Home Buying in Massachusetts>Question Details

Butterfly0103, Home Buyer in Massachusetts

Has anyone seen a short sale where the banking is asking for a p&s to be signed BEFORE they even see the offer?

Asked by Butterfly0103, Massachusetts Tue Jun 12, 2012

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Butterfly, there are no guarantees in any sale, whether it's traditional or short, and any buyer and seller can walk at any time. You should do your inspections now, because if you get to short sale approval and THEN start the process, it could derail the entire approval...you dont' know how close this homeowner is to auction. If you find a major issue after the approval and the bank is tired of waiting, they can move to foreclose on the homeowner. Do your due diligence now.

Buying and selling any real estate is risky whether it's a traditional sale, reo, or short sale. If you love the property you do everything in your power to secure an approval and that's getting it all done up front.
Good luck. I hope it goes well for you.
0 votes Thank Flag Link Wed Jun 13, 2012
Yes we have had to do the inspection but it seems odd that the owner is able to negotiate money back at closing that the bank will have to pay (because I know they can reject it...what is the point). Even our lawyer thought this to be different. It's hard to swallow paying for an inspection and testing for a house the offer was not even accepted on yet (from the bank). We now have our downpayment ties up for months (2 so far) and my guess is they will reject the money back and we will walk. If we only had the deposit hung up it wouldn't be as bad, but we have spend money on the inspection, tests, lawyer and have our money ties up before the offer has been accepted by the bank. Crazy to me
0 votes Thank Flag Link Wed Jun 13, 2012
Not uncommon. You may want to have a short sale rider that states the time you will wait for a response so you are not putting your money at risk and are not waiting too long for the acceptance or denial of your offer.
Good luck
0 votes Thank Flag Link Wed Jun 13, 2012
Butterfly0103,

Absolutely. It's quite common with banks to require that before begin to process a short sale. Some of them also require the home inspection to be performed before they begin the process as well.

The seller has to accept your offer first as they do own the house. The bank dictates the process in which they will work with the seller to approve the short sale. Each bank is different. Your buyer's agent should "interview" the listing agent to determine the process prior to your offer/PnS.

Amy
0 votes Thank Flag Link Tue Jun 12, 2012
Keep in mind the bank is NOT selling the property. The homeowner is so you need a contract first with the homeowner before you can present anything to the bank to approve. That said, you can submit an offer or a P&S it really doens't matter. I personally prefer a PNS signed, but in cases where an auction is pending, we've submitted and gotten approvals on JUST THE OFFER.
But you CAN go straight to PNS if you want to, but if you're uncomfortable, tell your agent you'd rather just put your "offer" in writing and then iron out the terms of the PNS with a good attorney.

Good luck.
0 votes Thank Flag Link Tue Jun 12, 2012
Yes, this is very common. Your buyers agent should have further advice and be aware of that. Many banks won't even look at an 'offer' and it is also suggested you do the inspection so that the 'as is' price you agree to is indicated on the P&S.
0 votes Thank Flag Link Tue Jun 12, 2012
Offers in short sales are non binding so perhaps they are simply trying to move to that stage of the purchase process and skip the P&S. Your buyers agent should be able to explain all the steps of the deal.
Web Reference: http://territory.com
0 votes Thank Flag Link Tue Jun 12, 2012
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