Profile picture for user6935872

We want to by a short sale home but the seller has an 80-20 loan on the home, is this real bad? Will

  • August 22 2013 - US
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Profile picture for edboner

It depends.  I sold a home with an equity line earlier in the year.  The equity line was "charged off" or purchased by another lender for the writeoff.  The entire process took nearly 12 months and probably doubled my grey hair.  Yes, two loans are more difficult, but if they are with the same lender, not as big a deal.  I closed another a few years ago with first and second at the same place.   We closed about 8 weeks after contract, started with no approved number and ended with a full release on both first and second for the seller.  As I remember, the sale was around $250,000 below the mortgage payoff. 

Find out if the loans are with the same lender and discuss with your SPOC.  Do you have an approved number?  Has the lender ordered an appraisal or BPO? 

Prices are on the way up in most parts of the country.  Consider the time involved and incentive a lender has or does not have as prices increase.   IMHO, lenders will be less likely to close on short sales as time goes by...or less likely to be agreeable as time passes.  BPO's and increasing sales prices change the number lenders will accept each day. 

  • August 23 2013
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No it is not bad.

Short sales can be quick or slow. It really depends on your Agents, Banks and Lawyers. All the communication happens between these groups.

In my experience the Banks and Lawyers take time to respond Agents phone calls and emails. 

So hang in their and keep in mind your Agent is the only one working for you.
  • August 23 2013
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Profile picture for nwhome.us
The listing price and the tax assessment have nothing to do with what the lenders will take for the property.

Yes 2 loans causes major delays because the second lien has to be negotiated also.

Unless you have the cash to buy the home an auction would cost you, additionally, something between 15 & 20% and you would be getting a Bargain and Sale Deed with no warrantee that there aren't outstanding liens.
  • August 23 2013
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Profile picture for user6935872
Yes there are 2 loans on the property, we just wondered if this would cause major delays but now they want to put the home on an online auction so now we have other issues. The sellers agent listed the home for $150,000 which is the same estimated value on the county auditors website.
  • August 23 2013
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Profile picture for nwhome.us
Are you saying that there are 2 loans on the property? 

Who are they to?

Who is negotiating for the seller with the lenders?

How long has the property been on the market?

What are the values in the neighborhood doing?
  • August 23 2013
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