We did things rather out of order with this housing issue. We put in an offer on Saturday for more than the amount we had been approved for with the bank. Then we went to the bank to see if we could raise our approval. Fortunately, they were willing to do that so we won't have to back out of our end of the deal.
We signed our lives away with all the paperwork on Saturday, and our wonderful realtor explained the process to us. Once we put in an offer with the listing realtor (the one who's selling the house), she will take it to the owners for their approval. If they approve everything, then the agent will take the offer to the bank since this sale is a short sale. Our realtor Katerina was also kind enough to talk us through what a short sale is, which for those who do not know is as follows: when a homeowner can no longer pay their mortgage they have two options. Those options are a short sale and foreclosure. Banks are getting pretty tired of foreclosures in this market, so short sales are increasing in frequency. A short sale is kind of the first step to a foreclosure. The bank and seller both agree that the house needs to be sold as soon as possible, and at a lower price than the balance of the mortgage on the house. Since the sale will be short to pay off the mortgage, the bank will swallow the losses and write them off at the end of the year on their taxes or whatever they do. The seller does not make any money off the house, but they are no longer liable nor do they have to pay taxes and the mortgage payments on that house. If a bank is willing to do that, it's a good alternative to a foreclosure. It also doesn't hurt your credit as badly I don't think.
Anyway, once the seller agrees to the offer, it gets sent to the bank for approval. That's where we are right now. The seller has approved our offer (wooo!!!) with only a minor change. It was listed with the realtor that they were also selling their fridge, but they have decided to keep that. I think we're okay with that since our offer was lower than the asking price. Now we're just waiting to hear from the bank!
If/When we have a contract on the house I will post a picture. :)
That's super exciting!!! I hope everything works out so that I can come and visit ya'll :D I can't wait to see pictures.
ReplyDeleteI learned about short sales on House Hunters! Buying a house seems fairly complicated and I'm kind of glad that I'm just dealing with renting right now.