If things had never gone off the rails with the first house we tried to buy, we would be closing in eighteen days.
Unfortunately, that was not to be.
We looked at four houses the week it all fell apart, found two we liked and picked one over the other. By the time we were clear to write an offer on it, it already had an offer on it. So we decided to try the other house we liked.
The main reason we didn’t pick that house in the first place was because it had some water damage around a window from an ice dam on the roof. We decided as long as that was properly fixed at the seller’s expense, there wasn’t really any other fault with the house. As it turned out, the sellers were already in the process of getting the water damage fixed. So we decided to go for it and write an offer on the house.
This offer is slightly different in that it is a short sale. Which means that the current owners are in danger of going into foreclosure and the bank holding the mortgage is willing to sell the house at a loss instead of letting it all go into foreclosure. It’s not an ideal situation by any means, but it’s slightly better than losing it all to the bank.
Here’s the problem with buying a short sale. The selling bank can take MONTHS to come to a final decision on the actual sale of the house. Meaning it can take MONTHS to actually close on the house. Meaning if you’re running on a deadline of when you need to move…you’re kind of screwed if you need to close by an absolute date.
That’s US.
So we’re kind of stupid to try to buy a short sale, aren’t we?
There’s no way we’re going to close on this house by the time we have to move out of our current place.
Here’s why we’re doing it anyway…
This situation is different. A bit unusual, one even our seasoned real estate agent wasn’t entirely familiar with. Because we’re guaranteed not to close by the time we have to move, the sellers will let us move into the house and rent it for the cost of the monthly association fee and utilities until we actually close on the property. It’s currently sitting vacant as the owners have already moved out of state.
It sounds too good to be true, actually. And part of me worries we’re getting into something that’s going to screw us in the end, but there’s substantial risk in any real estate transaction. So we’re doing it.
This is not a common occurrence—being able to rent until you close—so if you are strapped for time, you more than likely DO NOT want to get involved with a short sale. We’d been pretty much avoiding all short sale properties until this one came along because of the time frame we’ve been working with.
Before we even wrote the purchase agreement, our agent looked into the association to see what their delinquency was like. If it was sketchy, we weren’t even going to bother. In the whole development they had one person not paying. Not even 1%, just one person. Much better than the 29% of the last place.
Right now we need to review the association documents (the legal jargon is MELTING MY BRAIN OH YE GODS) to make sure there aren’t any weird rules we can’t live with (highly unlikely) and sign a rental agreement—which is just another addendum to the purchase agreement. (Also very straight to the point, unlike a standard lease agreement.) Then we get our move in date lined up (we can pretty much pick whenever we want to take possession of the property) and we’re good to go until the bank gets their shit together to let us close on the property.
We could live with cheap rent for one month, a couple months, several months, or even a year or more. Banks, apparently, are never in any rush to actually deal with their short sales. Which is stupid. Because you would think they’d want to just get it off their books and be done with it. I know there is a lot more that goes into the process on the bank end of things, but when dealing with the bigger banks (and this time, we are dealing with one of the biggest) despite having an entire department dedicated to dealing with just short sales and foreclosures, none of it is a priority for them to get done.
We don’t have to have an inspection or an appraisal done until we have an actual closing date lined up. So we won’t have to plunk down that money right way…again.
This time we are cautiously optimistic. Though Bob and I are both waiting for something else to throw a wrench in the works.
We shall see.
I might be holding my breath just a little bit.
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