Buying your first home in US. Headache or super fun time?

[silvana.toma 15]

Buying a house in the US is the worst process ever. They really know how to take the fun out of it. lol

Sometimes i feel i need a 4 year college degree just in real estate and banking to understand this buying process. I hope we never have to sell the home once we buy it, because it's a real pain in ..well...you know...

I was reading about short sales...but forget it..it's too complicated!

[Fandango 1,439]

Meet the scenario! That's exactly what happened to our short sale purchase.

That's crazy! Sounds like they are doing it azz-backwards!

[Fandango 1,439]

Thanks a lot for suporting me, this gives me peace of mind we are not the crazy ones here.

WE did saw the house in day light, it truly is an amazing house....in 2005 the previous owner bought it for 300k, now we offered 175k for it(it was on the market for 169k, but offered more cause we had competition), so if we get it ...we truly got ourselves a steal.

All in all if we get this house i would be really happy, now we are waiting on the bank to say yes to our offer and we are good to go! But short sales are soo slow...they should not be called short sales. We have been waiting to hear back from the bank for 2 weeks now...and the realtors told us it will probably take another week...

It's sad we had this bad experience with realtors, but in the same time i know there are some amazing realtors out there!

This confuses me, because I don't have the luxury of being licensed in other states, so I don't necc know if it's just a different way to do things there, or the listing agent is a moron.

I'm a CDPE - Certified Distressed Property Expert - basically, it means I have extra training and a professional designation dealing with short sales.

I hate putting disclaimers on everything I write, but for the interest of clarity, this is only speaking for Florida, although I would speculate that it would be the same elsewhere.

With a short sale: the homeowner still technically owns the house...so they are the seller. The buyer makes an offer to the seller, which (s)he can reject or accept. If seller signs the offer, it is an executed contract. Technically, only ONE contract goes to the bank, not an offer, and not multiple offers: only one executed contract.

Also, seller can't sign multiple offers and send them to the bank for approval of one: technically, doing that commits the seller to sell the house however many times depending on how many offers (s)he signed. (I have dealt with listing agents who have actually done this)

So, saying that - you should at the very least know by now whether you are in contract or not. There are no more 'offers', you should only be waiting for approval from the lender on the contract sales price. Think of it this way: when a buyer makes an offer on the house, he does it with a financing contingency which requires third party approval. Meaning, (s)he needs a bank to accept it. In theory, that's the bank's role in a short sale contract....3rd party approval, but not a primary of the initial contract. They cannot 'accept the offer' technically speaking...you should already be locked into a contract with the seller.

Did that make sense or am I going off on a tangent? lol

Edited March 7, 2011 by Lisa C

[silvana.toma 15]

This confuses me, because I don't have the luxury of being licensed in other states, so I don't necc know if it's just a different way to do things there, or the listing agent is a moron.

I'm a CDPE - Certified Distressed Property Expert - basically, it means I have extra training and a professional designation dealing with short sales.

I hate putting disclaimers on everything I write, but for the interest of clarity, this is only speaking for Florida, although I would speculate that it would be the same elsewhere.

With a short sale: the homeowner still technically owns the house...so they are the seller. The buyer makes an offer to the seller, which (s)he can reject or accept. If seller signs the offer, it is an executed contract. Technically, only ONE contract goes to the bank, not an offer, and not multiple offers: only one executed contract.

Also, seller can't sign multiple offers and send them to the bank for approval of one: technically, doing that commits the seller to sell the house however many times depending on how many offers (s)he signed. (I have dealt with listing agents who have actually done this)

So, saying that - you should at the very least know by now whether you are in contract or not. There are no more 'offers', you should only be waiting for approval from the lender on the contract sales price. Think of it this way: when a buyer makes an offer on the house, he does it with a financing contingency which requires third party approval. Meaning, (s)he needs a bank to accept it. In theory, that's the bank's role in a short sale contract....3rd party approval, but not a primary of the initial contract. They cannot 'accept the offer' technically speaking...you should already be locked into a contract with the seller.

Did that make sense or am I going off on a tangent? lol

Yes! it made perfect sense to me!

When we were getting ready to put an offer on this house we were informed there is another couple who is putting an offer in, so our real estate agent said we should offer more than the listing price to make sure we will go further with this. The other couple lost "the battle" as our offer was bigger, so now the bank is only dealing with our offer. So even if we offered 6k more than the asking price i would asume the bank can come back and refuse our offer? AS that price is set by the owner -who wants to get rid of the house so he doesn't fall into foreclosure. Am i correct?

YEs, a short sale still has owners, and they already signed that they agreed on with our offer etc, but now we are waiting for the bank to accept it...and we are good to go. It just takes soooo long, the suspense is killing us! We would be lucky lucky lucky to get his home. 6 years ago someone bought it for 300k now we are hopefully getting it for 175+closing 5k so 180k but still super cheap. The house has every upgrade you could possible imagine...real stone around the fireplace, pillars in the kitcken and sitting room(bedroom), 5 bedrooms, 2 huge living rooms, what more can one want???it's a dream...and i hope we get it!!!

wish me luck! i will let you know how it goes, we should hear back from the bank this week.

[Fandango 1,439]

Yes! it made perfect sense to me!

When we were getting ready to put an offer on this house we were informed there is another couple who is putting an offer in, so our real estate agent said we should offer more than the listing price to make sure we will go further with this. The other couple lost "the battle" as our offer was bigger, so now the bank is only dealing with our offer. So even if we offered 6k more than the asking price i would asume the bank can come back and refuse our offer? AS that price is set by the owner -who wants to get rid of the house so he doesn't fall into foreclosure. Am i correct?

YEs, a short sale still has owners, and they already signed that they agreed on with our offer etc, but now we are waiting for the bank to accept it...and we are good to go. It just takes soooo long, the suspense is killing us! We would be lucky lucky lucky to get his home. 6 years ago someone bought it for 300k now we are hopefully getting it for 175+closing 5k so 180k but still super cheap. The house has every upgrade you could possible imagine...real stone around the fireplace, pillars in the kitcken and sitting room(bedroom), 5 bedrooms, 2 huge living rooms, what more can one want???it's a dream...and i hope we get it!!!

wish me luck! i will let you know how it goes, we should hear back from the bank this week.

Ok, so you didn't put an offer in to the bank, the listing agent submitted an executed contract. Big difference.

The bank can't 'refuse your offer' but they can reject the price. I know that's splitting hairs, but there is a difference.

Sounds lovely...wll be crossing my fingers for you.

[silvana.toma 15]

Ok, so you didn't put an offer in to the bank, the listing agent submitted an executed contract. Big difference.

The bank can't 'refuse your offer' but they can reject the price. I know that's splitting hairs, but there is a difference.

Sounds lovely...wll be crossing my fingers for you.

Yes you are right...they can refuse the price...i bet that is one of the problems with short sales...the pricees are very low...as the seller is trying to get rid of it, but the banks are having a hard time accepting such low prices. Some of the short sales are very unrealistical, the one we are trying to get i know it's a real price because we lookd at other homes in the area and they about the same price...so we are not shooting unrealistical targets here...thank god!

but tx for telling me about the fact that the bank can not take any other contract while dealing with ours...we didn;t know that and we were hoping no one is going to put another contract or offer in...that's awsome to know! TX!!

[Moosker 7]

We just purchased a home in the MD/DC/VA area. It is pricey, but the farther off of the beltway/95 you go, the cheaper the prices of homes are.

Some tips that we learned along the way....

- check your credit score! If it's so-so, then do your best to fix it

- get pre-approved for a mortgage (just an fyi, we were told Bank of American yanks you with a TON of fees)

- find a good real estate agent. Shop around if you want. Also, real estate agents make their money typically on selling a home for a family, not buying a home. Our real estate fees were really not much at all.

- have a decent down payment

- look into FHA as a first-time homebuyer

Also, www.redfin.com like Krikit mentioned is a great site. That's how we found our house! Good luck!

[ThomKimQC 14]

My experience actually went very smoothly thanks to my realtor. The hard part was finding a home in good enough move in ready shape.

[silvana.toma 15]

So today is the third week since we put the contract in, and our realtor said it should take 3 weeks to hear back....but we haven't heard anything yet.

I know beeing a short sale it can take forever...and to tell you the truth you can get amazing deals but also short sales take the fun out of buying a house. The wait makes all the excitment go away.

We were planning to negoicate some more in case they don;t want to pay closing costs, but it takes so long to hear back from them that we will pay closing and anything they ask just to get the house.

In may our rent lease expires so we are trying to work around that time line, and i know that a short sale can take months...

Do you think if they come back and accept our offer...from that point on can still take more than 60 days?

[juliava 80]

We just purchased a home in the MD/DC/VA area. It is pricey, but the farther off of the beltway/95 you go, the cheaper the prices of homes are.

Some tips that we learned along the way....

- check your credit score! If it's so-so, then do your best to fix it

- get pre-approved for a mortgage (just an fyi, we were told Bank of American yanks you with a TON of fees)

- find a good real estate agent. Shop around if you want. Also, real estate agents make their money typically on selling a home for a family, not buying a home. Our real estate fees were really not much at all.

- have a decent down payment

- look into FHA as a first-time homebuyer

Also, www.redfin.com like Krikit mentioned is a great site. That's how we found our house! Good luck!

I agree with all the above. However, we got our home at a very, very good price back in 2009 right behind the Washington National Harbor, about 3 minutes drive to I-485, 10 mintes away from Old Town Alexandria. The houses were pretty cheap at that time but the investors were buying them like fresh warm bread so we went through a pretty aggressive buying process.

Prices might still be good around the National Harbor for anyone who lives in the area. If they went up, good for us!

FHA loan and the $8000 first time home buyer incentive were a bless in the sky, but when we moved to NJ and rented our MD home out through a property management company the IRS sent us the letter saying that they need their money back. Yes, that $8000 will have to be refunded if your home is not your primary residence anymore.

[Krikit 1,163]

Do you think if they come back and accept our offer...from that point on can still take more than 60 days?

Once they accept your offer the timeline will depend on how fast you and your lender can put your loan together in order to finalize the sale.

[silvana.toma 15]

I agree with all the above. However, we got our home at a very, very good price back in 2009 right behind the Washington National Harbor, about 3 minutes drive to I-485, 10 mintes away from Old Town Alexandria. The houses were pretty cheap at that time but the investors were buying them like fresh warm bread so we went through a pretty aggressive buying process.

Prices might still be good around the National Harbor for anyone who lives in the area. If they went up, good for us!

FHA loan and the $8000 first time home buyer incentive were a bless in the sky, but when we moved to NJ and rented our MD home out through a property management company the IRS sent us the letter saying that they need their money back. Yes, that $8000 will have to be refunded if your home is not your primary residence anymore.

That sucks..that they are asking the money back!And i bet you guys didn't know about it untill now. I hate the fact that everything is so complicated. To tell you the truth it took us a while to understand all this buying process...they have so many "terms"that if you are not in the bussines you don't know what they mean. Then you can only ask but so many questions before people think you are retarded...

So do you have to give the money back cash in one lump sum? or you can make payments?

[silvana.toma 15]

Once they accept your offer the timeline will depend on how fast you and your lender can put your loan together in order to finalize the sale.

We already started the loan process a week ago with our mtg officer(he sent our paperwork to the underwritter), he wants to get us the loan first, so there are no hiccups on the way that will slow us down even more than it's necesarry. Because worst case scenario..if we don;t get this home we will get another one, and he said it's better to know you are aproved.

[juliava 80]

That sucks..that they are asking the money back!And i bet you guys didn't know about it untill now. I hate the fact that everything is so complicated. To tell you the truth it took us a while to understand all this buying process...they have so many "terms"that if you are not in the bussines you don't know what they mean. Then you can only ask but so many questions before people think you are retarded...

So do you have to give the money back cash in one lump sum? or you can make payments?

We will find out very soon, when we file our 2010 taxes but I am sure we will do a payment plan. We actually knew about it, but who the hell knew at that time that we will relocate? Oh well.

So if you do the FHA loan with the $8000 first time home buyer incentive make sure you stay in that house for 3 years, otherwise IRS will send you the same love letter.

[silvana.toma 15]

We will find out very soon, when we file our 2010 taxes but I am sure we will do a payment plan. We actually knew about it, but who the hell knew at that time that we will relocate? Oh well.

So if you do the FHA loan with the $8000 first time home buyer incentive make sure you stay in that house for 3 years, otherwise IRS will send you the same love letter.

doesn't make any sense to me why they would want the money back...some people are forced to move with their new job...but are not willing to give up their home yet...

Also with closing costs... it's ridiculos the money they are asking and the bureaucracy behind it...it's almost like ..everyone needs to make some money so let's create more bureaucracy this way everyone gets their fair share.

In Romania it's so bad it took my aunt 2 years to get the papers in order for her to build her home(with her money, no credit from the bank)

Actually the 8k for first time homebuyers was only available for people buying homes in 2009.

We are trying to get the agricultural loan VHDA?...that is 102% loan. So if we get that they will also be paying the closing costs.

I believe these days the more money you have in your savings account the better.

I bet those people who put 20% down payment and lost their jobs and went into forclosure are kicking themselves for not having that money in their bank accounts...

I think a lot of people need to learn that when they have money saved up they don';t need to spend it right away on vacations and clothes, and down payments etc... There is nothing safer than money in your pocket...

So my advice for anyone looking to buy a home is:

1. keep your money in your pocket because you never know when you will need it.

2. Try to save up so you can pay your house off faster