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My husband and I are looking to purchase our first home. Unfortunately, after many weeks of looking, the only one we love happens to be a short sale. To double the potential problems we face, we are taking an FHA mortgage that requires their appraisal to be valid. Knowing the lengthy timelines associated with short sales, at what point in this process should we begin to move forward with inspections/FHA appraisal/final mortgage paperwork? The house is in immaculate condition, but we did notice a couple shingles on the roof that look to have broken/blown in a storm, so it may need a patch - will this need to be done for approval, and if so would the mortgage company allow us to get this work done ourselves prior to close?
You shouldn't start your inspections, appraisal, etc... until you have a full approval from the 'shorting' lender (s). Make sure you get your agent to ask to see the short sale approval letter and make sure that the numbers add up and that there isn't a prommisory note to the seller (if there is, make sure the seller is aware and okay with it).
If everything looks good, then move forward like it's a regular transaction. If there are repairs needed, you will be able to have them completed prior to COE at your expense since pretty much all short sales are 'as is'.
In the exact same situation. Everything is our range were short sales. Our offer was recently accepted by the seller out of about 3 contracts. Seller's lawyer said they were pretty far along in the process and all we needed to do was have the bank approve our amount offer which was 10k over asking. I would not spend any money on the house for turning on the ultil or inspection until you get an approval letter from the bank. We almost did inspection to show we are serious about the house and to be able to cancel the contract if inspection came back bad to not waste out time waiting. 2 weeks later we found a better place that wasn't a short sale and canceled the short sale contract so thank god we didn't get that inspection. Oh and the lawyer said his client who owns the house took off to Mexico.
My tip is if you like the short sale houses put the offers in but keep looking do not waste time waiting on it. Once you're under contract with one SS maybe try to avoid looking at anymore and stick to REOs and reg sales. And don't get atth to the SS homes.
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