There is this condo which is priced 140,000 in short sale. I am keen to consider it as I am paying 1350 rent for the same. What are some things that I need to look in to decide for this?

Also would it be better to continue renting in CA in the present housing situatio or buy when a good deal comes across? Thanks

We are also in the process of looking and bidding on foreclosed and short sale homes in CA. I’m not a professional but I’m learning a lot in the process. Some things to consider:

If you’ve been renting, it sounds like you’re a first-time home buyer (def: have not owned a home in the past 3 years). If this is the case look in CA for some special credits/deals for first time home buyers and see if they would apply to you. My advice kind of applies to buying a home in general, not just short sales:

Financially, have you looked into getting pre-approved yet? I shopped around and found a lender I liked and trusted first before I found a real estate agent. Most people do it the other way around, but I was mostly concerned about working with someone who was honest about my money.

Even though you’re paying the equivalent in rent as you would in a monthly mortgage payment, financial necessities to consider are:

1 – Do you have enough $ for 1% of the purchase that will become the escrow? If your bid on a house/condo gets accepted they will want that money.

2 – Do you have enough $ for a down payment? I think FHA loans are asking for 5% of purchase price down and typical bank loans are requesting 20% down minimum. They are probably going to want to see that you have the money for down payment.

3 – Do you have enough money for closing costs, which is typically about 3% of the purchase price? If the seller does not pay closing costs then you will also need that money up front.

4 – How is your credit? The higher the credit score the better loan you could get.

The time it takes for a short sale to happen could be what you need if you are working on improving your credit or to save money for all the above mentioned up-front costs.

Sometimes the price listed on a short sale is what the listing agent posts to get buyers like you interested but may not be what the bank will necessarily approve. Decided how much you really want to bid as your purchase price and work with your lender to realistically figure out how much you can pay in monthly payments, including taxes and stuff.

And be prepared to wait – short sales should be called ‘long sales’ because of how long the process takes. I hear banks are getting better and faster but in CA there are so many short sales everyone they have a hard time keeping up with the paperwork. Reality may also be that you wait a long time to find out if they accept your offer. Someone I know waited 10 months to find out their offer was not accepted.

Sorry this was so long – I hope it helped! Good luck!

I have recently found a home that are going into short-sale. How do I go about to purchase this property? The listing agent is non-responsive and basically unfamiliar with the process. I have contacted the lender and it says that notice of default hasve been sent back in December, and it will be forecaslosed in March. At this point, the lender told me to talk to the listing agent and that they can’t do anything until March. Any recommendation?

A short-sale is a last ditched effort by the seller to get rid of their house before it goes into foreclosure and ruins their credit. With a short-sale you will need to make an offer on the property just like you normally would. The listing agent then needs to take the offer and get it approved through the lender. They will have to agree to take less than what is owed on the loan. Just a fair warning…. not all lenders are willing to do a short sale. They have every option just to hold out and go through with the foreclosure process in March.
I am curious what city is the property in? I am a real estate agent and do a lot of properties in Orange County and Riverside County. Let me know if I can help. Ginac72@yahoo.com

I put an offer in on a house over three months ago that was approved for short sale and, from what I’m told is about to go into foreclosure. It has been over three months and I am still waiting for the sellers bank to approve the offer. Three months seems excessive to me to wait and not even have a purchase agreeent yet. Is this normal? I’m concerned there is something shady going on with the selling agent for this to be taking so long. Do I have any rights or am I just stuck waiting it out?

They are taking over three months in CA. The banks are in no hurry.

I need to be out of my house in three months due to foreclosure. I will be within the timeframe of needing to leave so as not to be evicted. How hard is it to get an apartment with this background? Outside of the foreclosure, my credit is fine, i,e. I pay my bills, etc. and I have a full-time job.

Might I suggest some help for you? Go to www.daveramsey.com and look for the ELP (endorsed local provider) in your area. Here’s the link:

http://www.daveramsey.com/elp/home/

You may get more pointers and advice to help you to ease your foreclosure issue or at least get a 2nd opinion.

As far as getting an apartment, you may just want to save a stack of cash for where ever you intend to live. You may also want to consider renting a room in a house.

Good luck!

I’ve been told that they require at least a 30+ day late on my mortgage. I’m OK with a short sale on my record if need be, but why do I have to go late in order to get the short sale done?

No one should ever advise you to be late on anything. FHA doesn’t not "require" you to be late, and your lender doesn’t either. This would go against the note you signed saying you would pay. FHA doesn’t own your loan a servicer like Bank of America, Wells Fargo etc does and your servicer is who will approve or deny your short sale request. They are the ones losing the difference between what you owe them and what you are selling the house for. What’s the reason for your short sale? Hardship? Short Sales can take months and months and months. I’m sure the reason you’ve been advised to skip a payment is to get your servicer to sit up and take notice at a potential default in progress, but I’d recommend you talk to your current lender. Good Luck!