A year ago I started working with a woman, Carolyn, who wanted to buy a house. She was a first time homebuyer and excited to take advantage of the first time homebuyer tax credit.
Carolyn fell in love with a house for sale that was a short sale. We learned that there were already other offers on the home. Carolyn had me submit an offer that was above the list price. We waited knowing that it often takes lenders a couple of months to respond to short sale offers. After 2 months we waited some more. After 3 months we waited some more. After 4 months we learned that the bank had approached the sellers and told them that they wouldn’t foreclose, if the sellers would give them the deed. The sellers agreed. Carolyn didn’t get the house.
Early this year I showed Carolyn a house that was advertised as an approved short sale. The listing agent told me that the offer acceptance wouldn’t take as long as usual since the lender had already agreed to the short sale. Carolyn had me submit an offer on February 1st. We waited. We were told that the lender had misplaced the offer while moving their offices from Florida to New York. We waited. We were told that the lender was swamped with offers on other short sales and would get to Carolyn’s offer as soon as they could. We waited. After the offer finally got in the hands of someone who could make a decision, we were told that the original BPO (broker price opinion) for the property was too old. Another BPO needed to be ordered. We waited. Finally on April 22nd, nearly 3 months later, the bank accepted Carolyn’s offer.
On May 12th, one week before Carolyn’s scheduled closing we learned that another lender had a second mortgage on the property and that they didn’t accept the amount of money they would receive after the first lender was paid. We waited while the seller’s attorney approached the first lender about accepting less money. Yesterday, May 28th, we learned that the first lender won’t accept less money. The only way the sale can close is for Carolyn to pay an additional $9,000.
So Carolyn has a lot of thinking to do this Memorial Day Weekend. If she walks away from the sale, it will be too late for her to qualify for the first time homebuyer tax credit for another house. If she accepts the new terms, she’ll have to pay an additional amount that’s more than the $8,000 tax credit. Unfortunately, Carolyn’s experiences aren’t unusual in the world of buying short sales.
Fran Bailey specializes in downtown Chicago, Lincoln Park and Lake View condos, co-op apartments and houses. She has shared home buying and selling advice since 2006 and written about over 130 Chicago high rises. To schedule showings for any listings, get a 
