Real Estate Randomness - anyone dealt with a short sale or is a RE Agent?

doubleSS07

Hey Ladies

Has anyone done a short sale on a home or is a Real estate Agent with some knowledge on the subject?  BF owns his home and is underwater with the value of the house.  We are seriously considering relocating to another state but can't really be flexible enough to do anything with the house hanging over us.  I have no stake in the property, he bought it about 2 years before we started dating. 

I know that you have to have a hardship to get the bank to agree and if I didn't give him money every month and he didn't have a small savings he'd be in the red.  He was fine when he bought the place but since then had a job change and his income went down, not dramatically but enough to have to pull a bit from savings every month.  He's afraid of foreclosure if the bank doesn't agree to a short sale.  Anyone with any insight?  I looked over at the nest but they really only had some articles on buying a short sell not selling your home.

cu97tiger

I short sold my home in FL in 2009. It was a 14-month process with multiple offers that 'fell-through' at the last minute. It's a frustrating and stressful process. I'm not really sure what else I can tell you, other than to make sure your BF gets a realtor that is familiar with short sales (my first one wasn't... total PITA). 

doubleSS07

Tiger- that's exactly why we are looking to start the process NOW!  I hear it can sometimes take forever with the lender and then either the deal falls through or the buys are tired of waiting and walk.  We just don't want to be dealing with 2 years down the road because we hmmed and hawed and waited.

motoLyn

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/special-topic-wedding-boards_not-engaged-yet_real-estate-randomness-anyone-dealt-short-sale-re-agent?plckFindPostKey=Cat:Special%20Topic%20Wedding%20BoardsForum:136Discussion:bbd16aac-b50c-43ee-bb6f-b15535835adfPost:1ea2c8a9-2c86-4f1c-9c5a-8741bfb6c22e">Re: Real Estate Randomness - anyone dealt with a short sale or is a RE Agent?</a>:
[QUOTE]I short sold my home in FL in 2009. It was a 14-month process with multiple offers that 'fell-through' at the last minute. It's a frustrating and stressful process. I'm not really sure what else I can tell you, other than to make sure your BF gets a realtor that is familiar with short sales (my first one wasn't... total PITA). 
Posted by cu97tiger[/QUOTE]

I have to agree with tiger on that.  I was on the other end though looking at buying a house that was a short sale.  It was a pain to even get the process going and having to go through all the hoops with the bank that held the title to the house.  In the end FI and I ended up with a normal sale.  Short sales are for those with the time to wait it out and the start up money ready to go.  Like those who have the capital to buy the house outright almost.  Good luck to your BF!

doubleSS07

Thanks Moto!  We have had quite a few home in our area sell to investors for rentals.  We've done updating so we are hoping maybe a cash cow would come along and snap it up as a good rental property. 

flygirlmeg

BF actually bought our house as a short sale.  I couldn't buy it with him because I already own a house (where we don't live) and neither one of us wanted to buy a house together without being married.  The entire process took just over 9 months which I hear is on the short side.  It was an emotional roller coaster.  First, the owner approved, then the FIRST bank approved, then, months after, the second bank denied our offer.  That was a hard one because I was deployed overseas and got the news at 1am.  That was a rough day!  The owner owed amount A, our offer was 100k less and would have been an amazing deal for us.  That first time the bank countered with 65K more than our offer.  We let it sit and after another month or two of looking, put in a what-the-heck-offer of 20k more than our original offer.  The bank finally accepted that - thank goodness!!  In the long run we got the house we really wanted at a good price.  We were also in the unique position of not having to move on any particular schedule so we really had all the time in the world.  I guess long story short is that it is possible, just takes time and the right buyer who can afford to wait out the process.  Also, an agent who's done multiple short sales and with contacts at loan-holding banks!!  That'd be a big help as well.  Good luck!

AudgiePodge

I had a completely opposite experience.  The first home I bought was a short sale.  From the time we put in the offer for the house, to when we signed for and received the keys, took just a little over 3 weeks.  We offered what the house was listed for and it was accepted.

On the other side of it, if it is sold, the negative equity that is forgiven is sort of counted as income and you will have to pay taxes on that amount.

doubleSS07

Audgie we are definitely worried about the tax repercussions. We are talking to a real estate agent who primarily deals with short sales and foreclosures, hopefully he will be able to negotiate that away. I believe CA is a non recovery state but I am clueless on the subject...

RWS2011

My dear friend has had to live in nowhereville, Alaska, rather than being here with most of his friends and some family because he had a good job opportunity that just barely kept him afloat after paying on his mortgage AND collecting rent from tenants.  So, he is about to close on the house, today or tomorrow.  He started the Short Sale process this summer (early in the summer).  The interested buyer has been involved for at least 3 months, but so far, other than a slower than average sale process things have gone relatively smoothly.  If your BF decides to go this route, I think it just takes patience and an understanding of the impact on his credit rating (not as bad as foreclosure, but still not great.)  Good luck!