Looking to buy before short selling home? What am I missing?

Hi all,
I was contacted by an out of state buyer today looking to move into our area.

Yay, right?

But then she tells me she's just listed her home as a short sale.

Her timeline for buying something here? Now.

Okay, what am I missing here?

She says she has plenty of money to close a deal here - which I am thinking the lender she is claiming a hardship with is going to find beyond interesting.

I just don't get it. Have the rules changed or something?

How can you claim a hardship in one state on one house while attempting to buy a house in another state?

I'm completely baffled.

Tags: Hardship, sale, short

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Permalink Reply by Thom Colby 888-391-5245 CA Brkr on August 15, 2011 at 11:46am

I can hear it now.....

"Your Honor, they told me they were selling their current house as a short sale and we needed to get this new house closed before their credit was ruined, I didn't think anything was wrong with that... I was only doing my job, I'm just trying to earn a lilving."

We all need to be careful in what we choose to participate in. Here in Orange County, CA the District Attorney has established a Housing Fraud Division full of attorneys and investigators specifically to find these type of activities and they have engaged many Realtors to assist them in discovering agents who might be knowingly (or unknowlingly) participating in Housing Fraud. I know it is also happening in Houston and several other cities around the country.

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Permalink Reply by Richard on August 15, 2011 at 12:26pm

Thom,

Although there are many scenarios out there and I would think most agents generally would want to help the consumer and public. As a buyer, I wouldn't and should never ask anyone to take a chance on their career. There are however, people who could care less. My agent's rule-of-thumb, if it looks suspicious according to the law, pass on it. Thom, your advice in being cautious and CYA are great words of wisdom.........

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Permalink Reply by Brian Avery on August 17, 2011 at 12:04am

Nate Gerard said:

Is it possible that she will complete the short sale without missing any payments? If so, and if she has good credit otherwise, she'll be able to buy a home just after she sells.

Maybe she just needs to wait until after the short sale is complete. She obviously hasn't missed any payments yet or she would not be able to qualify for a new mortgage right now. I have a BOA Co-Op short sale about to close (no missed payments) and one of the sellers will be buying within 3 months of closing on their short sale.

Good Luck!

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Permalink Reply by Jim McCormack on August 17, 2011 at 1:13am

Please see my blog post Waiting Periods to Buy a Home After Foreclosure, Deed-in-Lieu, Shor... about obtaining a mortgage loan after a short sale, foreclosure or bankruptcy. As you will see, it will probably not be possible.

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Permalink Reply by Jennifer Garcia on March 10, 2012 at 7:15pm

I just started taking these kind of clients but I make sure I bring them first to the Real State Attorney and accountant. Then, I feel a lot better that they received an advice from the professionals. What they do from there is up to them. They were warned. I make sure I have them sign a letter releasing me from liablity because I advised them to seek counsel and were given advise. I find a home for the homeowner and make sure I have the advise of the lawyer at all times when I short sale the house. The lawyer is also hired to help get approval on the short sale. I will NOT do this without the help of a lawyer. One month missed mortgage of the homeowners to pay a lawyer is all worth it! That releases me from laibility.