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Buying a house via short sale

ColbyLang
ColbyLang Posts: 4,422
in Off Topic
Anyone ever do this? Anything you would do differently? 

Owner paid 665 in 2019. House is about to go up for short sale. Comps should put value of the home around 800k. Unsure as to why owner would do this instead of just selling it outright. Only thing I can come up with is took out a HELOC and lost and can’t afford either payment. Doing this to delay but not avoid bankruptcy. 

Size wise it’s a lateral move. Same beds and baths. Upside is many many many families of my kids school in the neighborhood (unlike now) downside is no badass 1000sq foot covered living space. 

Would have to get it for a steal (thinking 500ish) Needs exterior cosmetic love, interior refresh and all bathrooms renovated. Have to leave us enough money to do all of the above plus a patio and pool. 


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Comments

  • JohnInCarolina
    JohnInCarolina Posts: 34,847
    Good luck man.  Never done this nor do I know anyone who has.  Ultimately with any major purchase it’s always good to remember that there’s no such thing as a free lunch.  
    "I've made a note never to piss you two off." - Stike

    "The truth is, these are not very bright guys, and things got out of hand." - Deep Throat
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  • DoubleEgger
    DoubleEgger Posts: 19,216
    I would suspect that all of the maintenance of the house has been lacking for a while. I would budget for a fair amount of unforeseen issues. 
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  • ColbyLang
    ColbyLang Posts: 4,422
    DoubleEgger said:
    I would suspect that all of the maintenance of the house has been lacking for a while. I would budget for a fair amount of unforeseen issues. 
    Roof definitely needs replacing, we have yet to see the inside. My concern lies in water heaters and AC’s. House built in 2010. They’re both at the end of their useful lives.
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  • ColbyLang
    ColbyLang Posts: 4,422
    JohnInCarolina said:
    Good luck man.  Never done this nor do I know anyone who has.  Ultimately with any major purchase it’s always good to remember that there’s no such thing as a free lunch.  

    Thx, a lot has to fall into place for this to happen. I won’t be house poor. I flat out refuse to be. I also won’t “overbuild” for the area to price myself outta the market just to live there. We can build exactly what we want for sub $1,000,000. Problem is finding a lot/land. 

    I’m fine where I’m currently at with a 2% loan that’ll be paid off inside of 10 years. We lucked out and paid $61 a sq foot in 2010. Complete gut and remodel. Comps have us nearing $200 a sq foot as of last week. 
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  • DoubleEgger
    DoubleEgger Posts: 19,216
    ColbyLang said:
    DoubleEgger said:
    I would suspect that all of the maintenance of the house has been lacking for a while. I would budget for a fair amount of unforeseen issues. 
    Roof definitely needs replacing, we have yet to see the inside. My concern lies in water heaters and AC’s. House built in 2010. They’re both at the end of their useful lives.
    Mold would be my biggest concern. 
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  • U_tarded
    U_tarded Posts: 2,083
    Bought my first house short sale in 2010, doubled value sold in 2014 for a foreclosure.  It’s a slow process, the bank approving the short sale seem to go slow, we had to get like 2 45 day extensions on the short sale.  Same with a foreclosure but once accepted offer it was smooth up to closing,  it’s totally worth it especially if you are good with some sweat equity.  It’s a great way to build quick equity if you can do it.
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  • ColbyLang
    ColbyLang Posts: 4,422
    U_tarded said:
    Bought my first house short sale in 2010, doubled value sold in 2014 for a foreclosure.  It’s a slow process, the bank approving the short sale seem to go slow, we had to get like 2 45 day extensions on the short sale.  Same with a foreclosure but once accepted offer it was smooth up to closing,  it’s totally worth it especially if you are good with some sweat equity.  It’s a great way to build quick equity if you can do it.
    Thanks for the reply. Out of curiosity, how much lower did you offer than the bank’s asking price/seller’s obligation to the lender?
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  • fishlessman
    fishlessman Posts: 34,663
    ColbyLang said:
    U_tarded said:
    Bought my first house short sale in 2010, doubled value sold in 2014 for a foreclosure.  It’s a slow process, the bank approving the short sale seem to go slow, we had to get like 2 45 day extensions on the short sale.  Same with a foreclosure but once accepted offer it was smooth up to closing,  it’s totally worth it especially if you are good with some sweat equity.  It’s a great way to build quick equity if you can do it.
    Thanks for the reply. Out of curiosity, how much lower did you offer than the bank’s asking price/seller’s obligation to the lender?

    one in my area was offered at 450k, went less than 200k. the new owner knocked it down and put up a new unfinished house (upstair bedrooms and third floor attic unfinished and back up forsale) sold it within a year for 850k.  short sales are kinda funny,  i suspect the bank sometimes steers the sale towards friends and families at a good discount
    fukahwee maine

    you can lead a fish to water but you can not make him drink it
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  • ColbyLang
    ColbyLang Posts: 4,422
    Spoke with realtor who is listing it at length yesterday. He’s awaiting owner to sign waiver for his company to speak with lender. Said the owner is in flat out denial. I made an offer to purchase prior to short sale proceedings. Realtor said  could probably get it for about 10-15% less than that if I waited. Was advised to have my financing in order. So, we’re getting that done 
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  • Canugghead
    Canugghead Posts: 13,799
    Envious of how much more affordable housing is down south.

    canuckland
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  • JohnInCarolina
    JohnInCarolina Posts: 34,847
    Canugghead said:
    Envious of how much more affordable housing is down south.

    And they’re plenty expensive here.  I don’t know how y’all are managing with that.  Those increases are nuts.
    "I've made a note never to piss you two off." - Stike

    "The truth is, these are not very bright guys, and things got out of hand." - Deep Throat
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  • fishlessman
    fishlessman Posts: 34,663
    Canugghead said:
    Envious of how much more affordable housing is down south.


    canadians have been buying maine waterfronts and that chart seems to explain the current insane prices on those.......
    fukahwee maine

    you can lead a fish to water but you can not make him drink it
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  • ColbyLang
    ColbyLang Posts: 4,422
    A quick update. House now set for sheriffs auction 10-1. Foreclosure seems likely. My realtor has a month to convince the owner (but non payer) to go the short sale route. 
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  • kl8ton
    kl8ton Posts: 6,434
    ColbyLang said:
    A quick update. House now set for sheriffs auction 10-1. Foreclosure seems likely. My realtor has a month to convince the owner (but non payer) to go the short sale route. 
    Anything on this?  I rarely come to the off topic section but I am intrigued by this.
    Large, Medium, MiniMax, 36" Blackstone
    Grand Rapids MI
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  • ColbyLang
    ColbyLang Posts: 4,422
    Update as such. My realtor convinced homeowner to let us view the property 14 days prior to auction (I paid the guy $150). 

    Upon walking up to the front door I knew we were walking away. All of the stucco on the front facade was cracked with visible rusty screws pushing through. Indicative of water intrusion.

    floor plan was perfect. Every bathroom first and second floor had mold on the ceilings. And not “some mold”. Entire ceilings. Guest bedroom upstairs had tarps on the floor to catch the water leaks lol. At least half of the back of the house was missing shingles. 

    It would have been cheaper to build a new house rather than renovate this one to stay within the neighborhood’s market. 
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  • ColbyLang
    ColbyLang Posts: 4,422
    As a follow up, the owner had a last second Hail Mary come thru. His father illegally mortgaged the house after the passing of his mother (legally separated, sons had ownership, father got to live there) in 2010. Not his debt, nor the mother’s estate. Owner and his brother legally disinherited by the father lol. It’s like a bad soap opera. 
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  • Foghorn
    Foghorn Posts: 10,228
    Wow.

    XXL BGE, Karebecue, Klose BYC, Chargiller Akorn Kamado, Weber Smokey Mountain, Grand Turbo gasser, Weber Smoky Joe, and the wheelbarrow that my grandfather used to cook steaks from his cattle

    San Antonio, TX

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  • Botch
    Botch Posts: 17,397
    Sounds like you dodged a bad bullet.  

    "Dumplings are just noodles that have already eaten"   - Jon Kung

    Ogden, UT, USA


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