I submitted an offer on a duplex right down the street from and virtually identical to one I already own.
Because the seller is attempting to do a short sale (i.e. sell the property for less than he owes on it), his lender will have to approve the sale. So rather than the effective date of the contract being when Buyer and Seller both sign it, it's actually effective when the bank approves it as well.
I'll have to pony up the escrow money ($1,000), but my option period won't begin until the bank approves it, nor will I start doing due diligence such as getting an inspection, appraisal, mortgage, etc. It can take two months or more for banks to look at and formally approve short sale requests, so I may have quite a bit of time before I have to close.
This is really good news because I have time to get all my ducks in a row financially. I want to optimize my credit before my mortgage banker has to run it for the new mortgage (he didn't run it in order to write me a pre-qual letter because he already had a report on file from January when I refinanced my homestead).
Financial Things To Do
- Pay off all credit card debt, including the two cards at 0% (one of which I just applied for this past weekend!)
- Quit using credit cards entirely so that the balances will actually show as $0 when they pull it (even if you pay your cards in full each month, the credit report will reflect a balance if there was one on whatever day they are reported).
- Get downpayment in place and liquid, as soon as possible so that on my statements the lender will see higher cash reserves.
1 comments:
if the lender is wells fargo, don't count on it happening quickly as two months may be pushing it with them.
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