roof leaked, and the windows and some of the pipework, and the sewer....

RICH

In my case, it was comical in the end. HUD owned the house and the sale contract stated "as is" etc; but also that it was eligible for FHA loan. When the Lead paint issue came up, I was stuck because HUD was not allowed to sell it with LBP, and not allowed to pay for the necessary repairs.

What happened was, my Realtor had a wife doing a Spanish class. They had an end of year dinner, with partners. One of her classmates' partner turned out to be a HUD bigwig, so my Realtor bent his ear, and that "lead" (sic) to it getting sorted.

The whole thing was a nightmare at the time as I was going through divorce & still living with the ex. But looking back, it is amusing

gad33

We've just moved into a short sale. It wasn't our intention to purchase a short sale but the price was substantially dropped between our realtor making the appointment to view and us viewing it. There was only one lender involved but the whole process took 5 months - we were told it would be 60 days so we spent 2 months on the road relying on the kindness of friends.

As TimFountain mentioned in his place we're dealing with neglect so there are numerous little things that we have to get done. Also the previous owners removed as much as they could get away with.

Yes we got a bargain but then you have the time and money involved in fixing things, which we were prepared for so not a problem.

(Now if I could only find someone who could tell me what every single plant/tree is in the garden - I don't recognise any of them!)