First Time Home Buyer- Short Sale Advice?

Hey Everyone

I'm in the market for my first house. With the economy I feel like I would be dumb to not pick up a home before the prices go up again.

I found a house I like, in the area I want to be. It is a short sale listed at $179,000. Apparently there is no guarantee of what the bank is looking to get, So I could potentially even offer 179 and have them say no.

One of my friend's Mom's is a commercial realtor and she suggested offering 25% less than what they are asking, because that is the margin of how far the bank is willing to go (typically).

I am new to all of this, so I was wondering if anyone has any advice for:

-First time home buyers

-Short sale home buyers

-Anything else related to this.



Thanks! I know there are a lot of really smart people on here so hopefully some of them chime in with their experiences and knowledge.

-Josh


Update: here's some more info that may be important to list up here.

-I was pre approved for $250k but realistically won't be able to afford more than $200k

-The house does have the current owner living in it, and she has been taking good care of it, but she owes more than the house is worth so she wants out.

-The house, as listed on zillow.com, has a tax assessment of $238k which breaks down to $175k for land and $63k for house

-It has 2 beds, 1 bath, small eat in kitchen, nice size living room, slab foundation (no basement), 50'x110' property, no room for garage but it has a nice shed, nice deck/patio, very private/wooded property.

-I think it will be a good starter home for myself and eventually my girlfriend. I like that it is small so it will be reasonably affordable to furnish and to heat/cool. I also like that it has a pretty small yard so I won't have to waste a lot of time taking care of it.

 

The Offer suggested is good but be ready to wait a long time for a response unless you get lucky. My friend put a bid in and its been 7 months with no response yet and if Im correct you cant put a bid on another house while you're waiting for the response. My wife works for a bank and might be able to get more info if you want.

Luca

 

What I learned from buying my pad a couple years ago...

Even though it is listed at $179k, depending on how much it appraises for will determine how much the bank will sell it for. If it appraises for $150k (meaning it is worth $150k), the bank will not sell it at more than $150k as they will not risk giving a loan for more than the property is worth.

It also matters on the bidding war that will take place. Highest bid gets the shot at buying.

One piece of advice, get not only pre-qualified, but get pre-approved and be ready to throw your down payment before you start looking at places. I was out bid on my current house, but because I was ready to buy, I won the bid.

I would not follow your friend's mom's advice and offer too low, you will loose your chance. Offer close to your highest and best offer.

Also, do not get into the thinking that since the bank will give you X amount for a loan, you should get as big a house as you can and pay that X amount. That is what got the banking industry in trouble, giving loans that they and the people getting them thought they could afford. You need to know on your own how much you can truly afford. For me, I was approved to take on a loan for $500k, but I knew damn well I could not afford that. Not even close to that.

Anyway GL. It is very stressfull acquiring a mortgage, but I commend you on doing it early in your life.

 

Yes, above info is accurate, get an appraisal find out value, then pt in bid. Short sales can take months, up to 6-7 months to go through if not longer sometimes. Also, house is sold, as is, so can also have problems. How Long has it sat with no one living in it? These can all contribute to long term problems. Zillow or trulua the property to get an estimate of home values for that house and neighboring comparables. I can help u more, just let me know. I can also give you ideas of what repairs would cost, roof, windows etc.

 

Short sales are a great deal but usually are a long process. Like Luca said get pre approved before you get set one house it will also help you figure out your budget. Now would be a good time to buy.

 

I have 3 foreclosed on houses in my neiborhood, they have been sitting about 3+ years and some of the local shit bag scrapers have robbed them of all the copper.

 

Good luck & be patient as others have stated it takes 6-8 months if not longer, get a good inspector and if you decide to go through with it make sure you try and look at the house frequently to make sure stuff doesn't go missing while you wait.

Good luck though the process is stressful but the reward is worth it ,

took 7 months for mine

 

Thanks for all the responses guys!

Here's some more info for what you guys mentioned:

-I was pre approved for $250k but realistically won't be able to afford more than $200k

-The house does have the current owner living in it, and she has been taking good care of it, but she owes more than the house is worth so she wants out.

-The house, as listed on zillow.com, has a tax assessment of $238k which breaks down to $175k for land and $63k for house

 

What. Year was that assessed? Should say tax year. How does that compare with comparable neighbors.

 

One piece of advice is that you should not fully trust anyone but yourself. Get informed and don't do anything that YOU don't want to do.

 

Yeah, but rupp, buying ur first house means nothing feels comfortable and or normal and is out of the comfort zone.

 

last year's tax assessment. everything else in town is either a lot more money, or a complete shit hole... AND more money. My realtor and I have looked at 8 other homes in town and I really don't even like any of them. I'm trying to not get my hopes up and fall in love with this one, but it seems perfect for right now.

your words are wise in MANY ways

 

well i don't make polls asking people to help me decide which tires, lift, bumpers, gas station, scent of air freshener to choose like you do

But yea.. even though I'm great at diving into huge commitments and wasting tons of money, this is a nervous experience

 

As with anything, you should be as much of an expert as you can be. And gut feelings go a long way.

 

i agree with those statements as well

 

Good luck Josh it will be the best investment you ever make.

 

Like many things, it also get's easier the more you do it...

 

Thanks!

 

Hey Josh, just a few things off the top of my head:
- Go through everything yourself. Even if you don't know what you're looking at, a good visual inspection will tell a lot.
- Use Google Earth to look at the area around it. Make sure there's no power lines, etc around.
- Check to make sure you don't need flood insurance. That can run up to and over $150 per month.
- Look into the school system (if it's not your hometown). Even if you don't plan on sending kids to the school, it will mean a lot when you go to sell it.
- Take a look at all the major items (heat / ac / roof / etc to see how old they are. These items can run big costs short term.
- If you don't go short sale, make sure to get a home inspection before your closing and use anything the inspector finds to negotiate credits for you.
- Request permits for any major recent work. I got burned on this once with my condo I had in Brick. I didn't ask about permits for some stuff and when I went to sell the place, the buyer requested them. I ended up having to file for permits and have final inspections done.

If you need a mortgage person, let me know. I have a good guy that I used last year to re-finance the house. I have a 30 year fixed rate at 4.0%.

Feel free to call or text me if I can be of any help.

 

Thanks mike!