Chances of buying an REO or short-sale without 20% down?

[Eugene]

[quote=Scarlett]
In short sales succes stories with <20% down, what was crucial factor for success? For example, the speed at visiting the property after it hit the MLS & making a decision & offer - how long was that? Other factors (beside the pre-approval with a serious lender)?[/quote]

I don't think that success with short sales depends at all on the amount you put down.

If you want to get a short sale, you need to make an offer that is low enough for you to like and high enough for the bank to approve, and you need to stick around long enough for your offer to make it through the system.

[urbanrealtor]

[quote=Scarlett]

Aha, I was wondering how many are in my situation…I knew some of my friends were…
Thanks, Urbanrealtor! I may contact you in the future.

In short sales succes stories with <20% down, what was crucial factor for success? For example, the speed at visiting the property after it hit the MLS & making a decision & offer - how long was that? Other factors (beside the pre-approval with a serious lender)?

[/quote]

I would keep an agent on retainer who knows your desires (as far as area and price and features). I would then do much of the work yourself. Check sdlookup daily and let the agent do work as well.

Responding quickly to cheap reos and shorts is important. Often I go to write up an offer on a compelling situation only to find it has gone pending in the last hour.

If the numbers make sense (and you should know your numbers before acquiring your target) pull the trigger that day. Sometimes the reo agents will put up road blocks (eg a preferred lender prequal, absurd addenda with offer) but a good agent will know how to deal with those.

Also, short sales require lots of patience. The seller's bank can take months after seller acceptance to give approval. Some clients make offers on short sales and keep looking. Since shorts generally don't require a deposit for acceptance, it does not automatically tie the buyer's hands for the time spent negotiating with the seller's lender. The buyer can still look around.

Again, I think the biggest disability of sub 20 buyers is the inability to structure a cash-heavy lowball. You simply don't have the ability to make funding a sure thing every time.

[urbanrealtor]

[quote=Scarlett]

Aha, I was wondering how many are in my situation…I knew some of my friends were…
Thanks, Urbanrealtor! I may contact you in the future.

In short sales succes stories with <20% down, what was crucial factor for success? For example, the speed at visiting the property after it hit the MLS & making a decision & offer - how long was that? Other factors (beside the pre-approval with a serious lender)?

[/quote]

I would keep an agent on retainer who knows your desires (as far as area and price and features). I would then do much of the work yourself. Check sdlookup daily and let the agent do work as well.

Responding quickly to cheap reos and shorts is important. Often I go to write up an offer on a compelling situation only to find it has gone pending in the last hour.

If the numbers make sense (and you should know your numbers before acquiring your target) pull the trigger that day. Sometimes the reo agents will put up road blocks (eg a preferred lender prequal, absurd addenda with offer) but a good agent will know how to deal with those.

Also, short sales require lots of patience. The seller's bank can take months after seller acceptance to give approval. Some clients make offers on short sales and keep looking. Since shorts generally don't require a deposit for acceptance, it does not automatically tie the buyer's hands for the time spent negotiating with the seller's lender. The buyer can still look around.

Again, I think the biggest disability of sub 20 buyers is the inability to structure a cash-heavy lowball. You simply don't have the ability to make funding a sure thing every time.

[urbanrealtor]

[quote=Scarlett]

Aha, I was wondering how many are in my situation…I knew some of my friends were…
Thanks, Urbanrealtor! I may contact you in the future.

In short sales succes stories with <20% down, what was crucial factor for success? For example, the speed at visiting the property after it hit the MLS & making a decision & offer - how long was that? Other factors (beside the pre-approval with a serious lender)?

[/quote]

I would keep an agent on retainer who knows your desires (as far as area and price and features). I would then do much of the work yourself. Check sdlookup daily and let the agent do work as well.

Responding quickly to cheap reos and shorts is important. Often I go to write up an offer on a compelling situation only to find it has gone pending in the last hour.

If the numbers make sense (and you should know your numbers before acquiring your target) pull the trigger that day. Sometimes the reo agents will put up road blocks (eg a preferred lender prequal, absurd addenda with offer) but a good agent will know how to deal with those.

Also, short sales require lots of patience. The seller's bank can take months after seller acceptance to give approval. Some clients make offers on short sales and keep looking. Since shorts generally don't require a deposit for acceptance, it does not automatically tie the buyer's hands for the time spent negotiating with the seller's lender. The buyer can still look around.

Again, I think the biggest disability of sub 20 buyers is the inability to structure a cash-heavy lowball. You simply don't have the ability to make funding a sure thing every time.

[urbanrealtor]

[quote=Scarlett]

Aha, I was wondering how many are in my situation…I knew some of my friends were…
Thanks, Urbanrealtor! I may contact you in the future.

In short sales succes stories with <20% down, what was crucial factor for success? For example, the speed at visiting the property after it hit the MLS & making a decision & offer - how long was that? Other factors (beside the pre-approval with a serious lender)?

[/quote]

I would keep an agent on retainer who knows your desires (as far as area and price and features). I would then do much of the work yourself. Check sdlookup daily and let the agent do work as well.

Responding quickly to cheap reos and shorts is important. Often I go to write up an offer on a compelling situation only to find it has gone pending in the last hour.

If the numbers make sense (and you should know your numbers before acquiring your target) pull the trigger that day. Sometimes the reo agents will put up road blocks (eg a preferred lender prequal, absurd addenda with offer) but a good agent will know how to deal with those.

Also, short sales require lots of patience. The seller's bank can take months after seller acceptance to give approval. Some clients make offers on short sales and keep looking. Since shorts generally don't require a deposit for acceptance, it does not automatically tie the buyer's hands for the time spent negotiating with the seller's lender. The buyer can still look around.

Again, I think the biggest disability of sub 20 buyers is the inability to structure a cash-heavy lowball. You simply don't have the ability to make funding a sure thing every time.

[urbanrealtor]

[quote=Scarlett]

Aha, I was wondering how many are in my situation…I knew some of my friends were…
Thanks, Urbanrealtor! I may contact you in the future.

In short sales succes stories with <20% down, what was crucial factor for success? For example, the speed at visiting the property after it hit the MLS & making a decision & offer - how long was that? Other factors (beside the pre-approval with a serious lender)?

[/quote]

I would keep an agent on retainer who knows your desires (as far as area and price and features). I would then do much of the work yourself. Check sdlookup daily and let the agent do work as well.

Responding quickly to cheap reos and shorts is important. Often I go to write up an offer on a compelling situation only to find it has gone pending in the last hour.

If the numbers make sense (and you should know your numbers before acquiring your target) pull the trigger that day. Sometimes the reo agents will put up road blocks (eg a preferred lender prequal, absurd addenda with offer) but a good agent will know how to deal with those.

Also, short sales require lots of patience. The seller's bank can take months after seller acceptance to give approval. Some clients make offers on short sales and keep looking. Since shorts generally don't require a deposit for acceptance, it does not automatically tie the buyer's hands for the time spent negotiating with the seller's lender. The buyer can still look around.

Again, I think the biggest disability of sub 20 buyers is the inability to structure a cash-heavy lowball. You simply don't have the ability to make funding a sure thing every time.

[Scarlett]

[quote=SD Realtor]My thoughts are that if your offer is the highest of all the offers out there then it does stand a good chance of being accepted, especially for an REO. I have an all cash buyer who has been outbid on a few homes already for REO properties in Eastlake by non all cash buyers. If the difference is only a few thousand then of course you are in peril. For shorts your position is weaker because when you submit your offer you may be the highest amount but while the processing is getting done another offer can come in at your bid amount and if they have less financing then they will more then likely get the nod. [/quote]

It seems that one may compensate for less downpayment by coming at above the asking price and hoping for the best.

How much higher you see the accepted offer, for REOs and short sales (percentage in regard to listing price)?

[quote=SD Realtor]
I agree with UR in that people are still out there buying with 10% down.

I am not sure I agree with that concept but it is indeed happening. Also you may not have to save another 10% to get to 20% down. Maybe you need to save 5% and housing prices drop another 5% and then you have made it. [/quote]
I don’t think it works quite that way, if you need to put 20% down… E.g. a house of 550K (my price range) – 20% down is 110K. With 10% drop in the price, 20% down is still close to 100K… which is still far from 82K (15%)… I actually need a drop of 27% in price for that 15% of the inital price 550K to become 20% of the actual price – it may or may not happen (I think it will).
Anyway, waiting for many years (>5) to save the 15-20% down will probably get me higher mortgage rates than todays with 10% down, and maybe even higher house prices (eventually, it could happen in the number of years it would take me to save the another 30K down payment – at least I’d be sure we have passed the bottom).

[quote=SD Realtor]I know with kids and a family it is hard to be patient especially if it means another year or two. [/quote]

That’s very true 🙂 But we will be patient at least another year, rather than doing something risky. We are renting in a place with ultra-short commute, in UTC, and if we buy a house (in PQ, CMR), it will definitely mean a significantly longer commute. So with that in mind, we find the patience to wait (we HATE commuting in the rush hours!).

Thanks!!!

[Scarlett]

[quote=SD Realtor]My thoughts are that if your offer is the highest of all the offers out there then it does stand a good chance of being accepted, especially for an REO. I have an all cash buyer who has been outbid on a few homes already for REO properties in Eastlake by non all cash buyers. If the difference is only a few thousand then of course you are in peril. For shorts your position is weaker because when you submit your offer you may be the highest amount but while the processing is getting done another offer can come in at your bid amount and if they have less financing then they will more then likely get the nod. [/quote]

It seems that one may compensate for less downpayment by coming at above the asking price and hoping for the best.

How much higher you see the accepted offer, for REOs and short sales (percentage in regard to listing price)?

[quote=SD Realtor]
I agree with UR in that people are still out there buying with 10% down.

I am not sure I agree with that concept but it is indeed happening. Also you may not have to save another 10% to get to 20% down. Maybe you need to save 5% and housing prices drop another 5% and then you have made it. [/quote]
I don’t think it works quite that way, if you need to put 20% down… E.g. a house of 550K (my price range) – 20% down is 110K. With 10% drop in the price, 20% down is still close to 100K… which is still far from 82K (15%)… I actually need a drop of 27% in price for that 15% of the inital price 550K to become 20% of the actual price – it may or may not happen (I think it will).
Anyway, waiting for many years (>5) to save the 15-20% down will probably get me higher mortgage rates than todays with 10% down, and maybe even higher house prices (eventually, it could happen in the number of years it would take me to save the another 30K down payment – at least I’d be sure we have passed the bottom).

[quote=SD Realtor]I know with kids and a family it is hard to be patient especially if it means another year or two. [/quote]

That’s very true 🙂 But we will be patient at least another year, rather than doing something risky. We are renting in a place with ultra-short commute, in UTC, and if we buy a house (in PQ, CMR), it will definitely mean a significantly longer commute. So with that in mind, we find the patience to wait (we HATE commuting in the rush hours!).

Thanks!!!

[Scarlett]

[quote=SD Realtor]My thoughts are that if your offer is the highest of all the offers out there then it does stand a good chance of being accepted, especially for an REO. I have an all cash buyer who has been outbid on a few homes already for REO properties in Eastlake by non all cash buyers. If the difference is only a few thousand then of course you are in peril. For shorts your position is weaker because when you submit your offer you may be the highest amount but while the processing is getting done another offer can come in at your bid amount and if they have less financing then they will more then likely get the nod. [/quote]

It seems that one may compensate for less downpayment by coming at above the asking price and hoping for the best.

How much higher you see the accepted offer, for REOs and short sales (percentage in regard to listing price)?

[quote=SD Realtor]
I agree with UR in that people are still out there buying with 10% down.

I am not sure I agree with that concept but it is indeed happening. Also you may not have to save another 10% to get to 20% down. Maybe you need to save 5% and housing prices drop another 5% and then you have made it. [/quote]
I don’t think it works quite that way, if you need to put 20% down… E.g. a house of 550K (my price range) – 20% down is 110K. With 10% drop in the price, 20% down is still close to 100K… which is still far from 82K (15%)… I actually need a drop of 27% in price for that 15% of the inital price 550K to become 20% of the actual price – it may or may not happen (I think it will).
Anyway, waiting for many years (>5) to save the 15-20% down will probably get me higher mortgage rates than todays with 10% down, and maybe even higher house prices (eventually, it could happen in the number of years it would take me to save the another 30K down payment – at least I’d be sure we have passed the bottom).

[quote=SD Realtor]I know with kids and a family it is hard to be patient especially if it means another year or two. [/quote]

That’s very true 🙂 But we will be patient at least another year, rather than doing something risky. We are renting in a place with ultra-short commute, in UTC, and if we buy a house (in PQ, CMR), it will definitely mean a significantly longer commute. So with that in mind, we find the patience to wait (we HATE commuting in the rush hours!).

Thanks!!!

[Scarlett]

[quote=SD Realtor]My thoughts are that if your offer is the highest of all the offers out there then it does stand a good chance of being accepted, especially for an REO. I have an all cash buyer who has been outbid on a few homes already for REO properties in Eastlake by non all cash buyers. If the difference is only a few thousand then of course you are in peril. For shorts your position is weaker because when you submit your offer you may be the highest amount but while the processing is getting done another offer can come in at your bid amount and if they have less financing then they will more then likely get the nod. [/quote]

It seems that one may compensate for less downpayment by coming at above the asking price and hoping for the best.

How much higher you see the accepted offer, for REOs and short sales (percentage in regard to listing price)?

[quote=SD Realtor]
I agree with UR in that people are still out there buying with 10% down.

I am not sure I agree with that concept but it is indeed happening. Also you may not have to save another 10% to get to 20% down. Maybe you need to save 5% and housing prices drop another 5% and then you have made it. [/quote]
I don’t think it works quite that way, if you need to put 20% down… E.g. a house of 550K (my price range) – 20% down is 110K. With 10% drop in the price, 20% down is still close to 100K… which is still far from 82K (15%)… I actually need a drop of 27% in price for that 15% of the inital price 550K to become 20% of the actual price – it may or may not happen (I think it will).
Anyway, waiting for many years (>5) to save the 15-20% down will probably get me higher mortgage rates than todays with 10% down, and maybe even higher house prices (eventually, it could happen in the number of years it would take me to save the another 30K down payment – at least I’d be sure we have passed the bottom).

[quote=SD Realtor]I know with kids and a family it is hard to be patient especially if it means another year or two. [/quote]

That’s very true 🙂 But we will be patient at least another year, rather than doing something risky. We are renting in a place with ultra-short commute, in UTC, and if we buy a house (in PQ, CMR), it will definitely mean a significantly longer commute. So with that in mind, we find the patience to wait (we HATE commuting in the rush hours!).

Thanks!!!

[Scarlett]

[quote=SD Realtor]My thoughts are that if your offer is the highest of all the offers out there then it does stand a good chance of being accepted, especially for an REO. I have an all cash buyer who has been outbid on a few homes already for REO properties in Eastlake by non all cash buyers. If the difference is only a few thousand then of course you are in peril. For shorts your position is weaker because when you submit your offer you may be the highest amount but while the processing is getting done another offer can come in at your bid amount and if they have less financing then they will more then likely get the nod. [/quote]

It seems that one may compensate for less downpayment by coming at above the asking price and hoping for the best.

How much higher you see the accepted offer, for REOs and short sales (percentage in regard to listing price)?

[quote=SD Realtor]
I agree with UR in that people are still out there buying with 10% down.

I am not sure I agree with that concept but it is indeed happening. Also you may not have to save another 10% to get to 20% down. Maybe you need to save 5% and housing prices drop another 5% and then you have made it. [/quote]
I don’t think it works quite that way, if you need to put 20% down… E.g. a house of 550K (my price range) – 20% down is 110K. With 10% drop in the price, 20% down is still close to 100K… which is still far from 82K (15%)… I actually need a drop of 27% in price for that 15% of the inital price 550K to become 20% of the actual price – it may or may not happen (I think it will).
Anyway, waiting for many years (>5) to save the 15-20% down will probably get me higher mortgage rates than todays with 10% down, and maybe even higher house prices (eventually, it could happen in the number of years it would take me to save the another 30K down payment – at least I’d be sure we have passed the bottom).

[quote=SD Realtor]I know with kids and a family it is hard to be patient especially if it means another year or two. [/quote]

That’s very true 🙂 But we will be patient at least another year, rather than doing something risky. We are renting in a place with ultra-short commute, in UTC, and if we buy a house (in PQ, CMR), it will definitely mean a significantly longer commute. So with that in mind, we find the patience to wait (we HATE commuting in the rush hours!).

Thanks!!!

[Scarlett]

[quote=esmith]

If you want to get a short sale, you need to make an offer that is low enough for you to like and high enough for the bank to approve, and you need to stick around long enough for your offer to make it through the system.
[/quote]

What exactly do you mean by ‘sticking around long enough for your offer to make it through the system’? What does one have to do, after submitting an offer? Sorry, I have no knowledge of how the short sales work – yet!

[Scarlett]

[quote=esmith]

If you want to get a short sale, you need to make an offer that is low enough for you to like and high enough for the bank to approve, and you need to stick around long enough for your offer to make it through the system.
[/quote]

What exactly do you mean by ‘sticking around long enough for your offer to make it through the system’? What does one have to do, after submitting an offer? Sorry, I have no knowledge of how the short sales work – yet!

[Scarlett]

[quote=esmith]

If you want to get a short sale, you need to make an offer that is low enough for you to like and high enough for the bank to approve, and you need to stick around long enough for your offer to make it through the system.
[/quote]

What exactly do you mean by ‘sticking around long enough for your offer to make it through the system’? What does one have to do, after submitting an offer? Sorry, I have no knowledge of how the short sales work – yet!

[Scarlett]

[quote=esmith]

If you want to get a short sale, you need to make an offer that is low enough for you to like and high enough for the bank to approve, and you need to stick around long enough for your offer to make it through the system.
[/quote]

What exactly do you mean by ‘sticking around long enough for your offer to make it through the system’? What does one have to do, after submitting an offer? Sorry, I have no knowledge of how the short sales work – yet!

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