Short Sale - Questions, please help!

So I put in an offer on a short sale and the offer was accepted, signed contracts last night. It is not an approved short sale. The agent has not told the bank that the house is even up for sale. The sellers have not paid on their mortgage since April 2010. Here come the complications.

We offered probably about half of what the seller's owe. On the market now, they paid waaaaaaaaaaaaaay too much for their house. The taxes are astronimical and we offered probably what the going rate in the area is.

I'm in the process of selling my house. It is on the market, but I have no offers and no one really looking at it. We're priced a little high right now, but I'm trying to give it some time so no one wants to buy my house right now. I will be selling my house for less than what I owe and paying off the difference.

My inlaws also need to sell their house. They need to live with us because they aren't able to really care for themselves anymore. They have tons and tons of people looking at their house (they are in a convenient location) and one low-ball offer on their house. The guy who made the offer is a neighborhood acquaintance of my inlaws, and is willing to wait to close until we are ready. I need the money from my inlaws house as a downpayment on the new house.

Please, anyone, advice? Am I making the hugest mistake of my life? When we went to the lawyer to sign the contracts last night, he made us sign a waiver that says he expressed his concern and recommended we NOT do this deal. We only put a $1k down payment on the house, so that is really all we have to lose (not to say that its not a lot of money - but worth the gamble if we get this house).

Thanks...I'm so nervous!!! Any advice is appreciated!!!

Re: Short Sale - Questions, please help!

If the bank has no idea the house is even for sale it could be an extremely long process

Re: Short Sale - Questions, please help!

Its a long process just to have the bank approve the short sale, then all the other crap that goes with it. Honestly lauren, i would keep looking and walk.

Re: Short Sale - Questions, please help!

There is a lot going on here, but bottom line - I agree with your lawyer!

I think you should sell whatever you need to sell BEFORE you purchase something new. I know you said that you need the proceeds from your in-laws sale to make a down payment on a new house, but I assume that you cannot carry mortgagse on both your current house and a new house (and I don't think you could get one).

I would price your house right for the current market and try to get it sold. It's true the market has shifted a bit, but while you may need to take a little less on the sale of your house, you can buy more with your money (and interest rates are still low).

As far as the short sale you made an offer on, if the short sale is not approved and the bank doesn't even know it's on the market, the likelihood of your offer being approved is small, and if it is, it will probably take a long time because there are a lot of steps in the process. For example, the sellers in a short sale need to demonstrate hardship to the bank (job loss, illness, some change in circumstances) before the bank will even consider it. And even then, the bank will want to get a certain amount and it seems like your offer is really low. And each bank is different. Even if the bank did approve your short sale offer, you usually need to be prepared to close quickly (within 30 days) once the bank approval is given. It doesn't sound like you could do that.

Also, the taxes being astronomical don't justify making a much lower offer on the house. But if they are so high, why do you want to purchase this house? There is so much out there, I think you could find a better house (lower taxes, etc.) once all of your other ducks are lined up, so to speak.

Good luck!

Message edited 3/3/2011 8:58:03 AM.

Re: Short Sale - Questions, please help!

Re: Short Sale - Questions, please help!

Thanks everyone.

I suppose I'm not in any real rush to get out of my house or get into this house.

Do you think its worth the wait at all? If I can get this house for this price, you would not believe how worth it that it would be...

Should I hang out and wait just a little bit to see how it goes with the bank or totally not worth it and never going to happen?

Re: Short Sale - Questions, please help!

If you were my client I would advise you against this deal

it doesn't seem like the people handling the short sale have any idea what they are doing so the odds of this happening are not good

you could be waiting a year or more to have the bank not accept the offer

Re: Short Sale - Questions, please help!

Thanks everyone, I know you're all right, its just hard to accept. Love this house. Booooo...