Throughout Rookie Roosts Week, we'll be hearing from first-time homebuyers with tales both awesome and terrible (the terrible ones will compete in our horror stories contest for a chance to win a $2,500 home store gift card - standard contests rules apply). Got a first-time homebuying story? Hit us up at the tipline. Today's tale: going from one frustrating short sale to another, differently frustrating short sale.
My husband and I are both architects and avid weekend warriors, so we had a pretty good idea of what we wanted; a barely livable house in the neighborhood where we were currently renting that we could camp out in for a while and hopefully eventually fix up.
We would have even settled for sub-livable, but found out quickly that the bank is extremely reluctant to lend on those, so the house had to meet certain standards.
Once we met with a mortgage broker and found out what our tiny price range was, we started looking. Right off the bat we found gold; a dumpy, three room shack on a large lot with an alley and a view of the ocean! And the asking price was within our price range! Score! Our realtor informed us that the seller was taking offers until today, so we found ourselves in her office at midnight filling out the paperwork.
So we submitted our offer and waited. The house was a short sale, which we knew nothing about at the time. But we were soon to be educated?or not?
We continued to wait. There was not a peep from the seller’s agent for weeks. We asked our agent what the deal was. She said that she didn’t know much about short sales, but that they were probably negotiating with the mortgage holder at this point. But we really, really wanted this house, so we waited longer.
Finally we decided to halfheartedly start looking again. What was available and in our price range was very limited, but we eventually found another shack, which was another short sale. No ocean, no alley, but a good location nonetheless. With heavy hearts we rescinded our first offer and wrote one for this house. In retrospect I realize how lucky the timing was. The bank had agreed to a price with another buyer but they pulled out just before we toured. If we hadn’t accidentally swooped in at that moment and offered the exact same amount we might still be in short sale purgatory.
But then the adventure began. Our agent told us that we absolutely had to close in 45 days?or else? Or else what? She wasn’t sure about that. She didn’t know much about short sales. We went through the requisite inspections. We thought we were circling in on a house. Until I got a call?
Turns out there was a second mortgage on the house (zoinks!), and it had just gone into collections today. If we wanted the house, we were going to have to pony up $14,000 to drag it back out. After using our life savings for the down payment we didn’t have that kind of money lying around. Could we roll it in with our financing? Our realtor wasn’t sure (she didn’t know much about short sales) but we found out from our mortgage broker that we could. But that put us behind schedule. Now we might not close on time. And if we didn’t, were we out $14,000? (you guessed it?nobody knows!)
With the closing date approaching fast I made the mistake of not answering my phone at 10:30 on a Sunday night. The next morning our realtor berated me for not picking up and authorizing a plumber to go in and replace the inefficient toilet with a low flow one that morning. She worked out the math in her head and now we weren’t going to close in time (because now the bank wanted to close a few days early. Why? See above.) but after a lot of phone calls and hand-wringing she worked up a waiver that we could sign saying we would install one after we moved in.
So we were ready. Loan, escrow, insurance. Everybody was lined up. We were supposed to close the next Wednesday so we felt OK about going out of town on a long weekend we had planned for a while. But after I offhandedly mentioned to our agent on the phone that we were in Seattle, she went off the rails. “You have to come back! This minute! You might need to sign something and have it notarized and you can’t do that from Washington!” Like what? Yeah, we didn’t know either, but she put the fear right back into us, so we hopped on some $500 last minute seats back to LA. Nothing eventful happened until Wednesday until we signed the papers and got the key.
It may seem like I’m giving our agent a lot of grief, but she was a trooper, especially considering her commission from our purchase was not very much. The moral of this tale might be to find someone experienced in short sales, but judging by how many snake oil peddlers you find when you google ‘short sale specialist’ the waters there might be almost as tricky. I don’t know if I know any more about short sales than when we started this; I imagine each one’s pain is unique and special.
Once we moved in, we looked for the wasteful toilet. Both were low flow.
· Mortgage Broker Takes (Extreme) Issue With Lack of Sale [Curbed LA]