Buying A Short Sale

Otherwise known as – how we all took at least 10 years off our lives.

Also – my apologies for the emotional ugly cry I just took in front of all ya’ll. Selling your first house is hard (but spoiler alert – we did it)

The whole foundation of this blog is that we are moving. We’ve been in the process of buying a short sale home for MONTHS, and finally got close enough to the end line that we felt comfortable putting our home on the market. But it came down to the wire. And at the 11th hour and 58th minute it almost all fell apart. With that said, if you think you want to buy a short sale, assemble yourself the best team you can find. That is my number one piece of advice. To give you an example, here’s the approximate timelines and emotional rollercoaster we went through in purchasing a short sale.

• Early December, 2013. A house came up in RMLS listing that peeked our interest. You may have seen them, the descriptions say things like “great bones, needs work”. There is only one photo and its of the outside of the house. Yeah, those are the kind of listings we drool over. So we called our saint of a real estate agent and saw the house immediately. And despite that it had been previously owned by hoarders but now vacant of human life, we fell in love. We put in an offer the first day and were told they would review offers throughout the weekend and get back to us. So we waited.

• The next week rolls around and we’re told that someone had a higher, cash offer ahead of us that they had to take. But would we like to be in a backup position (informally).  We said yes, but tried to move on. It was the holidays, we had a million things going on with baby’s first Christmas, so on with life we went.

• January 13, 2014. The first deal fell through. The listing agent asked us if we still wanted in and we said YES! And jumped for joy! It had been over a month since we had been in the house, but we knew we had to go for it. So we became under contract officially. Now, here is where it starts to get tricky. See with a short sale, the home owners still accept the offer we made, but then it all gets turned over the bank for approval since the owners owe more than the house is worth. Thats what short sale means…the bank will come up short by selling it. Not that this will be a quick and easy process, quite the opposite actually.

• MONTHS go by, the sellers have to give documents to the bank (which, bless their hearts, they have to find). Also, the wife who had lived in the house passes away. Sadly, we knew she was ill and part of their financial hardships had to do with her medical bills. The silver-lining was that the man who owned the house was really glad that a young family was moving into this place.

• March 12, 2014. We get approval from the bank, saying we are good to close by May 9th! Hooray! Moving forward.

• Early April – we find out there is a tax lean that we have to pay now on top of our original offer instead of just out of the offer we made. We decide we’re willing to do that, its still a good enough buy. Figure out where to get more money. More addendums need to be signed by everyone.

• April 25, 2014. Our home goes on the market. PANIC!

• April 29, 2014. Accept an offer on our house. We have until June 10th and then we don’t have a house anymore.

• April 30, 2014. Appraisal for the new home happens. We can’t get a loan until the roof is inspected and cleaned and the leaking basement is addressed in some fashion. Find more money. Do the things. Move forward…clock is ticking.

• May 6, 2014 (3 days from closing). We aren’t ready to close for a variety of reasons. Sign more addendums. Send an extension request to the bank and hope for the best. Never hear back from the bank. We asked to push closing until May 23rd. Crickets. But we get all our financing in place, inspections finished for the loans etc. We’re ready to close.

• May 19, 2014 (5 days from closing part 2). Crickets. Hello bank. We are ready to sign…were you cool to accept that extension because we’re already past it and umm, ya know, want to buy this house. We find out we can’t sign anything until the bank signs this silly piece of paper. Begin to stress out at abnormally high levels.

• May 21, 2014. We get approval from the bank on the extension, but now they are only giving us until tomorrow (its Noon on Wednesday before Memorial Day weekend) PANIC.  Also, Dylan’s parents were on this loan with us, which allowed us to buy this house before closing on the house we were living in. But that also meant they had to sign docs immediately in Bend. Awesome. Love you guys!

• Still May 21. By a miracle of miracles, the Bend folks sign. MIL agrees to leave Bend the next morning at 5am to drive all the loan docs to Portland by 8am so we can sign by 9am and fund the loan by end of day.

• May 22nd. Loan closes. We went from waiting on approval to signing docs, and funding a loan in less than 24 hours. It can be done, but I don’t recommend it. This was the part that would have completely fallen through without awesome real estate folks, loan folks and title people. And organized financial documents. But we walked away with the keys – and then the fun really began.


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