I'm making an offer on a short sale house.

[Rick Lee]

Wife and I found a house we love about four miles from where we live now. Sellers bought the place in 2005 for $480k, put 20% down and it's listed as a short sale for.......$240k. It's gorgeous, in perfect condition, owners are expert decorators and very neat and orderly. Most important, of course, is the three car garage with built-in workbench and cabinets. It's in a gated community, which I don't care for, but that would cut down on the Mormons, teenagers and landscapers always knocking on my door, as I work from home.

I figure the sellers owe at least $375k on this place and that's IF they didn't rack up a HELOC. The bank has to be figuring on paying 6% to the realtors and probablt 6% seller help, as allowed by FHA. We're offering $220k and asking for closing costs covered by seller. This should be interesting.

Houses in the good areas in Phoenix are moving. The stuff we all hear about in the news tends to be mass prod. homes in the far outlying areas that got started when the tide was already turning.

[Danimal16]

Good luck Rick.

[Noah930]

Best of luck, Rick.

I took a look at a short sale last month. The house was being offered for $775K. It had been discounted from $895, IIRC. The home was last purchased in 1997 for $380. Apparently the family is getting divorced so they must sell now.

They owe...$1,050,000!!

[Rick Lee]

That's amazing. I can't remember what the jumbo limit was in 1997, but that house was probably bought with a conforming loan. And now over $1 million is owed on it. Wow.

[Gogar]

Originally Posted by Noah930

They owe...$1,050,000!!

WOW! Yay, America.

Good Luck, Rick.

[lendaddy]

These threads give me an odd urge to hand you guys a towel or go pick up your bats.

[the]

Originally Posted by Rick Lee

Houses in the good areas in Phoenix are moving. The stuff we all hear about in the news tends to be mass prod. homes in the far outlying areas that got started when the tide was already turning.

At 55-60% off, the houses like the one you are looking at are the houses in Phx we all hear about in the news.

It's a total disaster for the seller and the bank. (But good for you!)

[the]

Originally Posted by Noah930

Best of luck, Rick.

I took a look at a short sale last month. The house was being offered for $775K. It had been discounted from $895, IIRC. The home was last purchased in 1997 for $380. Apparently the family is getting divorced so they must sell now.

They owe...$1,050,000!!

If you look through the various housing bubble blogs, you can find extreme examples of HELOC abuse that are so bad, they are comical. Stuff in Beverly Hills, etc. where the homeowner was able to literally HELOC out the house for MILLIONS (multiple million) more than the house is now worth. One house and a multimillion loss for the bank.

[vash]

good luck rick! remember when the sell, they take their stuff. when you move, all you have is your own stuff.

i have zero decorating skills..i will farm that out when i get the cash.

[Rick Lee]

I get the feeling these sellers have another house somewhere and will land on their feet. But just in case they don't feel like moving all their stuff, I will offer them some money outside of closing to leave behind what they don't want to move. We have enough furniture to live there comfortably. But making the house look ready for a photo shoot like it is now will take a while. There are sooooo many garage and yard sales around here every weekend. I'm sure we'll be able to find good stuff at good prices. Obviously, a fooseball table and kegerator are top priority. Scratch that. I have to have the garage floor epoxied before we even move in.

[Rick Lee]

Originally Posted by the

At 55-60% off, the houses like the one you are looking at are the houses in Phx we all hear about in the news.

It's a total disaster for the seller and the bank. (But good for you!)

What I meant was this is not an abandoned or abused house. It is still very lovingly cared for. We've looked at a few of the foreclosures and they were HORRIBLE. One sad case we saw Sunday had a two garages. One was a two car door, but had one space deep enough for at least a car and a boat and then another tandem garage. House was built in 2007 and the neighborhood was great, looked right out on the desert at sunset, so nice. House looked like squatters had already taken it over.

[911Rob]

Amazing. Good luck buddy.

[DRACO A5OG]

Sorry to rain on your parade, I don't mean to intrude on your offer, however:

Be very cautious about outside of escrow dealings. That is considered Bank Fraud. The law dictates the seller must receive ZERO in a short sale transaction, not even free rent to allow them to find a place and move out, unless the lender agrees. You do not want the FBI to come knocking on your door after you move in.

Did they do a BPO (Broker Price Opinion, an appraisal by an Real Estate agent)? That will determine if your offer will fly. Lenders are reluctant to do anything these days because you and rest of us are bailing them out. Be ready to wait a long time. When Short Sales started, I completed a deal in 10 days. 2 years ago one of my escrows took 10 months. An agent that came to one of my short sale listings told me it took her 2 years for a deal.

Granted, it is on a case by case basis but be ready to be patient. Banks represent Individual Investors, a few of them are willing to deal but most are RETARDED and think the longer they wait they will get some bail out money.

The most retarded thing is if they take it back, they will most likely put it on the market lower than what they demanded from you. Bastards!

[ckissick]

Originally Posted by Noah930

Best of luck, Rick.

I took a look at a short sale last month. The house was being offered for $775K. It had been discounted from $895, IIRC. The home was last purchased in 1997 for $380. Apparently the family is getting divorced so they must sell now.

They owe...$1,050,000!!

They owe almost $700K than they originally paid for it? Gee, I wonder why they're getting divorced?

[the]

Oh. Yeah, I'm sure there will be tons of short sale/foreclosure houses in Phx that are in nice shape and in nice areas, now and in the coming years.

I have seen some of the stories about the "ghost town" neighbors you are talking about, though. There was one, it showed a picture of the drained/abandoned common area pool, covered with graffiti, etc. Seems like the neighborhood was half developed before the crash, then the developer ran out of money and took off, leaving it in various states of incompletion, which was a bummer for the few that had actually already moved in.

[Rick Lee]

Yes, I saw a drained pool or two in the last week, looking at vacant houses. No graffitti or vandalism though.

When I bought my last house, I asked the seller before closing if he wanted to sell anything and leave it behind. He said he'd leave the 52" tv for $800, which was not a bad deal in 2004. I paid him before closing and he also left me a kitchen table for free, which I still have and fits perfect in our current place. Not gonna kill me if the sellers can't sell me anything. Just seems kinda silly for them to list it on Craigslist or to have a garage sale, when we could both save ourselves the hassle and just do a deal for whatever they're willing to part with. As this is in a gated community pretty far from any bad areas of town, I doubt houses in this area will get vandalized if abandoned. The house nextdoor to me now has been vacant for almost a year and has not been touched. The yard looks kinda bad and the STUPID vendors and proselytizers still leave stuff in front of the front door. But it's not that bad.

[Rick Lee]

Also, we're in no hurry for the deal to close. It would be nice to be done in June, but we're not gonna stop looking at houses until this one looks like it's imminent to close.

[speeder]

Pretty hard to go wrong for $220k if it's somewhere you want to live and it's a decent house. Wishing you good luck!

[fintstone]

Similar short sales in my old neighborhood in Las Vegas...but something is odd. In my subdivision, houses were worth in the low $700K range when the market started dropping. Everyone kept their homes even though they were about 50% underwater. Only one has been for sale and recently was a short sale for $400K (none have been actually listed as "for sale")...but last week I noticed on Zillow (and doublechecked tax records to be sure) that one had sold in March for $330K. No sale sign or listing. Tax records show the new owner as an irrevocable trust (differnt name than previous owners)...but the same family (owners) still live there. Is this some sort of deal where they short sell to a anonymous relative and actually keep the house for half of what they owe?

[the]

maybe someone bought it as an investment, and is renting it back to the (former) owners.