Originally Posted by maptome
Home insurance and property tax escrow has a small fee that maybe you are not aware of. Of course, if you choose to pay both in lump sums annually, there would be no escrow needed, and thus, no fee.
You can only opt out of escrowing if you put 20% or more of a down payment on your house. It doesn't matter how much history you have owning homes that don't have escrow or how good your credit is. Dems da rules now. Before, they were a little more flexible, but it's now on lockdown. :/ There IS a small processing fee, but it's not usually optional.
Homeowner's insurance is driven by zip code, square footage and multiple other items that are house specific. We have had insurance policies run us $500-$1200 depending on the house itself and the town and state we're in. It's a broad range.
Short sales are definitely open to regular buyers. So are foreclosures. Each is their own special brand of nightmare. :/ We have bought two foreclosures and attempted buying a short sale since October. NONE of them has closed even remotely on time and the short sale (a process that started in early October--after an offer in August that the owner wouldn't accept) is now going to fall through just because of timing (although we anticipated it falling through for not appraising to the value of the sale price.
Short sales also come in multiple flavors: ones where the owners have already struck a deal with their bank(s) for what the bank(s) will accept in terms of a sale price; ones where the owners have NOT talked to the bank yet and are just going to submit an offer to the bank and hope they accept it; and ones where the owners have started the process but not completed it.
The thing about short sales is this: the bank(s) actually have to determine whether or not the owners QUALIFY for short sale or if they are capable of either continuing to pay their mortgage or they can pay out the difference between what they actually owe and what the house can be sold for. And it's not really a short process, either. It's also a time-sensitive process, so even if the house is advertised as a "bank-approved short sale/price", 1) they may be lying (I was surprised this was legal because in some states, agents are legally bound to truth in the listing); and 2) they may be being truthful, but the bank's analysis of the home is outdated (often they're only good for 90 days) and has to be redone (which might take another 90 days) and/or they need updated financials from the sellers to be sure they haven't had a raise or come into some money or whatever. All of THAT takes time. Then you have a situation where the appraisal can come in lower than the agreed-upon sale price and you have negotiation all over again... who's going to make up the difference between the agreed-upon sale price and the appraisal price (it might be the seller, it might be the agents lowering their commission, it may be that they tell the seller "if you want it, this is the price... period").
So short sales are notsomuch an easy road and are painfully long.
Foreclosures are long, but somewhat easier. Their issues usually have more to do with repairs that need to be made to the house, which need to be done before the closing so that an appraiser can determine value (they're usually winterized/water & utilities off and you can't get a conventional or FHA loan unless those are in working order & the appraiser can see that) OR getting a 203k loan (and that process is it's own set of headaches, but do-able) because the systems are not functional and the bank isn't willing to fix them. And if the bank opts to fix these things, then the process of getting bids/estimates for the work, approval for them and then getting the work done... all of that takes time, too. And sometimes, the people doing the work ruin things in the house in the process (we just had this happen).
It can be DONE, and if you're renting--you're in a better position to weather those delays than most people. But know that it's a long, drawn-out process that nobody can really give you a timeframe on. And the closing is a moving target. If you know that going in, it's a little easier to deal with.