Of course the bank wants to see all offers submitted, but my opinion is that the bank will take longer to approve, if they think the agent is going to keep submitting offers rather than working with the offer amount of 1 buyer & getting the bank to approve an acceptable net.
The seller CAN technically accept 100 offers that are ALL "Subject To short Sale approval by the lien holder(s)".
The bank doesn't care if an offer is for Cash, VA $1 down, FHA low down, Conventional or otherwise, they ONLY CARE ABOUT WHAT THEY NET & that the buyer can close.
The 1 loan the seller has with BofA could have been a Cashed Out Refinanced 1st, there doesn't have to be a 2nd for their to be an equity line.
Regarding this, YOU need to find out how much equity was cashed out over & above the original loan amount & what the purchase price is going to be approx., because if the owner can't contribute towards a requested cash contribution from BofA, you may have to. Knowing this fact would help you to understand why the listing agent might favor a buyer with cash or a larger down payment.
Whether the short sale is in the HAFA process or traditional short sale, auctions are not automatically postponed, the listing agent needs to keep in contact with the bank & ensure that no sale dates (auction dates) are being posted & that all of that sort of nonsense is PostPoned or on HOLD.
Shoot me an email if you want to talk about this some more.I don't look back on this same Trulia thread for answers posted after mine.
Realtor Since 1996
Main Street Realtors -
It's not an easy task for an agent to work in a dual agency. Conflicts arises. The question is who is getting a fair representation?
In the world of short sales, nothing (or, everything) is out of the ordinary.
One key element to understand in a short sale transaction is that the Seller, yes the Seller, not the lender decides who's offer to accept. This is important to understand because it's the seller who decides which offer will drive negotiations with the bank.
In other words, a seller may decide that they want to choose one offer, which gives them the best chance of settling their debt with the bank, They may decide to accept all offers, subject to lender approval, and let the bank decide which is best. Or, if they want to ride it out to the end, they may decide not to choose any offer and let the home go to foreclosure.
It makes no difference if this is a HAFA or a standard (using that term loosely...) short sale. Also, the fact that the previous sale was for less than the current listing amount is unfortunately a common scenario. Many people took out, as you suggested HELOC's; more common however were cash out refinances, as prices rose, available cash to owners grew, loans got larger, then the music stopped.
The fact that the agent is telling you a full price offer is not likely to be accepted, tells me that the problem is the listing price. If a seller and their agent set the marketing price of a property below the expectations of the shorting lender, then the bank will reject the proposed settlement price and the offer in hand will be rejected; even if it's for full listing price.
FHA, VA and low down payment offers only impact the chance of acceptance in relation to the actual settlement of the transaction. I'll give you two examples:
1) If there is a junior (2nd TD) loan which is asking to settle for $10,000 but the 1st lender will only allow the junior loan to be paid $5,000 from the sale proceeds. The most common way to settle this is for the buyer to pay the balance of money desired by the junior lien on the buyer's side of the HUD. If a buyer has limited funds available for their down payment, this could create problems at closing.
2) Some customary closing costs typically paid by a seller, are not allowed or create problems with FHA lenders when the fees are placed upon an FHA buyer. The shorting lender, does not care. If you reach an approval and for some reason a shorting lender does not allow one of these fees to be paid from the seller's proceeds, again the burden will be placed on the buyer. If the buyer has very little money for down payments and closing costs then a deal could fall apart.
It sounds unfortunately, like you are in the middle of situation where neither the seller nor the lender have committed to a buyer or a price. To make matters more unnerving, the listing agent is doing his/her best to make sure the seller has many options open to them. This means you will likely continue to be one of many potential buyers of the home, and in my experience part of a more lengthy short sale process as the lender wades through documentation from multiple potential buyers.
My suggestion, temper your expectations, raise your offer (if in your interests) to eliminate other buyers from the equation, and/or continue looking for alternatives.
Best of luck,
Allan S. Glass
ASG Real Estate Inc. Â®
149 S. Barrington Ave, Suite #660
Los Angeles . CA 90049
Direct: 213.973.8637 (213.97.FUNDS)
CA License: 01154002
Visit Allanâ€™s Blog: http://allanglass.featuredblog.com
Have a realtor represent your interests in any case and certainly when you aren't confident in the Listing Agent. .
Is there that much of a difference between a conventional and FHA loan?
Finally, the first loan is through BOA and the agent claims that there's only one loan but the previous purchase price is less than the asking price now so I'm assuming there's a HELOC or something else otherwise I'm not sure why they'd be short selling it.
Also, I know that the owner has missed at least two mortgage payments. My understanding is that they will not move forward on a foreclosure while in the HAFA process.
I wonder if my greatest hope to get this home would actually be foreclosure...