The lengthy amount of time required to close short sales is frequently mentioned in posts and comments on this blog. At the risk of stating the obvious, much patience is required on the part of all involved parties. At the moment, I am involved with four short sales: two where I am the listing agent and two where I am representing the buyer. These current transactions, plus the ones I have previously closed, have accustomed me to the challenges and frustrations encountered by short sales. However, I must remind myself that my clients have no such familiarity with the ordeal.
The following piece was sent to me by one of the buyers I am representing in a short sale transaction. In it she describes her experience being part of a short sale transaction. And because she is a frequent reader of this blog, she felt like sharing with all of you.
The first part was sent to me two weeks ago. I received the update this afternoon.
Short Sale Experience….ongoing
My husband and I moved to Reno a little more than a year ago. After taking a quick look at the housing market, we soon found amazing lease/rental deals on very nice houses, and so we chose to lease for a year. We have watched the market over the past year and have read the comments on this blog on a regular basis. The postings seemed prescient to us and this turned out to be true. We decided to start officially house shopping in March when our lease went month-to-month. Since we felt like we could trust Guy to give us the straight story on local housing, we chose him as our realtor. What a strange ride this has been.
I think that my husband and I make a very decent salary between the two of us, but when we plugged in our price limit and search criteria to the fancy MLS tool that Guy uses, we came up with surprisingly few hits. We ended up looking at a lot of pricey disappointments. We decided that we were going to have to expand our search from our desired areas and look at the burbs. Although we love nice lots, unique houses and short commutes, we had to change our expectations for Reno home ownership. We finally found a nice house in a cul-de-sac with a decent-sized lot at a very manageable price and made an offer. It was a short-sale. “So what”, we thought. That was 7 weeks ago.
Our offer was instantly accepted by the owner and the MLS listing was changed to “Pending Sale”. We were excited about moving. We soon learned that the owner had approved several other offers that remained active as well as ours and then the status on the MLS changed several times to different variations of still available – I was too confused to accurately relay what happened there. The realtor for the owner was “very excited” about our offer and we were told that escrow had been opened and we would be closing in 3 weeks. Wow – great! But still no accepted offer from the bank (Countrywide) and therefore no money for escrow, based upon Guy’s clever offer-writing abilities. Several weeks passed with no real news and we had to extend our offer.
To shorten a long story, we didn’t close in 3 weeks. I don’t know what happened with the so-called escrow. Our weekly Tuesday updates are usually just the lack of a phone call or e-mail. Countrywide did get an appraisal done and the file was supposedly with a committee, but we are still just as close as we were 7 weeks ago. When we submitted a second offer extension with wording about our looking at other houses and making other offers, we were told that it would go into the file, but no one would countersign it. Our offer sits there with the others, that have been submitted many more months than ours, and the bank has gone through at least three different people overseeing this case file.
We continue to look at houses that come up with our criteria, we are seeing more and more short sales, notices of default, and the like. We made an offer on a NOD recently. That realtor says that she is taking our offer to the bank. Whatever. House shopping isn’t what it used to be.
Update – 2 weeks later:
We have spent the past nine weeks watching asking prices in the neighborhood of our shortsale dropping steadily while NOD’s and foreclosures multiply. So we started looking around at other areas of town again and just got more discouraged. We would spend the same amount of money on a lesser house anywhere else we go and who knows how low prices will go in any neighborhood as many areas still seem over-inflated. So we were just about ready to call it quits for house shopping for this year when what happens – the bank actually came back and accepted our offer. We are going for it and I can’t really give a good business reason for us to take this house – I certainly don’t know how low the market is going. As of right now the price per square foot on this house is more than reasonable and the house is great. I think that we were fortunate to ride the market down to where it is now by leasing and watching. But we all need a house that is our own now – especially the kids. We are still living out of boxes with storage lockers in two towns because we don’t have enough space and dare I mention the white carpet in a rental house with kids, pets and messy hobbies (ack).
So now we go on to the next tricky phase of this current housing market and that is the financing. On to escrow we go – for real this time it appears.