Submitting an Offer on A Short Sale Home

Just like a regular real estate transaction, if you want to purchase a home that is being sold as a short sale, your first step is to write an offer and submit it to the seller.

Questions to ask your agent before submitting a short sale offer:

  • How experienced is the selling agent with short sales?

Getting a short sale to close takes a lot of time and hard work. Experienced agents know the process, usually have good communication with the asset managers, and can give you an idea on the amount of time it will take to close.

In-experienced short sale agents may be in over their heads and getting the short sale to close becomes more difficult. In this situation, you may want to talk to your agent and to see if they are familiar with the listing agent. If they feel they can get it done, you may want to move forward anyways.

  • What liens are there on the property?

If the property has multiple liens against it, getting the short sale approved can be difficult at best. More then likely, a property with multiple liens will take an extended amount of time to get to close, if it even closes at all.

To find a lien on a property, you can check with your local courthouse or ask a title company to do a preliminary title report.  Ask your agent to help you with this task or call a title company in your area.

  • Are there any other offers?

Ask the agent if there are any other offers you will be competing with. Most agents won’t tell you what the offer amount is, but knowing how many offers are on the property will give you a better understanding of where you need to write yours at.

  • Has a price already been approved by the loan servicer?

If you get lucky, the short sale may already have a price the bank has approved. This scenario happens when a buyer has already submitted an offer, has gone through the approval process, but walked away before closing for one reason or another.

If the bank already has an approved price point, it can shorten the process depending on how long ago the price was approved. If it’s been awhile the bank may require you to go through the approval process again.

If all these scenarios check out in your favor, it may be a good idea to submit your offer. First, your offer has to be approved by the seller. If the seller agrees to the terms of your offer, they will then submit it to the bank for approval. Next is the approval process from the bank.

Short Sale Process: Approval Time Frame

Since getting an offer approved for a short sale is a process that requires a third party approval. It’s going to take longer then a normal real estate transaction. Here are some common questions many short sale buyers have:

  • How long will the lender take to approve my short sale?

This really depends on a lot of factors. Number one is who is the servicer? For example, Bank of America is one of the worst, and it can take sometimes upto 4 months to get an approval. Wells Fargo on the other hand is a lot more organized and usually can get an approval within 30-45 days after submitting the offer.

The time frame also depends on if the bank has already approved a price. If the bank has already approved a price point, then you know where to write your offer and you can skip the counter offer process.  If they haven’t approved a price they will usually order an appraisal or a BPO (broker price opinion) to be done on the property which takes more time.

  • What is the average time frame from start to finish buying a short sale?

Average is usually 3-4 months depending on your qualifications as a buyer. If you have cash, once the approval from the bank is completed, you can close in a couple of weeks. If you have to get financing, depending on the type of financing you’re getting, the time frame from bank approval will be an extra 30-60 days.  The longest amount of time I have seen it take to get a short sale done was 8 months while the shortest was 35 days on a cash offer.

  • Do I still have time for my  due-diligence timelines and financing?

Yes. Once you have approval from the bank, they usually give you a certain amount of time to do your due-diligence. You get plenty of time to do your inspections to determine if you still want to buy the home.

If your inspection shows there are problems with the home you might just have to walk away. Most short sales are sold as-is.  If the problems are bad enough sometimes you can re-negotiate with the bank. They may reduce the price in order to compensate for repairs.

The bank will give you time to get your financing completed, but if you go over your deadline, you can still ask the bank for an extension. Most the time financing deadlines can be extended if you run into any problems, just talk to the listing agent and ask for an extension.

During the short sale approval process, many buyers get anxious and decide to pull out. Sometimes you just find a better home and decide you want to write an offer on that home. Other times a buyer will have no other reason then cold feet. You can withdraw a short sale offer for a number of reasons:

Short Sale Process: Withdrawing An Offer

You can walk away at anytime up until the bank accepts your offer.  Once they accept your offer you can still walk away based on your financing deadline and your due-diligence period.

  • How do you withdraw an offer on a short sale?

To withdraw, just contact your agent, and tell them you want to withdraw. It’s that simple. They will notify the selling agent that your offer is no longer on the table and that’s it.

  • What are the possible consequences of withdrawing a short sale offer?

Really, the only consequence you will face is lost time. When you submit an offer on a short sale, you can ask your agent to put in the contract you will submit earnest money at the time the bank approves your offer. Once you submit your earnest money, you still have your financing and due-diligence deadlines to withdraw before you lose your earnest money deposit.

Once your due-diligence and financing deadlines are over, that’s when you can lose your earnest money deposit. If you withdraw after those time periods, you automatically forfeit your earnest money. It’s up to you to decide if it’s worth it to lose your earnest money. If you really don’t want to buy the home, losing a $1000 in earnest money might be better then living in a home you hate

To search all distressed homes in Orange County please visit

Payback time for homebuyer tax credit

There’s a lot of confusion surrounding the housing tax credits for first-time buyers. Here are some answers.

By Walter Updegrave, Money Magazine senior editor

NEW YORK (Money) — Question: I bought a home and qualified for the $8,000 first-time homebuyer tax credit. I’m still a bit confused, though, about the payback rules. Can you explain them? –Jessica G., Houston, Texas

Answer: Sure. But first I’d like to remind anyone who’s considering taking advantage of the first-time homebuyer tax credit of up to $8,000 that was part of this year’s stimulus package that time is running out.

Specifically, unless Congress extends the deadline — which I certainly wouldn’t count on — you must complete the purchase of the home by November 30th. That may sound like a good ways off. But when you consider that it can easily take two months to get through the entire home-buying process — find a house, make an accepted offer, pull together the money and documentation you’ll need for a mortgage, appraisal, title insurance and closing — anyone who hasn’t already begun will have to move quickly to squeeze under the November 30th wire.

That deadline aside, there are a few other criteria you’ll also have to meet before you can snag the tax credit.

To begin with, the home you’re buying must be your principal residence. And while $8,000 is the figure usually thrown around when talking about the credit, it’s actually equal to 10% of the purchase up to a maximum of $8,000.

You’ve also got to qualify as a first-time homebuyer. Clearly, you meet that hurdle if you or your spouse has never owned a home before. But you may still be eligible even if you’re not buying a home for the first time. Why? Because for the purposes of this program, you’re also considered a first-time buyer as long as you or your spouse hasn’t owned a principal residence within three years. Notice I said principal residence. Owning a vacation home or rental property doesn’t disqualify you.

Then there are the income eligibility rules. To get the full credit, your modified adjusted gross income can’t exceed $75,000 if you’re single or $150,000 if you’re married. You can claim a partial credit, however, as long as your income doesn’t exceed $95,000 if you’re single or $170,000 if you’re married.

Now, let’s get back to your query about payback rules. If you indeed qualified for the $8,000 first-time homebuyer credit for homes bought from January 1 through November 30, 2009, then you don’t have to worry about paying it back, provided you continue using the house as your principal residence for at least 36 months after buying. Sell it or stop using it as your principal residence within 36 months, however, and you’ll have to repay the entire amount of the credit as additional tax when you file your next tax return (although there are a few exceptions).

But the fact that you’re concerned about paying it back makes me wonder whether you have actually taken a different first-time homebuyer tax credit.

Before passing the $8,000 credit in the stimulus package this year, Congress had already enacted a $7,500 first-time homebuyer credit last year as part of the Housing and Economic Recovery Act of 2008. This $7,500 credit, which was designed to apply to houses bought by qualifying first-time buyers between April 9, 2008 and July 1, 2009, is actually an interest-free loan that must be repaid.

So if that’s the credit you actually got, then you must pay it back over 15 years through an additional tax starting with your 2010 tax return (although here too there are exceptions).

So the first thing you need to do is find out which tax credit you actually received. If you bought your house in 2008, then you got the $7,500 tax credit, and you will have to repay it. Sorry, but you can’t get the $8,000 credit if you bought in 2008.

You could, however, be part of what is likely a small group of first timers who bought their home early in 2009 before Congress enacted the $8,000 credit and who took the $7,500 credit. Someone might have done that because he filed his 2008 taxes before the $8,000 became available in 2009 or because he just didn’t know about the larger credit or perhaps just mistakenly believed that once he filed for the smaller credit he no longer could get the larger one.

But if you, or any other qualifying first-time buyer, bought a home in 2009 and received the $7,500 credit instead of the $8,000 one for whatever reason, you’re not stuck with the smaller amount. You can file an amended return for 2008, claim the $8,000 credit and get the extra $500.

That’s right, even though the $8,000 credit applies to a 2009 purchase, the IRS actually allows you to claim it on your 2008 taxes. Which, by the way, is also an important point for any first-timer who already bought this year or plans to buy before the Nov. 30 deadline to keep in mind. Once you complete the purchase, you don’t have to wait until you file your 2009 taxes next year to get your $8,000 credit. You can get it sooner by filing an amended 2008 return.

So to sum up, whether or not you’ll have to repay the credit depends on which credit you got and how long you live in the home.

As for anyone else who needs a house, has the financial wherewithal to buy one and is thinking about taking advantage of the $8,000 first-time homebuyer credit as a way to get it, you’d better get a move on.

Yorba Linda takes big step by beating Tustin

  October 07, 2011 11:05 PM


TUSTIN – The storylines pulsated as Yorba Linda and Tustin took their tight, Empire League game deep into the fourth quarter Friday.

Yorba Linda, with its first senior class, would collect a breakthrough victory or traditional Orange County power Tustin would rally from a two-touchdown deficit.

The Mustangs emerged with the triumph, stopping the Tillers’ final two possessions to seal a 14-12 victory at Tustin.

The Mustangs (6-0, 2-0) forced Tustin (3-3, 1-1) to turn the ball over on downs with 3:19 left in the fourth and then ran out the clock before celebrating the victory over the defending league champion and the No. 3-ranked team in the CIF-Southwest Division.

Last season, Tustin defeated Yorba Linda, 42-7.

“We’re on the (football) map somewhere — (the school) is on Bastanchury and Fairmont,” Yorba Linda coach Jeff Bailey said. “Hopefully (people) know where we’re at now.”Yorba Linda took a 14-0 lead in the first quarter and then turned to its defense to secure the victory. On the strength on a five-man defensive front, the Mustangs held Tustin to 133 yards of offense (123 on the ground).

Tustin started its final drive at its 24 with 7:28 left in the fourth. Trailing 14-12, the Tillers faced a fourth-and-6 from their 38, but Lorenzo Ruiz broke up a lofty pass by up-ending a leaping Malik Shakur with 3:19 left.

Yorba Linda used a 3-yard run by Dallis Ellis to convert a fourth-and-inches play from the Tustin 30 for the knockout blow with about two minutes left.

“We worked really hard to prepare for this game,” said Ruiz, who also made a key fumble recovery in the first quarter. “We’re just really happy that we pulled through and won this.”

Yorba Linda took advantage of three Tustin miscues in the first quarter to open its 14-0 lead.

Tustin forced a punt on Yorba Linda’s opening possession but Ruiz recovered a fumble on the play at the Tillers’ 15. Three plays later, quarterback Alex Bernstein threw a 10-yard touchdown to Shad Pace on a short slant with 8:56 left in the opening quarter.

Tustin’s defense also appeared to force a punt on Yorba Linda’s second possession. After fumbling the previous punt, the Tillers didn’t send a return man back to field the kick but they had another challenge. Tustin was flagged for a personal foul on the punt from the Yorba Linda 44.

The penalty extended the Mustangs’ drive and Yorba Linda moved to the Tustin 13 where it faced fourth-and-1. Yorba Linda drew the Tillers’ offside for the first down. Two plays later, Pace caught a 6-yard touchdown pass from Bernstein. On this route, Pace first broke in before darting to the side of the end zone for the score.

The extra point by Matt Barr gave Yorba Linda a 14-0 lead with 1:06 left in the first quarter.

Tustin responded with one of its signature scoring drives. The Tillers marched 84 yards on 18 plays to trim the Mustangs’ lead to 14-6. Christopher Quintero capped a drive that lasted almost 10 minutes with a 2-yard run. The extra point failed with 3:21 left in the half.

Tustin drew closer in the third quarter after Edward Tandy made a leaping interception near his 38 and returned the ball to the Yorba Linda 32. Tandy later scored on a 2-yard run with 5:11 left in the third and then narrowly missed the end zone on the 2-point conversion run.

Tustin kept the pressure on by recovering the ensuing, low kickoff at the 50. But the Mustangs stopped Tustin on a fourth-and-1 with 1:56 left in the third. Tustin fumbled on the play but didn’t lose the ball.

Yorba Linda received strong defensive line play from ends Austin Thomas and Daniel Deedrick and interior linemen Ellis, Brandon Stewart and nose guard Sean Kanne.

Tustin’s longest run from scrimmage was nine yards. All-County running back Tyler Siudzinski finished with 32 yards on 15 carries.

The Mustangs were especially tough against Tustin’s inside runs.

“We didn’t give up the big play – that’s the key,” Bailey said.

Yorba Linda plays host to an improved Western next Friday.

“I know that this team is going to do great things,” Bernstein said. “Our leadership is there. We have the potential .. and it showed tonight.”

Tustin coach Myron Miller had high praise for Yorba Linda before the game.

“They’re good now but they’re going to be a great program,” Miller said.

Tustin’s defense also played well. The Tillers held the Mustangs to 150 yards of offense.

Tustin played without four starters because of injuries.

First-Time Buyers Losing Interest in Short Sales

Processing delays have taken their toll on first-time home buyer interest in short sales, which now account for more than one of every six house sales, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

First-time home buyer purchases of short sales dropped to 39.7 percent of short sale transactions in August. That represented a three-month slide and was the lowest level for first-time home buyers ever recorded by the HousingPulse survey.

The first-time home buyer share of short sales hit a peak of 54.1 percent of all short sale transactions in November 2009, just before the originally-scheduled expiration of the federal homebuyer tax credit.

Short sale transactions have long been problematic for buyers and sellers alike, with typical approval times of several months after a homebuyer first submits an offer. Factors slowing down short sale approvals include lost paperwork, coordination with multiple investors, slow appraisals, and mortgage servicer understaffing.

Still, for many first-time home buyers, average short sale prices of 27 percent lower than non-distressed properties compensated for the wait time. But with average time-on-market for short sales stalled at 16.6 weeks—with the majority of that time spent waiting for short sale approval—short sale transactions are becoming less popular with first-time home buyers.

Short sales are just one type of distressed property, with damaged REO and move-in ready REO also being significant components of today’s housing market. In August 2011, short sales accounted for 17.1 percent of the home purchase market, with damaged REO and move-in ready REO accounting for 13.2 percent and 15.6 percent, respectively.

The total proportion of distressed property, as represented by the HousingPulse Distressed Property Index (DPI), fell to 45.9 percent in August from 46.2 percent in June.

Real estate agents responding to the August survey indicated that home buyers frustrated with short sale delays are resorting to placing offers on multiple properties, with the intention on closing on only one. This practice can bog down the short sale approval process at mortgage servicers.

The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey involves approximately 2,500 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.

To search for all short sales & foreclosures please visit


FHA Mortgage Rates Drop for 5th Straight Month

The average interest rate on mortgages sold to the government-sponsored enterprises in August averaged 4.56%, a drop of 1 basis point from the previous month, according to the Federal Housing Finance Agency.

It’s the fifth straight month of declines since the rate to reached 4.84% in March. On Oct. 3, the Federal Reservewill begin purchasing up to $400 billion in longer-term Treasurys and new agency mortgage-backed securities as part of an effort to keep borrowing costs low.

According to Frank Nothaft, chief economist at Freddie Mac, the Fed’s previous policies have already pushedinterest rates to the lowest level since the early 1950s.

Any additional drop would accelerate already declining rates, according to FHFA data.

In August, the 30-year fixed-rate mortgage averaged 4.63%, down 6 bps from the prior month. On all fixed- and adjustable-rate mortgages sold to the GSEs, the average rate was 4.52%, down 3 bps from July.

Roughly 30% of the purchase mortgages were “no-point” loans, the same share as the prior three months. The average term on these loans also declined more than six months to 27.6 years in August.

The average loan-to-value ratio was 77.2%, up more than one percentage point, and the average loan amount increased slightly to $214,300 in August.