Short Sales and Foreclosures, Are We Having Fun Yet?

Short sales and foreclosures can be good investments, but they can take a lot of time and patience. Last month I had a buyer ready to pay cash for a home in the $120,000 to $140,000 range. His lease was up on his apartment at the end of June, so we needed to close on something by about the third week of June. He first contacted me on May 24th, so we had plenty of time... you'd think.

On our first trip to look at homes, he and his fiance wanted to see homes with pools. We looked at about six homes. They loved the last one. It was a fantastic house with five bedrooms and a pool. It was a short sale, meaning the lender would need to approve the sale and agree to take less at closing than was owned on the home.

I called the agent and was told that she had submitted an offer to the bank over two months ago, in March. She was still trying to get the bank to set the price they would accept. She didn't know for sure if that buyer was still interested, but she didn't think so. We submitted an offer but continued to look at homes.

We found another home they really liked. It was a foreclosure. Big house with four bedrooms, a game room, and a media room. All the ceiling fans and doorknobs were missing, but it seemed to be in pretty good shape otherwise. We put in a full price offer. They received 8 offers and the agent informed me that another offer had been accepted. Darn!

We found another foreclosure in the same neighborhood as the short sale, with almost the same floor plan, but no pool. They had just lowered the list price from $159,900 to $120,900. We put in an offer for about $5000 over list price. The bank received 12 offers and chose another.

We were still communicating with the short sale agent and she was still trying to get an answer from the bank. We were into the middle of June by now and panic was setting in. On the 16th of June the agent for the foreclosure with the media room called me to say they were accepting our offer. Woo hoo! Never really found out what happened the week before when they said they had accepted someone else's offer.

Now all we had to do was get all the paperwork ready to close before the end of the month. We were shooting for about June 25th, but the resale certificate from the HOA wasn't received until the 26th, so we closed on Friday the 27th, leaving the buyer 3 days to replace ceiling fans and door knobs and move out of his apartment.

The agent for the short sale with the 5 bedrooms and fantastic pool called me this week to say the bank has said they are willing to accept $137,000 with no buyer concessions. The original buyer has moved on so... if you're interested in this home call me! It's located in the Eagle Mountain - Saginaw school district. This one should go really fast now that the lender is ready to move it.