8.21.2013

Diary of our short sale home purchase

We just bought a new house!  Last time we built a house which I found very stressful and didn't enjoy.  This time we wanted to buy an existing home.  As luck would have it, we fell in love with a short sale.  We had looked for over a month before finding this house and knew that it was ours as soon as it was listed.

This was not a smooth process.  It was about 4.5 months from offer to closing, which is miraculous compared to some short sales, but it was still a long, stressful, sucky waiting period.

Throughout that time I kept googling for info on short sales- timelines, how the banks involve handle short sales, etc- and quickly found out that there IS no real good guideline for how a short sale will go.  Nonetheless I decided to document and share the progress in the hopes that it helps someone out there.  This is exactly the type of info I would have loved to find in my searches.

Things I want to point out:  

-Having 2 liens against a short sale = probably would run if the situation ever came up again.  They spent over a month just hashing out who got how much money from the sale between them.
-We got incredibly lucky.  This house was only built a few years ago, was kept pristine, and the owners short-sold due to job relocation, not financial hardship.  They were great every step of the way. Some sellers don't really want to lose their house and can make things difficult or even trash the house.  Ours not only kept it gorgeous but left behind things like a lawn mower, stainless steel fridge (all other appliances included in sale), and tools.
-We got early access to the house to allow for cleaning, mowing/weedwhacking, and to get our household goods delivered.  This isn't really normal and may be confusing in the timeline- remember how I mentioned the sellers were great?  They really were!

Ok, let's get down to the info!  Lien #1 on the house was with Nationstar, who I had never heard of prior to this.  Lien #2 was with Bank of America.  Bank of America used to hold both liens but shortly before the house was listed, Lien #1 was sold to Nationstar.

March 30, 2013:  Saw house listed online

March 31, 2013:  Submitted offer ($2,500 above asking price) based on photos alone as we are both out of state and want to move fast.  We know several people in the area which makes us confident in the neighborhood.

April 1, 2013:  Sellers (not their bank) accepted our offer and sent it to their lender

April 16, 2013:  My negotiator "urgently" requests my lender info (and gets my hopes up)

April 30, 2013:  We sign to extend contract

May 2, 2013:  In my previously mentioned googling for info, I find out that Lien #1 is notorious for making sellers use auction.com for short sales even if there are offers on the property in order to solicit a better price.  In addition I read that Lien #1 is known to not give any sort of closing cost assistance unless you finance through them.  Most alarming, however, is that I read that Lien #1 requires the short sale buyers to apply to finance through them regardless of if the buyer already has financing already.  It's emphasized that the buyer does not have to use them, but that the application is part of the approval process.  I flat out will not agree to this if it comes to it- every application like that is a credit hit, for one thing- and e-mail my Realtor all the info I've found.  She passes it on to the Negotiator for our side who assures her he has not dealt with that before.  *Note that in the end, NONE of this came up, for which I am very grateful!*

May 14, 2013:  Short sale lender completed their appraisal and accepted it without contesting it.   We extend contract again and are told 5-7 days to finish up paperwork.  We are told the appraisal belongs to them and can't see the information, which is annoying.

May 20, 2013:  It is suggested that we schedule the home inspection to start getting ready to close, and we agree.  After a few days of no contact from the seller's bank, we cancel this for now.

May 24, 2013:  Hubby has arrived at his new duty station and is able to actually go see the house in person for the first time.  I am unable to travel due to pregnancy so he sends me a video.  Luckily, we still love the house after seeing it for real!

May 30, 2013:  Seller's lenders request info from us such as SSNs and our mortgage lender.  Again we get our hopes up.

June 6, 2013:  We sign to extend contract for the 3rd time after spending a weekend house-hunting for non-short-sale alternatives with no results.

June 10, 2013:  We keep hearing "Any day now!" from negotiator and no longer believe it (a month ago we were told 5-7 days, remember?).  Our contract was only re-signed for a week so we make an offer on a newly built home.  Builder counters for more than it's listed for.  We decline.

June 13, 2013:  We sign to extend contract for the 4th time.

June 17, 2013:  Seller's lenders AGAIN request info similar to May 30th request.

July 15, 2013:  Yes, a month went by with NOTHING happening.  The 2nd smaller lien on the house wanted more money in the deal, and sellers agreed to kick that money in, so 2nd lien gives approval verbally.

July 16, 2013:  On the good news of one lien giving verbal approval, we go ahead with the inspection.  Overall it went well, but roof has some storm damage.  Sellers agree to pay to fix the damage (it's minimal).

July 17, 2013:  Hubby and I have both signed mortgage paperwork on the house.

July 26, 2013:  Mortgage approved, underwriting completed pending appraisal and cleared title.  Lien #1 still has not given approval.  Roof repairs completed.

July 29, 2013:  Lien #1 is waiting on Lien #2 to give their approval in writing.  We were told they would send it on 23rd.  Did not receive it until today.

July 31, 2013:  Lien #1 counters the closing cost assistance in the contract.  We asked for $2500 (and offered $2500 above asking), they counter with $2000.  We aren't going to kill the deal over $500 after all this time and I'm sure they know that.  We accept and sign.  We think this means approval coming soon.

August 7, 2013:  Appraisal came in and it's great news for us!  Still no approval from Lien #1.  Someone either at my lender or Lien #1 is having issues with the HUD-1 form, not sure who.  As usual we're told this is "THE LAST STEP" until Lien #1 approves the sale.

August 8, 2013:  Seller's bank's appraisal has expired and it must be current to close.  The ball was dropped due to bank's negotiator's wife giving birth and no one else handling the paperwork in the meantime.  Same day appraisal is scheduled.

August 9, 2013:  Lien #1 approves!  We are good to move forwards!  Sign contract amendments to close on the 15th.

August 15, 2013:  This is the day we are supposed to close.  We were told all our paperwork is at the title company and they are trying to rush it.  Things are made complicated because both of the sellers and myself will have to sign, notarize, and overnight documents back.  Only hubby is in San Antonio.

August 16, 2013:  We are told that the title company had to correct the HUD-1 form and that first our lender and then the two short sale lenders have to approve it before we can close.  They now believe we will close on the 20th or 21st and fund (and get keys) on the 21st or 22nd.

August 17, 2013:  In a twist I've never heard of, without even having to lease the house before closing or anything like that, hubby is given access to the house to get it cleaned and ready to have our things delivered.

August 19, 2013:  I am told that our lender has approved the HUD-1 form and that Lien #1 has approved as well.  I have seen Lien #1's approval.  Unsure where Lien #2 stands- may be done since Lien #1 usually makes them go first.  A local notary (I am out of state) calls me to talk about signing tomorrow but notes that he has not received title company's paperwork to do so yet.  Title company does not return my phone calls trying to find out what is going on.  Realtor requests HUD-1 from title company so that we can see what we need to pay at closing.

9:15 PM Local Time, 10:15 PM for me in NC, August 19, 2013:  Title company calls me with the clear to close, e-mails me paperwork, and tells me we will be signing tomorrow and hopefully funding/keys the day after!  I am in shock that she is still at work but quickly panic when I see the closing documents list that we owe $8100 in closing costs.  I call my Realtor (around 9:30 PM her time at this point) who goes over the HUD-1 form with me and realize that actually, we're getting credited $500, so we actually owe $0!  Our estimate was $2500-3500 (went up after Lien #1 countered our closing cost assistance request).  I still don't believe it until the closing is over.

August 20, 2013:  Title company calls me again, goes over paperwork (all 105 pages!), and tells me sellers will be signing today.  Hubby is scheduled to go in person to close tomorrow at 11 AM.  Our household goods arrive at the new house!  Early in the afternoon I get all my copies of the closing papers signed, notarized, and taken to FedEx to be shipped overnight mail to the title company.

August 21, 2013:  At 11 AM local time hubby signs closing documents.  At 2:30 PM local time, we get a message that the closing and funding have been completed!  The house is finally ours!

Still to do:  We still have to switch utilities into our name (will be done tomorrow), set up our HOA account (will be done when title company sends HOA the settlement statement), update things like our bank account with our new address, file change of address form with post office (both on tomorrow's list as well), and of course unpack, decorate, re-landscape, buy a new dryer (ours is gas and the new house needs an electric one), a new kitchen table (we didn't have a formal dining room- now we do, and our current marble topped kitchen table is perfect for it!), replace some broken furniture (mostly our desks), replace guest room bed (the mattress sucked so we ditched it), consider replacing couch (it didn't come out of storage smelling all that great), aaaaaand last but not least, in a few months move myself, our toddler, our soon-to-be-born baby, and allllll of our toddler's bedroom furniture from NC to TX.

Whew!

5 comments:

  1. Congratulations on the successful purchase of your new house! And as you intended, sharing the whole process here will truly be helpful for anyone going through the same long, tiring, and confusing process of buying a house. It's a great thing that you equipped yourselves with proper knowledge about the whole thing before going at it, as it's easy for anyone to get lost and entangled in between all of this processes. Good job!
    Drew @ Churchill Mortgage

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  2. good post,I am glad to visit your website.. This article gives the light in which we can observe the reality and it is very useful one and gives in depth information.
    Roof repairs poole

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  3. It is great to know these things from someone who has experienced both building a house and buying an existing home. It's easier to weigh the pros and cons on certain aspects. I truly appreciate you sharing all these. :) Like what Drew said, these can be helpful to those who are planning the same venture, especially first-timers. And I hope they experience the same smooth process as yours! Gregoria@Playa Negra Realty

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  4. In buying a house, it is important to check its roof. Good thing you were able to see the problem and that the seller agreed to fix the problem for you. It's never wise to buy a house wherein you will have to shed a lot of money doing renovations.

    -Lenore Rushford @ Cooley Roofing

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  5. It seems likely Short Sales will continue to dominate our Las Vegas market for some time to come
    short sale

    ReplyDelete