In the market to buy a house *possibly a short sale* what to expect?

[dmoney1980]

Kids- the wife and I are tired of our 700 sq ft apartment in the city. We've been renting in Chicago for the past 4 years and it's time to buy a house! No kids at the moment, but we do plan to have 1 or 2 in the near future.

I used to be a loan officer so I kind of know what to expect on the mortgage side, but I'm really curious to hear some feedback on your short sale / foreclosure buying experience.

What I know:
*Short sales take a long time! You wait 2-4 months just to get a respone on your offer.
*Foreclosures are faster, but you may get into a bidding war.
*SS and Foreclosures are sold "as-is", meaning if the roof needs repair you can't negotiate the cost of the roof from the sales price.


Things I'm not sure about:
*Property taxes. Do you have them escrowed (added) to your mortgage payment, or do you pay that yourself? I'm leaning towards us paying it on our own.
*Regarding the home inspection: were you there for the inspection?

 

[SillyOReilly]

Kids- the wife and I are tired of our 700 sq ft apartment in the city. We've been renting in Chicago for the past 4 years and it's time to buy a house! No kids at the moment, but we do plan to have 1 or 2 in the near future.

I used to be a loan officer so I kind of know what to expect on the mortgage side, but I'm really curious to hear some feedback on your short sale / foreclosure buying experience.

What I know:
*Short sales take a long time! You wait 2-4 months just to get a respone on your offer.
*Foreclosures are faster, but you may get into a bidding war.
*SS and Foreclosures are sold "as-is", meaning if the roof needs repair you can't negotiate the cost of the roof from the sales price.


Things I'm not sure about:
*Property taxes. Do you have them escrowed (added) to your mortgage payment, or do you pay that yourself? I'm leaning towards us paying it on our own.
*Regarding the home inspection: were you there for the inspection?

:whiste:

 

[Capt Caveman]

:whiste:

He used to be a loan officer too. Scary.

 

[SillyOReilly]

He used to be a loan officer too. Scary.

Loan officers are who gave everyone money to buy houses they can't afford, and were a huge part of the whole housing inflation and subsequent crash.

 

[DesiPower]

He was a loan officer, not necessarily mortgage loans...

Escrow is a personal choice, if you are a good, disciplined person when it comes to personal finances then you can skip Escrow. However, best APRs, imho, come with Escrow included, they insist on it.

For inspection, you dont have to be, someone needs to be, it can be realtor, but it can be helpful being around, they can give you tips...

 

[MikeyIs4Dcats]

from friend's experiences, short sales can actually take anywhere from 2 months to a year. Banks are taking their sweet time.

We've always met with the home inspector after he was complete and he walks through any issue with us. Find a certified inspector....too many people out there doing inspections that have no qualifications. Even one of our certified inspector missed some things I knew to be wrong.

Lastly, a home inspection is to catch MAJOR issues. They will tell you in the fine print they aren't there to catch anything under $1,000.

 

[dmoney1980]

He used to be a loan officer too. Scary.

Well, things were different back then. The company I worked for didn't offer that option, so whats wrong with me asking for someone's opinion based on their experience?

Regarding the inspection - I know that appraisers prefer to go solo (or with a realtor), and that inspectors typically have the potential buyer tag along.

I find it funny that people blame the banks for giving out th loans, and never the homeowner that needed to do a cash out refinance every 6 months. Or people who decided to roll their car and credit debt into a 30 yr mortgage. I'm not saying it's all on Joe plumber, or that the banks /lenders were innocent. I think everyone's greed was to blame for all this.

 

[Alienwho]

I bought my house last year, a short sale, and it was so smooth and easy and took less than 6 weeks. My realtor specialized in short sales and knew exactly what she was doing and had the right connections to get it done quick and easy. I must have been an anomaly though because I've heard nothing but how hard short sales are although it seemed like business as usual for my realtor.

 

[boomhower]

Finding a realtor who specializes in SS's will make your life a lot easier. I like escrow, it's just more convenient to me. Try to find some references for the inspector and make sure they are certified. A good inspector can save you a ton of money down the road.

 

[Capt Caveman]

from friend's experiences, short sales can actually take anywhere from 2 months to a year. Banks are taking their sweet time.

We've always met with the home inspector after he was complete and he walks through any issue with us. Find a certified inspector....too many people out there doing inspections that have no qualifications. Even one of our certified inspector missed some things I knew to be wrong.

Lastly, a home inspection is to catch MAJOR issues. They will tell you in the fine print they aren't there to catch anything under $1,000.

Having been thru about a half-dozen home inspections, I never seen this case and wouldn't use the home inspector if it was the case.

They're not in the business to give estimates on work. And I've had home inspections where they've noted even the smallest issues which have cost me $10 to $0 to remedy.

 

[Taughnter]

Things I'm not sure about:
*Property taxes. Do you have them escrowed (added) to your mortgage payment, or do you pay that yourself? I'm leaning towards us paying it on our own.
*Regarding the home inspection: were you there for the inspection?

Property Taxes (and homeowners insurance) are generally paid directly by the homeowner unless their Lender requires an escrow. Unless you are lazy, you ALWAYS want to pay this yourself rather than an escrow as the bank will usually have to estimate a portion of the year's taxes and you're paying it all in advance. In my experience, the escrow requirement is typically determined based on what sort of loan you get and how large your down payment is (i.e. less than 20% generally = escrow required).

As far as the home inspection, I've never heard of a buyer being present for the home inspection. The inspector will issue a written report (sometimes with photographs) to you and/or your attorney. It's far more common to be present at a walk-through on the day of the closing along with your real estate agent (if you have one) to ensure that any repairs have been properly made.

 

[HardcoreRobot]

when i refied, tried to get out of escrow but they wanted to charge a higher interest rate in exchange. no thanks.

when we bought i did attend the inspection. it was informative.

 

[dmoney1980]

Having been thru about a half-dozen home inspections, I never seen this case and wouldn't use the home inspector if it was the case.

They're not in the business to give estimates on work. And I've had home inspections where they've noted even the smallest issues which have cost me $10 to $0 to remedy.

Capt- were any of these inspections for FHA? I only ask because I remember FHA loans required roof and termite inspections as well.

 

[MikeyIs4Dcats]

Having been thru about a half-dozen home inspections, I never seen this case and wouldn't use the home inspector if it was the case.

They're not in the business to give estimates on work. And I've had home inspections where they've noted even the smallest issues which have cost me $10 to $0 to remedy.

Not saying they WON'T show you those things, but don't expect that you have recourse if he doesn't bring them up. They also limit their liability as well, so you don't have much recourse if they miss something.

 

[MikeyIs4Dcats]

Capt- were any of these inspections for FHA? I only ask because I remember FHA loans required roof and termite inspections as well.

True,. FHA and VA will nitpick every little item, but that is not typical.

 

[MikeyIs4Dcats]

Property Taxes (and homeowners insurance) are generally paid directly by the homeowner unless their Lender requires an escrow. Unless you are lazy, you ALWAYS want to pay this yourself rather than an escrow as the bank will usually have to estimate a portion of the year's taxes and you're paying it all in advance. In my experience, the escrow requirement is typically determined based on what sort of loan you get and how large your down payment is (i.e. less than 20% generally = escrow required).

As far as the home inspection, I've never heard of a buyer being present for the home inspection. The inspector will issue a written report (sometimes with photographs) to you and/or your attorney. It's far more common to be present at a walk-through on the day of the closing along with your real estate agent (if you have one) to ensure that any repairs have been properly made.

It differs by area I'm sure. And here, attorney's aren't involved at all.

 

[Capt Caveman]

Capt- were any of these inspections for FHA? I only ask because I remember FHA loans required roof and termite inspections as well.

No. And true about the FHA loans require specific inspections.

Not saying they WON'T show you those things, but don't expect that you have recourse if he doesn't bring them up. They also limit their liability as well, so you don't have much recourse if they miss something.

Gotcha

 

[Dirigible]

As far as the home inspection, I've never heard of a buyer being present for the home inspection. The inspector will issue a written report (sometimes with photographs) to you and/or your attorney. It's far more common to be present at a walk-through on the day of the closing along with your real estate agent (if you have one) to ensure that any repairs have been properly made.

I was present at my home inspection and talked over all the issues as the inspector found them. I highly recommend it.

 

[mshan]

Regarding the home inspector, I would definitely walk through house with him or her.

Don't skimp and hire cheapest one, find one that appears to be highly qualified, knowledgeable, and ethical.

I think they have a checklist of things to cover (liability protection for themselves) and may not want to stick their head out and pointing out something that is off script.

That is why I think it is a good idea to walk through house with that person and ask specific, direct questions about anything that might concern you, but which the inspector might not want to bring up without prompting because maybe sticking neck out legally.

I would also ask more general questions about what are typical problems of houses in the area, houses of that vintage, etc. (e. g. polybutylene, chinese dry wall, etc.). Do your own internet research and ask friends who own homes and even your realtor what types of significant problems they have seen over the years.

 

[BurnItDwn]

My property tax is escrowed to my mortgage payment. (both my current house, and my 1st townhouse I used to live in)

I came along for the inspection (both times)


Depending on where you work and how far you are willing to commute, I'd suggest you consider getting out of cook county to get away from the worst of the taxes. I'm up in Lake county, and my taxes on a 180K house are less than they were for a 115K townhouse in Crook county.

 

[kevman]

I would absolutely be there for inspection, it will give you a good idea of what needs to be addresses. You should get a seperate septic/well inspection of the property has that.

 

[JTsyo]

I never bought a short sale but from what my friends say it's a good deal. 5 stars for short sales.

 

[fralexandr]

my parents i think were in the process of buying a short sale, but then they found out there was flood damage that hadn't been disclosed... still enough time to back out though so there's nothing wrong with short sales in general

 

[j&j]

the best thing to know about short sales is that you have only a small chance of it working out and be prepared to wait 6 months just to hear them say no.

my wife works in the industry on the banking/servicing side, and trust me I know.


However, if you don't need to move and are willing to try to buy shorts sales for a few years, you can get lucky, but you will HAVE to get lucky to have one work out in your favor. don't forget the whole "as is" part if it turns out something big is wrong.

 

[FallenHero]

SS take forever and a day. Same with foreclosures. Plus many of those homes are torn up and need tons of work.

Where do you plan on moving? I live out in the Burbs and just bought a home if you wanna hit me up I can see if you are looking in my neck of the woods (Western Suburbs).

Also, I HIGHLY recommend Mike Lamb as your home inspector. He was FANTASTIC with us. Upfront, honest and points out more things then I would have expected. Also gives great tips on how to fix issues that he spots without spending tons of money.

http://www.inspection2020.com/