October 9th
2008
written by Alonna

As many of you know, Ben and I have been trying to buy a “short-sale” house in Eagle since last March.  Well, this week we canceled our offer on the house in Eagle.  In light of the financial crisis in the US and around the world, we decided to play it safe and stay where we are.  The whole process has been pretty interesting, so below is a timeline of how it all happened.

Our House:                                       Short-sale House:

shadyglen.jpg shadowcrest.jpg

November 2007 – Ben gets a job at HP.  Now we both work at HP, a 25-min commute to the other side of town.

February 2008 – We decide to look at houses in Eagle.  We’ll take advantage of falling house prices, move closer to work, and keep our old house to rent out while the market recovers.

March 2008 – Visit the “Shadowcrest” house for the first time and fall in love with it.  It’s 2600 sq ft, single level 3 bed, 3.5 bath, plus office and bonus room.  Plus it’s close to biking trails, and 10 minutes from HP.  The agent tells us it’s a “short-sale”.  When awe ask what that means, she tells us that the sale has to be bank-approved, which will take 30-60 days, and we’ll buy the house as-is.  Sure, sounds fine to us.

March 19, 2008 – Make our first offer on Shadowcrest for $280k.

April 2008 – No word about our offer, so we just sit back and wait.  Of course we expect it will be any day now.  I start packing.

May 2008 – Still no word on our offer.  We’re starting to get a little annoyed, as we thought we’d be moving by now.  Meanwhile we’ve done more research on short-sales.  A short-sale is when a homeowner stops making payments on their loan, but is trying to sell their house before going into foreclosure.  However, they owe more on the house than the current market value, so the owner tries to persuade the bank to forgive the difference in the loan.  Therefore, when you buy a short-sale house, it’s dependent on the bank approval since they’ll be taking a loss.

May 2008 – Finally we hear that the “BPO” (an appraisal done by the bank to determine the value of the house) has been performed.  Great news!  We should hear back from the bank’s negotiator any day now.

June 2008 – No word from the bank.  Our offer has long since expired, so we decide to create a new offer.  The market has dropped significantly in the last 3 months, so we lower our offer to $270k.

June 2008 – We learn that the house will go up for foreclosure auction on July 3rd.  This means that our short-sale offer must be accepted before that date.  Of course, we expect word any day now… and plan to stay home over the 4th of July weekend so that we can move.  At this point we’re glad for a deadline; whether or not we get the house at least we’ll know by July 3rd.

July 3rd, 2008 – The auction date of July 3rd passes by with no word from the bank.  However, we find out that the seller has filed for an extension so the foreclosure is postponed.  We are hopeful that this means we are close to the end!

July 2008 – We learn that the bank we’re dealing with is IndyMac, a large bank in California that failed in July.  This partially explains the excessively long “short”-sale process.

July 31, 2008 – No word from the bank.  Our second offer has expired, so again we decide to create a new offer.  This one is for $265k, since we continuously feel like the market is dropping and we deserve a good deal for all this waiting.

August 4, 2008– Finally!  The bank responds to our offer!  They counter with $298k.  We are annoyed with their price and want to play hardball, so we counter with $270k.

August 12, 2008 – The bank responds again, this time with a counter offer of $295k and a note that they will not go any lower.  Meanwhile, Ben and I hear rumors of layoffs at HP, so we start to feel nervous about buying a new house.

August 13, 2008 – We cancel our offer on the Shadowcrest house.  We aren’t happy with the price, and we’re concerned about losing our jobs.  Also we think that retracting our offer and waiting a month will put us in an even stronger position to negotiate, should we keep our jobs and decide to proceed.

August 26, 2008 – Ben and I learn that we are both keeping our jobs at HP – woohoo!

August 30, 2008 – We tour Shadowcrest for the 4th time to make sure we still love it – we do.  Our agent tells us that she believes the bank will accept a $290k offer but nothing less.  She encourages us to decide if we’re serious about buying the house, and if so, consider making an offer that the bank will actually accept.

September 3, 2008 – We make a fourth offer on Shadowcrest, this time for $290k.  We convince ourselves that even though it’s above our previous offer prices, we’re still getting a good deal since this is the cheapest house in the neighborhood at $108/sq.ft.  At this point we just really want to buy the house and move in already!

September 2008 – No word from the bank.  This shouldn’t be a surprise, but with our new offer price we expected to hear back right away.  I pack a few more boxes.

October 7, 2008 – As more financial institutions fail in the US and the future of the ecomony is more and more uncertain, we bail.

Present – We’re a little disappointed, but it’s been an interesting experience.  We still really like our current house, and now I’m thinking about fixing it up a little.

This weekend I plan to unpack the boxes and re-move in…

-Alonna

1 Comment

  1. Mom Albertus
    10/11/2008

    I think you did the right thing! We were both hoping that you would decide that way. I’m sorry you didn’t get the house you wanted, but I am relieved. This means you’ll have more money for plane tickets!!

    If this is the way the banks have been handling all the foreclosers – no wonder there is a credit freeeze and the economy is a mess. They had a chance to sell that house and they blew it and let a perfectly good home sit for a year. Very bad judgement on their part!!