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Closing on a home by April 30th

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Just this past Monday I have started the loan process for obtaining a home. I picked out some listings that I like and my Realtor said that they are pretty much all short sales. I heard it can take a few months to close on a short sale so basically what I would like to know is there anything I can do to make sure I can buy a house by April 30th?

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Find out who is servicing the loan before you entertain looking at a short sale.

If it is Countrywide or BOA - stay away from it. The Realtor will have to contact the listing agent to obtain accurate information because loan servicing is sold (even if it is in default) and not recorded in the public records.

The short sale offerings that have the most probability of closing within your time frame are those that are already approved and for some reason the deal did not close. Many times the previous buyer walks after several months of negotiations and then the lender approves the deal so those are ripe for the next buyer. New guidelines are supposed to help with short sales, but they won't come into effect until April 5, 2010. http://www.nytimes.com/2009/12/13/realestate/13mort.html

In the meantime, consider homes that are not short sale offerings; REO properties or 'regular' sales come to mind. Those are your best options for being under contract by April 30, and closing by June

BTW, the short sale offerings that have the best chance of approval are those with one loan only. That is not to say that they don't close if they have a first and a second, its just that there is a better chance of approval with one loan.

Edited by Denita

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I started to clean up my credit with the intention of buying a house. I purchased one Oct 2008. It was a foreclosure (previous homeowner was out of the picture for a while--it sat vacant for about seven months). Immediately prior, we had tried to buy a short sale. It was an absolute mess. I don't know if things have changed, but a year ago by the time a homeowner got to the point of trying a short sale, they'd already taken out a second mortgage. So now we had two banks that have to approve the short sale. Plus the homeowner. Add into the mix: the homeowner's attorney and the listing agent.

The banks were taking forever to negotiate with each other and homeowner finally just said "f it" and did a deed-in-lieu of instead. So after months of unbelievable stress, we were left with nothing.

Moral of the story: Short sales can be extremely complex and frustrating. I'd recommend that you stay away from them if you want to close by a specific date. Look at REO listings instead.

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it seems as if like 60 percent of the homes I'm looking at are "flagged as short sale".....does that number sound accurate?

Could be accurate, but I don't know your area. Here I have to check each listing individually regardless of the flag because sometimes the listing information is just not correct. This could be due to an input error or an error if the information is transferred from one system to another OR just an agent error. Your agent will know the percentage of short sales in a given neighborhood. We have some newer neighborhoods where nearly 100% of the listings are short sale offerings! You do have to look at the neighborhood, rather than the entire area. This will give you the most accurate info for short sale offerings. Here, if the neighborhood is newer, built 2003 and later, then the percentage of short sale offerings is going to be much, much higher.

First I check the recorded mortgages on the properties that meet the criteria, then check with the listing agent as to the short sale package info (and whether it is an experienced ss negotiator/agent the seller has retained). Some sellers have the capacity to bring in the $$$ to closing and those properties naturally move to the top of the list because you don't actually have to go thru the short sale process. Most sellers do not have this ability. Secondly I am checking to see who the servicer is for each of the loans, how far behind the seller is in payments, whether it is a true hardship situation by the seller or just a 'strategic default', etc. These answers will narrow out those properties that have no chance of closing so we can concentrate on the ones that have a good shot at getting an approval by the bank.

I have to agree with ShortBus about how frustrating short sales are and the percentage of successful closings is low. If you have a deadline, look at the REO or regular sales instead.

Edited by Denita

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Thanks for the help, guys. Although if I have to miss out on buying a home that I really like just because I want to close by a certain date, I'm not gonna wanna do it. I'm just hoping that if I find the one house I want that I can close by that date and get the tax credit.

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I'm just hoping that if I find the one house I want that I can close by that date and get the tax credit.

Again, you only need to be under contract by April 30th to get the tax credit - not closed.

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I would continue to look, but the housing market may just get worse than last year......I would pinpoint a couple I would put on my must list, but I would tread very lightly in jumping the gun because of the tax credit, I think it will again, get an extention.

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I would continue to look, but the housing market may just get worse than last year......I would pinpoint a couple I would put on my must list, but I would tread very lightly in jumping the gun because of the tax credit, I think it will again, get an extention.

Right, well I would prefer a house that I really like over $8,000, but obtaining that would surely be a plus! :)

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I would continue to look, but the housing market may just get worse than last year......I would pinpoint a couple I would put on my must list, but I would tread very lightly in jumping the gun because of the tax credit, I think it will again, get an extention.

I agree - I think we'll see another extension, but it might be the last one. Even with all the stimulus/recovery spending, this won't go on forever.

An extension would be good for me, because if I end up buying my current rental from my recently deceased landlady's estate, I'm not sure we'll be under contract by 4/30.

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