The house hunt has been wearing on us. I flip through the online listings every few days, and talk to our realtor weekly. I examine the real estate ads in the paper religiously. We drive through neighborhoods, jotting down likely-looking addresses. We obsessively stalk one place that’s been repossessed, waiting for a lockbox to appear that would indicate that it’s on the market now.

It’s getting old.

But on Friday, I was wasting my time as usual flipping through realtor.com, and I spotted one that raised my eyebrows. Our agent had been going to show us this house a few weeks ago, even though it was out of our price range. We got busy and skipped it. This week the price had been dropped right into our range, so we made an appointment to go look at it.

Turns out, it’s a short sale, which effectively means that the owner is losing it and is trying to unload it before the mortgage company takes it back. The owners typically owe much more than they can get out it, so their bank has to approve any sale and eat the losses. And the losses can be big, into the hundreds of thousands these days, especially if they had a second mortgage. Our agent told us sometimes the second-mortgage bank will only get three or four thousand dollars out of a hundred thousand dollar loan.

We’re hoping that a bank would rather deal with eating the loss now and have to mess with it less than if they repossessed it and then had to do all of the sales themselves, and eat the losses, because prices aren’t going up. This way, they don’t have the costs of selling it themselves, or of having it sit for months or years not making any money at all.

The banks don’t have to play by the rules though. They don’t have to respond to an offer within the usual three days, and in this situation, they don’t even have to consider offers one at a time. If someone else comes in with a higher offer in a month, before they’ve committed to one, we’re likely hosed. It’s an even bigger gamble than usual, and much less certain than buying either from an owner or a repo house.

 

But we liked this house, even though there’s nothing done with the backyard. There’s a lot of room for a shop and even a pool if we were so inclined. And we’re not just dicking around here; we really are shopping, so we made an offer on it yesterday. We’re not holding our breath and we’re going to keep looking at other houses. That’s one of the good things about them taking so long to evaluate responses; if we find another one that we want more after the ten days they have to answer us, we can go for that one instead without penalty.

I’d like this house; it would suit us, but we’re finding that there are quite a few places out there that will suit us. For now, for this one, it’s wait and see, so we shall wait.