business

It's all ours.

Sometimes, Jeff and I still look around, not believing we survived the ordeal of buying this house on a short sale.

During the heady days of the Home Buyers' Tax Credit, we made good on our longtime resolve to sell our Minneapolis home. It sold in six days.

We found our new house three days later, in Minnetonka. Hopkins school district. Nice size and layout, great yard and neighborhood, good price. It needed work. But the basics were perfect and we could make it our own.

Our Realtor, Betsy Tarnowski, warned that she knew of short sales that took six months to a year to close.

Undeterred, we made a bid. Betsy urged us to write a letter, introducing ourselves. She delivered the documents to the seller's agent at dawn. There were six bidders.

It was March 22, 2010.

We began to educate ourselves. "Short" is not a reference to time. It's called that because the seller wants the bank to accept a payoff that's less than he owes. The holdup is on the bank end, where workers are digging through piles of short-sale packets and negotiating their best deals to take to upper management.

In the first 11 months of this year, 3,646 short-sale deals made it to closing, according to the Minneapolis Area Association of Realtors. On average, those sales took about seven months to close, significantly longer than a traditional sale.

We never learned exactly how badly our seller was underwater, but we knew he'd taken a $90,000 home-equity loan shortly before losing his job in the fall of 2009. He also had a large primary mortgage. He would miss his first payment in April 2010. He wanted out as much as we wanted in.

Three days after our we made our offer, it was accepted, even though it wasn't the highest bid. Betsy was told it helped that we were a family, and that we had the flexibility of living with my parents, if we must. Translation: We could stick around for the long haul.

But that's when the real waiting began. I kept a log. There was some action just about every week. A document delivered, a contact made, a signature procured. Betsy delivered almond cookies to the negotiator driving our file. It was enough to keep us on board, but I have e-mails to poor Betsy with subject lines like "feeling antsy today," "well, dang" and "AAAAAAAGHHHHHHHHHH!!!!!!!!!!!!!!!!"

In late April, we bid an uncertain farewell to our house and moved in with my parents. Three friends' short-sale offers fell apart.

We had to depend on the negotiator for information, though Betsy had the intuition to know that nagging the negotiator wouldn't help. The Internet was little help; most information was for sellers, or was terribly depressing. Our best tool was the one we lacked: patience.

We took to "stalking" the house, driving by a few times a week. It felt creepy, but it was all we had. We knew of moisture in the basement; our anxiety grew with each spring rain.

Other houses caught our eye but that felt like a lapse of faith. A few held promise, but none met our needs as this one did. We started each call saying, "I know nothing..." because we both were so desperate for news.

Jeff and I caught a moving sale at "our" house in May, and were fortified by an inside peek. By mid-May, the seller was gone.

We listened keenly to news reports about foreclosures, and the laws meant to simplify short sales. They wouldn't help us. Our frustration grew because we knew we weren't the only ones desperate to close a sale before a foreclosure, but stymied by red tape.

As May became June, we worried we wouldn't close in time to qualify for the $6,500 federal tax credit.

On June 2, the first bank made a counteroffer, at $7,500 above asking price. We agreed. And the waiting began for the second bank.

The seller's negotiator suggested we offer another $3,000. We agreed, noting in our letter that without the tax credit we'd be unlikely to agree to more.

On a morose Friday afternoon, five days before the tax credit expired, we were trawling the neighborhood for garage sales and for-sale signs.

Betsy called. "Pull over," she said.

We agreed to increase our offering to the second bank to $10,000, a settlement on the $90,000 loan that the second bank could swallow. We closed on Tuesday. The tax credit deadline was Wednesday.

In the end, we got the house for $8,500 less than the top price we were prepared to pay. The tax credit was ours. It was more than three months from start to finish, far shorter than average but grueling all the same. We may never know what made the difference. Was it the pointed reminder that we wanted the tax credit? Or that 11th-hour $10,000 infusion; our capable Realtor and negotiator; the almond cookies, or something else?

We spent our first night in the house on July 10. Since then we've been making much-needed repairs and updates, and adapting to our new neighborhood.

Did we make a good buy? Sure. Would we do it again? Yes, maybe. But not yet.

Maria Elena Baca • 612-673-4409 • Kara McGuire is on vacation. Her column will be back next week.