Thanksgiving week marked a personal milestone for us. It was one year ago that we first laid eyes on the little La Crescenta cottage that would eventually be our home.
I had been happily renting a Verdugo Woodlands house for more years than I care to admit. Suffice it to say that I probably paid off my landlord's mortgage and put at least one of his kids through college. It just seemed easy (and lazy) as a single gal to live in someone else’s house. It wasn’t until I met my husband who swept me off my feet, and then pointed out exactly how much I had poured down the rent drain over the past undisclosed number of years, that I considered making the leap to homeownership.
We started off innocently enough. We found an amazing realtor, Jane Kane, who is an expert in the Montrose/La Crescenta area. And as it turned out, exceedingly patient. I still remember our first meeting with her, where we described our dream home, “a little cottage in the canyon.” We told her we were in no rush to buy, that we were sure prices still had some room to drop, but just figured we’d keep an eye out in case something perfect came along. Oh, and we also had a pretty low price point, at least for La Crescenta… you know, all those phrases that strike fear, or at least frustration, in the hearts of most realtors. Surprisingly, Jane took us on.
In the following year we put bids on a few houses that caught our eye. None of them were cottages in the canyon, but they were distinctive and unique. As happens quite often these days with standard sales in our area, we were massively outbid in every case. One home had 12 bids, pushing the price up over $75K above list price. Thankfully, we kept a level head and didn’t get caught up in the insanity. One day we noticed an adorable house come up on the listings. It was most certainly a cottage, and was very close to a canyon. Unfortunately, it was also a short sale, which more than a few people had advised us to avoid at all costs. Run away, they said, run far, far away…
Short sales are when a house is sold by the owners for less than they owe on their mortgage. Because their lenders have to agree to accept a loss, they can take a very long time to process. After all, what lender is in a hurry to close a deal that loses them money, even if the alternative is foreclosure? As there is often more than one lender involved, things can get complicated as they negotiate with one another for a piece of the diminished pie. The buyer has no input in these negotiations, or even any information on progress, so it can be very, very frustrating and ultimately fall apart if they cannot make a deal.
Nevertheless, Jane got us in to see the house on a rainy November day. It was love at first sight. I know, they say you should never fall in love with a house, especially not a short sale. But this time our offer was chosen over the other bids, largely because we convinced the selling agent that we loved the house and were prepared to wait it out.
Our offer was accepted in early December, and then submitted to the lenders for approval, as they would be taking a loss on the sale. Months passed with very little action. Long, agonizing months. We continued to look at other properties, but those just confirmed what a great find our short sale was... IF it were to ever happen! We stayed the course, almost putting it out of our minds, yet remaining hopeful. After a few twists and turns, we suddenly got word in early July that we had written approval from the first lender, with a deadline of July 21st to close. Luckily everyone worked to get the second lender to agree and speed escrow along.
On a warm July day, after an eight month wait, we were finally handed the keys to our canyon cottage. Looking back it was worth the wait, as we ended up with a house we love in a better location than the standard sales we had previously considered. And as for the price, I firmly believe we got an exceptional deal for the property (this belief is based upon the appraisal, not just my opinion.)
For those of you out there considering short sales, my simple advice is this: Hang in there. All of the agents we chatted with at open houses during the "limbo period" told us the same thing -- if you are prepared to wait it out, you'll eventually get the house. Be sure you do a short sale addendum and renew your offer every 30 days in case you find something better. Continue looking at other houses in the meantime. There is, of course, the chance you won't get it, but many short sales fail simply because the buyers themselves got tired of waiting and dropped out. It helps if you are a renter as we were and have the luxury of time.
I was leery of going the short sale route after hearing all the horror stories. Throughout the entire process I was fully prepared that the lenders might come back at us in the eleventh hour and ask for more money. Thankfully, that never happened. I'm so glad I didn't let the stories scare me away from the house that will be our home for years to come.