Oops! Forgot to answer the second part of your question--regarding "bank approved" short sales:
these are actually still fairly uncommon, and if it were truly "bank approved" then it would not have taken 3 1/2 months to approve, would it?

What many agents are doing on short sales, is running an offer - ANY offer - through the bank in order to have a negotiator assigned and a BPO (appraisal) done, in hopes of facilitating a quicker response on future offers. It really doesn't work, since most lenders have a set procedure for handling short sales, and the clock starts over with each offer regardless.

I have seen only a very few legitimate "bank approved" short sale situations, which occur when the bank is offering the seller an opportunity to relinquish responsibility for the debt by short selling, rather than a deed in leiu or foreclosure. It's rare, still, but I think we'll begin to see more, particularly as distressed homeowners choose to fight the foreclosure rather than simply allowing the bank to foreclose uncontested.

The moral of the story is: DO NOT GO GENTLY into that good night, homeowners! FIGHT! The more we, as consumers, push back against these types of actions, the quicker our economy will rally!

Hi Beth,
It gets a little more complex than just having the bank approve the deal. In some cases the PMI company has more say because they are the ones insuring the loan and in other cases you may not even know who it is that needs to give the final approval. Many of the larger lenders will only keep a percentage of the loans that they write in house. The others will be bundled and sold off to investors. Most will offer to service the loans for the investors for a small percentage. In a nut shell you get your monthly statement from ABC MORTGAGE and you send them the money. They do the bookkeeping, manage the escrow account take their percentage of the interest and forward the rest on to the investor that owns the loan.
In these situations it is the investor that owns the loan that really has to make the final decision. In the same way that your Agent, Lawyer or Professional Negotiator is working as a go between for you and the bank, the bank is working as a go between for the investor and your representative.

What the bank wants to approve is the final HUD1 Statement showing all costs out and the bottom line to the bank/investor. As long as you go in at the approved price and the Closing Attorney,Realtors and anyone else that needs to get paid agree to the prior terms and fees there should be know hold up.

I hope that when all is said and done, you find that you bought the house that you wanted at better than market value and that you made the right decision.

Beth,

"Bank Approved" regarding "Short Sales" can have multiple meanings...which can be confusing and misleading. Most lenders will not give an approved price until after the first offer has been submitted and a BPO (Broker Price Opinion) and or appraisal has been done. This first offer may not even be near where the lender will negotiate, but the listing agent is trying to get a negotiator to look at it and give them a point of direction...meaning the first may be nothing more than a guinea pig. If the bank counters and the first buyer drops out, some agents will refer to the counter as "bank approved". You need to have your agent question the listing agent. Always ask if the price it is listed at is the "approved price". If the listing agent is not getting any activity, they may reduce the price to generate offers...but the list price is actually below the approved price. Again you must ask what the approved price is. I like Loretta's reference, "Do not go gently into that good night...." Short sales are not for the faint of heart. We think of them like a raffle...you buy a ticket (write an offer)...and maybe you will win. If time is an issue, short sales are not the route to go.

I suggest having your agent check with the listing agent Mondays and Fridays.... they might not have any new information.... but you know the old squeaky wheel analogy. I wish I could give you a time frame...but there isn't one. Basic guideline is 45 days PLUS.

The PLUS side is...because it is showing as PENDING in MLS, other agents will not be showing it. Once it changes from "Active with Contract" to "Pending” it also changes the IDX feed which removes it from many of the other websites. All you can do right now is hang in there and keep checking on a regular basis. Best of Luck! Hopefully you will be in your new home soon and the Seller will be able to move on also.

Sincerely,

Pam Cohn
Broker Associate, GRI, CDM
Prudential Tropical Realty
pcohn@prutropical.com
727-204-7155

Beth, first of all, the status showing in MLS has nothing to do with the short sale. There are two distinctions for properties under contract: "Active with Contract" and "Pending Sale". ANY short sale which has offers accepted by the seller (meaning the person with their name on the deed, not the bank) should be listed as "Active with Contract", pending lender's approval. "Active with Contract" means that the property can be shown and other offers considered, depending upon the terms of the contract in negotiation. It also means that the bank may come back with a counter offer, rather than an acceptance of the contract as it stands.

A "Pending" sale, on the other hand, is fully approved--if the listing agent has placed it under "Pending" status, they are pretty confident that the sale will be approved, and no further negotiations will take place. When the status is "pending", only the last few contingencies such as inspections or loan qualification must take place before the closing happens.

Hope this helps, and GOOD LUCK!