Tuesday, March 22, 2011
A Short Sale Short Story
About a month and a half ago I mentioned that Dan and I had put in an offer on a house. We were super excited and, despite the fact that it was a short sale, felt confident that the house would be ours. We did everything by the book, offered the asking price and hoped that some good karma would come our way.
That was all before I remembered that banks don't really work with karma.
Long story short - the offer fell through. Apparently the short sale department of the bank does not always talk to the foreclosure part of the bank and so the house was foreclosed and sent to auction despite our offer being in and us being totally qualified to buy the home.
Funny...I suddenly had a flashback of dealing with US Immigration...
Anyway - Dan and I stewed and felt sorry for ourselves for a few weeks. It was a loss and felt as such. We had already made grand plans for what we would do to the place and how cute it would look and blah, blah, blah...time for a reality check...also known as a life lesson. Here is what we learned:
1) Going after a short sale is a gamble. You may walk away with a great deal - or you may just have to walk away. The banks are in it for every cent they can get while at the same time trying to deal with a large volume of short sales and foreclosures, so don't go into it under the false impression that they have all of their ducks in a row because they very well may not.
2) In a weird matter of procedure that I don't totally understand, in a short sale, it is the owner of the house who sets the price - NOT the bank. However, it is the bank that ultimately has to accept the offer. This means that just because you offer asking price of the home, the bank can still come back and say they think the home is worth more. We were never afforded this option, but don't get fooled into thinking the price of the short sale is actually reflective of what the bank is hoping to get out of it.
3) Going to Home Depot and pricing out a new kitchen, new hardwoods, new showers, new tiles, etc. etc. for a home that you don't have yet is not the best idea. I believe the phrase, 'Don't count your chickens before they hatch' nicely illustrates my point.
4) Lastly, as my Dad always says, "There is always another house and another car." 'Nuf said.
So, after weeks and weeks of looking at more homes, feeling discouraged and wondering if this was something we should even think about doing right now - we found another house that has caught our attention. It is not a short sale (YAY!), a bit of a fixer-upper (which we like) and we think it has a lot of potential.
Keeping in mind that this one could fall through, and staying far away from Home Depot, we are cautiously optimistic.