What do you get when you cross an FHA Loan with a Short Sale?
In my case, a roller coaster ride of emotions ending with a happy client in his new home. Last week, the escrow was closed successfully on my client’s short sale purchase of a home with an FHA loan. When the process started, I knew that it might not be easy. FHA loans have not been very popular because of their reputation for taking longer and being more complicated in terms of paperwork and inspections. Likewise, short sales can be tricky because of the wait period for approval from the seller’s lender (which can sometimes take months) and then the quick deadlines imposed by said lenders when the approval finally comes.
But in the current real estate market, both have become difficult to avoid. FHA loans have been making a comeback, partly due to the low down payment requirement of only 3% (soon to be increased to 3.5%). It’s been projected by some that 48% of all home loans will be FHA-financed in 2008 compared to 2% in 2007. Short sales, too, have become quite common – when I looked up the figures this past weekend, there were 96 homes on the market in San Bruno priced below one million dollars, and 33 of them (over 34%!) were short sales.
For my client, it turned out that using an FHA loan to purchase a short sale was a good fit for his situation, so that’s what we did. As expected, it was far from a straightforward transaction. There was constant tension between fulfilling the additional requirements of my client’s lender due to FHA financing, while still trying to meet the impending deadlines of the seller’s lenders with no guarantee of an extension. There were many points along the way where I wasn’t sure if the transaction was going to close. During the final week, I got to the point where I could recognize the voices of the loan agent and the officers at the escrow company (and they could recognize mine as well), as we called each other several times a day to follow up on the situation. When I finally received notice that the escrow had closed successfully, the sense of relief was indescribable – before I started in real estate, I had never imagined it could be this emotional…
Of course, I’m sure (or I really hope) that not all sales will be quite as dramatic as this one was. It seems, however, that FHA loans and short sales will be around for quite some time, so we agents will just have to learn to work our way through them. Would I be willing to go through the same situation again? Well in the end, my client was able to purchase a home at a great price and with only 3% down payment. And when we met for me to give him the keys to his new home, there was no question in my mind what my answer to that question would be.
Happy in Their New Home!
Posted with permission
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8 Responses to “What do you get when you cross an FHA Loan with a Short Sale?”
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as is so often said, “a picture is worth a thousand words” congratulations
That was SUCH a great story! Short sales drive me crazy! I’m so glad to hear that yours worked out! Great post!
Jeannie,
It’s wonderful to hear that the escrow is closed and your client has the key to the house but the greater thing is that your resilent and integrity worked during that period of emotional roller coaster. Also, I commend you for your taking the time to write up your experience. Keep up with the good work.
Dr. Lee
Jean,
Congratulations to you and your clients! I’m sure that this will just be the first of many successful stories.
Jeannie,
Excellent Job and Congratulations.
“Home….. Sweet Home…”
Lisa
Jean,
I am so excited for you I know how hard you work.
It’s a very difficult time for everyone,but hang in there. Congradulations!
Good Job Jean! I’m going through this process now, and I hope the result will be just as good.
http://www.RealEstateBurt.com
Thx for the comment Burt & good luck to you in your transaction. I hope it will be even smoother than mine was, and I’m sure you’ll do a great job.