First Time Home Buyer- Short Sale Advice?

Couple of things to keep in mind-

When you're buying the house 'As-Is' (foreclosure/short sale), make sure to have in writing exactly what that means. When I first looked at my current house (and later when inspecting), one of the bedroom doors had been taken off the hinges to allow for a large drafting table to get in to the room (it was previously the land developer's sales office). The door was still there, but stashed inside another bedroom's closet. After closing, I realized the door was missing and had been taken by the selling realtor's prep crew. I contacted him about it and he basically told me to pound sand.

As the door was not technically installed when I made my offer or inspection, I didn't really have much of a leg to stand on even though any numbnuts would expect it to be part of the house. In the end, I bought a new door and hung it myself which was a time/labor hassle that I wouldn't have had to deal with if I had made that clear up front. Live and learn I suppose. It wasn't all bad though, because the realtor's crew missed one of his nice painted metal signs in the yard which probably cost him about four times as much as my new door, so I kept it out of spite. I took it apart and use it for my garage dustpan now.

Something else you mentioned was how this is a relatively small house with no garage. There are two things I've always been told to buy larger than I think I might need, and that's houses and safes. It takes no time at all to outgrow either one if you go too small in the first place. Just something to keep in mind. In a 'normal' market, considering something a starter home is reasonable, but in today's housing situation, being able to sell later on for what you owe on it at the time isn't nearly so guaranteed. Just ask the current owner of the house you're looking at.

Also in this situation, I would highly recommend getting a home warranty for at least the first year. This may cost a few hundred bucks, but can save you a hell of a lot more if a big-ticket item goes south after you're in the house. A year gives you all four seasons and plenty of time to make sure it's all good.

Good luck with the purchase!

 

Tax assessments are worthless for gauging the appraised value (no lender will consider it). They're only calculated one time per year and a lot can happen in that year in this market.

My wife's condo's last tax assessment stated it was worth $275K. Two different appraisers recently said it was worth $225K when we tried to refinance it. We sold it and we're in escrow for $245K.

As for short sales, as has already been stated, they can take a long time, especially if you're financing it or there are a lot of them in your area. Some out here have sat for 1 year or more. A friend of mine's short sale took two years. The problem is that because the property is underwater, the lender takes their time hoping they'll get a better offer. Cash is king with short sales.

The good news for buyers is that short sales also affect the value of traditional home appraisals (which is why our refinance attempts produced such low estimates).

 

Just beware of the warranty you get. My house came with a 1 year warranty since it was through Caldwell Real Estate Transfer (the people worked for Merck and got transferred to PA). The few issues I had, each time they found a way to skirt the issue and deny coverage. And sure enough, the contract had a clause for each of the items that went. Then they had the nerve to call and ask me to renew it. That was American Home Shield.