Hi PK.

A lot of good information has been given. As you can see, there is good and bad with short sales. Each day the good gets better though.

Investor/Banks are slowing coming to an understanding that there is generally more financial benefit to a short sale verses foreclosure. The latest stats indicated the investor nets about 15% more on a short sale.

Another good stat is that more short sales closed escrow in the last few months than ever before. Most of this is due to the fact that the banks (actually loan servicing companies) have the infrastructure and staff to better deal with the complexities of a short sale. On the back side they are a VERY convoluted transaction.

Depending on who the loan or loans are with will determine much about your success.

We have a web site dedicated to providing information about short sales that may provide more answers. I know you are working with another agent, and we simply offer our site as a place to gain knowledge. Go to http://www.short-sale-phoenix.com or use the link below.

I'd say your chances of success, in general, have never been better.

After working on short sales as both the listing agent and the buyer's broker, I believe every short sale is different. Most take close to 2 months to secure approval, some take way longer, and some are rejected. The best chance you have is usually on an offer that is at current market value, ideally with only one lien, and with the seller having a true hardship. A lot of it comes down to the individual negotiator(s) at the seller's lender, even within the same bank. Some are great and some leave a lot to be desired. You just have to be ready and willing to wait for the process to take place.

Thanks again everyone. You've all been very helpful and I appreciate the advice. :-)

Dear PK:
I know it is frustrating.

The other name for a Short Sale offer? "Wait Long Offer".

Why? Even if your offer is fair, the real negotiations, after the bank even picks up the file (months), take place as the seller and the bank(s) negotiate on how the difference between the amount that the seller is 'shorting' the lender is going to be handled. A no, partial or full write off is negotiated between the parties. The sellers hardship and their future earning potential take more of an important role than your offer.

Many buyers get frustrated and just walk away during this wait. There are so many good buys out there on normal properties and foreclosures that, unless you just LOVE the short sale home and are in no hurry, it may be time to move on.

Did you know that the State of Arizona has a free GRANT MONEY program of up to 22% of the selling price if you live in a foreclosed home for 5, 10, or 15 years? This makes buying some foreclosures, even with fix up needs a really good deal.

If I can help you with your home buying decision or grant money, I would be pleased to do so. Take care and good luck!

Regards, Jeff

Jeff Masich, Realtor®
Arizona Homes and Land

http://ArizonaHomesLand.com
480-556-0940
jmasich@usa.com
HomeSmart Real Estate

Hello P.k.

Here's a follow-up to your questions...

Q: "Is it true that even though we're under contract the lender could still approve someone else's offer and not tell us about it?"
A: No. Not true. So long as the seller and his/her agent are in compliance with the law. Once the seller has signed/executed your offer and sent it to the lender for review, that's the ONLY offer that can be sent in. The listing agent cannot advise his seller to execute more than one offer; think of it this way: the home can only be sold once and to one buyer, therefore only one contract can be signed by the seller.

Q: "Can our agent find out who the lender is?"
A: That shoud have been one of the first questions asked of the listing agent. There's a list of banks out there that will give you a good idea of how long the process might take. B of A is likely to be a 12+ week process, whereas Wells Fargo is typically 4-6 weeks or less. It varies greatly between the lenders.

Q: "I've been told that the longer a short sale has been on the market the better your chance is of buying it. Any truth to that?"
A: Sometimes. IF there is a 'Notice of Trustee Sale' recorded with the county, that means the clock is ticking. This will usually spur the lender to act a bit faster, as those short sales take priority over the short sales that are fresh to the market and do not have a sale date posted. Also, the listing agent can sometimes make the case with the lender that his/her listing has 'weathered the storm' so to speak, and didn't receive a flood of offers in the first week as so many properties do in our market, therefore it needs to be sold at a reduced price. Compiling some solid market data as evidence of this statement will go a loooong way to getting the lender to respond positively.

Hope this helps!

Jim Mitchell
Century 21 All Star, REALTORS

Yes, it is very likely you will be successful in your short sale offer, however you must be very patient. It can sometimes takes weeks or even months to receive a response from the lender. They are overwhelmed with short sales as well as foreclosure. If time is of the essence and you must move quickly, then short sales are not the right choice.
Kris Burnell, GRI, ABR]
Long Realty
10445 N. Oracle Ste 121
Oro Valley, Az. 85737

Thank you all for your input. My realtor has 30 years of experience, including short sale experience. I feel like he's answered all my questions so far, but after reading some of these posts I'm getting concerned again. Our offer was accepted by the seller in one day and that was about a month ago. We knew that we would have to wait for a response from the lender and that's actually not a problem. I just want to make sure we know every possibility and every detail regarding short sales. I didn't know much about them when we started looking, so any additional information is extremely helpful. Is it true that even though we're under contract the lender could still approve someone else's offer and not tell us about it? Can our agent find out who the lender is? I've been told that the longer a short sale has been on the market the better your chance is of buying it. Any truth to that? Thanks!

PK
You need to sit down with your Realtor and go over your questions.

An experienced Realtor will answer your questions, and more important, will develop a plan.

For example, calling to ask when they lender will approve the short sale is good, but better would be to ask when they expect to have lender approval.

Ask for a copy of the title report, talk with the title company you want to use and evaluate the liens. Are any of those liens going to cause a problem?

If the owners are agreeable, ask to have your REaltor schedule a meeting with their Realtor and the sellers to discuss strategy. Sometimes you can find out things that might be holding up on the approval. One of my favorite questions is: What can I do to help move this sale forward?

You are not alone in your feelings. There are a ton of variables when buying and selling a home as a short sale and these many options are what make the process iffy.

On the good news front, many of the lenders are better equipped to handle short sales than earlier in 2009. Stats indicate that more and more short sales are closing escrow each month... not just the number of homes but the percentage of homes closing escrow is actually rising.

As Tonje said... patience is a big part of being involved in a short sale.


We have a nice Q & A section on our dedicated short sale web site that people are finding helpful.

Good luck.

Ask your realtor to conduct a complete interview of the short-sale listing agent. Your own realtor should have done that already. By asking the right questions, your realtor should have all your questions answered. Two of the many questions to ask would be: in what position is my offer? and where is my offer in the process.

I do a lot of short-sale as a listing realtor, and buyers and their agents always know where they stand. I provide weekly reports in writing so we cover every step of the way. I never have a problem knowing exactly where the short sale is and can predict with some degree of accuracy when it should close depending of where it is in the process.

Richard Bazinet - John Hall & Associates

Absolutely, but you need to have patience. They take time and if you expect an answer quickly, you wont get it. As Jim is stating, there are so many factors on a short sale that it is impossible to know how long it will take for an answer.

P.K.
It really depends on a LOT of factors...these are only a few...

>the experience of the listing agent IF they are also negotiating the short sale with the seller's lender (or is it a 3rd party?)
>the number of loans/lenders you're dealing with (2 or more with different lenders decreases your chances of success)
>which lenders are involved (Bank of America is the KISS OF DEATH right now...they are INUNDATED with short sales and UNDERSTAFFED at the moment, and have been for a LONG time; Citimortgage isn't much better)
>who owns the loan? Fannie Mae, Freddie Mac, VA, FHA, etc. etc. They all have different minimum's that they'll accept on short sales. (most want to net around 88% of the appraised value...NET is AFTER fees have been paid)
>does the seller have a 'true' hardship, or just 'walking away'?
>are there any unusual liens on the home? FED tax liens, child support liens, HOA liens, etc. etc.
>was the home priced correctly by the listing agent, or soooo low as to tempt buyers into making an offer, only to find out months later that it was WAY underpriced/undervalued when the lender get's their BPO/appraisal back?
>has there been a trustee sale notice file/posted yet? A lot of lenders won't get off their rear ends and start working the file unti this happens (Bank of America is top of the list when it comes to this)
>has the listing agent submitted EVERYTHING that the lender requires to even begin to review the short sale and order an appraisal and/or BPO?

As you can see, it's not for the faint of heart, just the buyers with the patience of a saint. Short sales are a LOT of work on the listing side, and they take a saavy and shrewd negotiator (listing agent) to get the job done.

Hope this helps!

Jim Mitchell
Century 21 All Star, REALTORS