Buying again, 2 years after Short Sale – questions for you pros

[SellingMyHome]

Hey all,

I was here about 2 years ago with questions about selling via short sale. I used Battiata (solely for his short sale experience), and successfully sold our house without paying any money to the banks, and getting them to agree to put on our credit the “Account legally paid for less than full balance”.

It has been 18 months now. Credit dipped to low 600’s, and is now above 700. We only had one 30 day late payment show on our credit. Otherwise we are stellar now.

What are banks doing now for former short sellers that want to buy? Do any of you have experience seeing us short sellers getting back into the market? What are you seeing with FHA and down payment requirements?

Thanks again to all of you for your help!

For others here that are thinking of short selling, feel free to ask questions about my short sale experience…

[Anonymous]

Is this a joke?

[SellingMyHome]

[quote=dirthead451]Is this a joke?[/quote]

Why do you say that?

[SD Realtor]

Interesting post. Sellingmyhome I would presume that some posters would shake their heads at you because of your previous experience of short selling a home. That is, if you have already been burned by the housing market why in the world would you go right back into a market that some feel is poised to drop again. Additionally some people may view someone like you as part of the problem, that is people who bought in a deteriorating market when they should have never bought in the first place.

I think that in a potentially unfair portrayal because none of us here know the facts and each individual has an unique experience. However, I would argue that previous homeowners like yourself, who did indeed deal with the problem within the parameters of what was available to you, did the best you could. That is, you went and sold the home short. You worked with the lender, you did not take some stupid loan mod, it appears from your post that you minimized the toll on your credit report, you did not freeload and stay in the home and let it default. I don’t want to sit here and sound like I am commending you but I do think you handled your previous situation well.

I also think it is unrealistic to think that people who default or short sell should never be able to purchase a home again. Furthermore I am not so sure it is realistic to put a moratorium or an “X” year waiting period on former short sellers or defaulters. With that said, if I WERE A LENDER whould I put a higher premium on a former short seller or defaulters loan? Yes I probably would…However that is the lenders decision and not my decision.

What is more important is your own analysis of what makes you think that if you buy again, you will not have to short sell again? What is different this time? Are you maiking more money? Is there an element of stability that you have now that you did not have when you bought the first time? In order to qualify your purchase this time around you need to come up with a very convincing argument why this will not happen this time around. Are the rent vs own numbers alot different now?

[AK]

Battiata actually sold one?

[SellingMyHome]

Ahhh, I forgot that by admitting to a short sale, I was showing myself to some posters as an idiot. Sorry for forgetting that!

I bought in 2003 (halfway up the price rises), and thought it was going to be a starter home, one to live in for a few years, and then upgrade when we had kids. Well, the kids came along, but the market crashed. For several reasons, we decided to get rid of the house. It was a strategic move on our part, as there was no way the house was going to sell for a profit in the next 10-15 years.

So, now we are capable of buying again. To me it looks like the market is about near its lowest, maybe another year or so more still. I don’t mind renting a house, actually like not worrying about fixing things. BUT, my wife likes the idea of owning, and in the end, so do I.

So, my question to the pros here (even the jerks with opinions most don’t like to hear), is: Are short-sellers getting back in the market, and what are some of their experiences?

[sdrealtor]

It sounds like you did a strategic default which will likely make gettting a loan harder. If you had a legitimate hardship that can be documented you would have an easier time getting a loan.

[sdrealtor]

[quote=AK]Battiata actually sold one?[/quote]

LOL, he actually does about 30% of the time

[DataAgent]

[quote=sdrealtor][quote=AK]Battiata actually sold one?[/quote]

LOL, he actually does about 30% of the time[/quote]

About the same batting average as Albert Pujols.

[Coronita]

[quote=SD Realtor]Interesting post. Sellingmyhome I would presume that some posters would shake their heads at you because of your previous experience of short selling a home. That is, if you have already been burned by the housing market why in the world would you go right back into a market that some feel is poised to drop again. Additionally some people may view someone like you as part of the problem, that is people who bought in a deteriorating market when they should have never bought in the first place.

I think that in a potentially unfair portrayal because none of us here know the facts and each individual has an unique experience. However, I would argue that previous homeowners like yourself, who did indeed deal with the problem within the parameters of what was available to you, did the best you could. That is, you went and sold the home short. You worked with the lender, you did not take some stupid loan mod, it appears from your post that you minimized the toll on your credit report, you did not freeload and stay in the home and let it default. I don’t want to sit here and sound like I am commending you but I do think you handled your previous situation well.

I also think it is unrealistic to think that people who default or short sell should never be able to purchase a home again. Furthermore I am not so sure it is realistic to put a moratorium or an “X” year waiting period on former short sellers or defaulters. With that said, if I WERE A LENDER whould I put a higher premium on a former short seller or defaulters loan? Yes I probably would…However that is the lenders decision and not my decision.

What is more important is your own analysis of what makes you think that if you buy again, you will not have to short sell again? What is different this time? Are you maiking more money? Is there an element of stability that you have now that you did not have when you bought the first time? In order to qualify your purchase this time around you need to come up with a very convincing argument why this will not happen this time around. Are the rent vs own numbers alot different now?[/quote]

I wonder, if the OP, if he is(they are) well documented w2 wage earners, would find an easier time getting a loan…

The OP…

or

Some folks who are in good credit standing, never been late on a payment but nevertheless are not w2 wage earners.

Something to think about….

[ctr70]

Actually it is very easy to get a loan after a short sale or foreclosure and a lot of people are jumping back into the market at these low prices and low rates. It turns out the smarter people are the ones who got out of their upside down property EARLIER in the crash (vs. later), and now they are already back in the market approved to for a a loan to buy. I have a friend in the Bay Area who already bought again at a killer price with a 4% rate after walking away from his massively upside down property in late 2008.

Here are the wait times:

*short sale*
-2 yrs VA
-2 yrs conventional (with 20% down, 4 yrs with 10% down)
-3 yrs FHA

*foreclosure*
-2 yrs VA
-3 yrs FHA
-7 yrs conventional

[Anonymous]

People that handle their financial affairs such as you, are what is wrong with our economy.

It should be a minimum of 10 years before someone that can’t back their financial commitments, such as yourself, is allowed to buy another house.

[Anonymous]

You are an idiot in my eyes. You think it’s acceptable to let someone else take the fall for your poor financial sense? You are an idiot and a scumbag.

[eavesdropper]

[quote=SellingMyHome]…I bought in 2003 (halfway up the price rises), and thought it was going to be a starter home, one to live in for a few years, and then upgrade when we had kids. Well, the kids came along, but the market crashed. For several reasons, we decided to get rid of the house. It was a strategic move on our part, as there was no way the house was going to sell for a profit in the next 10-15 years.

So, now we are capable of buying again. To me it looks like the market is about near its lowest, maybe another year or so more still. I don’t mind renting a house, actually like not worrying about fixing things. BUT, my wife likes the idea of owning, and in the end, so do I.[/quote]

I won’t comment on whether you should or shouldn’t. I may have an opinion, but I’ll assume that my opinion is irrelevant to your decision.

However, I did notice that you cited your inability to sell the house at a profit in the next 10-15 years was the trigger for your self-described strategic default.

If that is, indeed, the case, I’d say that you probably shouldn’t get back into home ownership until there is clear-cut evidence of a sustainable housing recovery. You stated, “To me it looks like the market is about near its lowest, maybe another year or so more still.” I’m curious to know why it is that you feel that way; have you identified any economic indicators that would influence your thinking in that direction? I’m not being smartass here – I really do want to know.

Also, WHY do you and your wife “like the idea of owning”? I understand the whole “wanting my own roof over my head” thing, but there is a genuine risk involved with a transaction like this. If you are troubled enough by the changes in the housing values that you proactively sell a house to avoid the fallout, it would appear that this is something to consider before jumping back in the pool.

A belief that you would be unable to sell for a profit in a decade is what caused you to take a very risky financial step a couple years back (the short sale decision), and that’s not exactly compatible with the whole American Dream thing. Essentially, what I’m saying is that you have to decide what’s important: home ownership or profit (and, what’s more, how much profit). Otherwise, you may well come up against the same issues in a couple years if the market isn’t showing signs of recovery, or not recovering at a pace with which you feel comfortable.

I’m not saying that you shouldn’t be prudent in this decision. Of course, investing money wisely is always a good and important thing. But if you are unable to deal with the economic vagaries of the real estate market (i.e., your overwhelming concern about selling for a profit in 10-15 years was what caused you to short-sell, not financial hardship), housing may not be the place for you to sink a very significant portion of your money.

Best of luck in coming to a decision.

[scaredyclassic]

We shouldn’t call each other idiots or scumbargs as most people are just doing the best they can and aren’t idiots and svcumbags. Occasionally you will meet a true idiot, or scumbag, but they will be rare.

But query; are the attributes idiot and scumbag largely mutually exclusive. I mean, if your just stupid, doesn’t that cut against the maliciousness of the scumbag?

I am speaking abstractly unrelated to the posters.

[Author]

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