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Jen, Home Buyer in

Hi I am in a initial stage of the short sale process-Does the seller have the responsibility to immediately

Asked by Jen, Tue Aug 5, 2008

tell the bank (lender) that there is an offer? Is there a legal time frame for this for teh seller or are they at therie leisure? Is the seller's real estate agent work for the bank as well? Who directly contacts the bank? Does the bank have another broker for the deal? Does the bank supervise and take note when an offer comes in? Thanks for your advice:)

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Hi Jen-
In a short sale situation, the seller still owns the property. They can make all decisions as to wehther or not to accept a contract. It is still their home. And only they know how much or how little they can afford to bring to closing.

Once the seller accepts the contract, then the entire Pre-foreclosure package is forwarded to the bank for approval or refusal. So you will be approved by both.

The seller can negotiate what they feel is a fair market value. The bank negotiates what they feel the home is worth.

It can take up to 6 months for approval, or refusal. And sometimes the bank will come back and negotiate. After the seller has agreed.

The listing agent does not work for the bank, they work for the seller. And the buyer's agent should be working on the buyers behalf.

The bank will actually negotiate with the seller's attorney. And sometimes with the sellers agent. But not always.

Hope that helps!
1 vote Thank Flag Link Thu Aug 7, 2008
I just had one that took almost 60 days for approval. Banks are swamped. Make sure your Buyer's Agent is checking in every few days with the listing agent to get updates. Be patient, the rules are different in these situations and not all players follow them. Hang in there.
1 vote Thank Flag Link Tue Aug 5, 2008
the simple answer to your question is that the seller/owner has NO obligation whatsoever to notify the bank that they have received an offer. in typical (more on this later) short sale situations, banks DO NOT review offers since they do not own the property. the bank is not considered a principal or party to the transaction. the seller and seller's agent negotiate the offer as in any normal situation and if an agreement/contract is reached, it is contingent/subject to the sellers' bank(s) approval, then submitted to the sellers' bank(s) to see if they will accept the "short" net proceeds of the sale after normal expenses are covered. the bank can approve, counter or reject the sale or any of the expenses involved.

ok, now the explanation for a "non typical" short sale for which the above does not apply....if an owner has been in touch with the bank prior to the short sale and the bank has pre-approved the owner for a short sale in a written agreement with a preapproved listing price by the bank, the bank will probably want to know about all offers and may suggest that you sign and forward any offer you get for their review. in these cases I suggest you (if you are a seller) have this conversation with the lender regarding any offers you might receive ahead of time and follow their suggestions/direction
0 votes Thank Flag Link Mon May 28, 2012
Short sale cantidates submit an entire package of information to their lender and your offer is only part of this. They will need a Brokers Price Opinion (BPO) on fair market value + hardship letter & financial statement from the seller. Please see my blog here for more details. http://activerain.com/blogsview/608336/Steps-to-completing-a
0 votes Thank Flag Link Wed Aug 6, 2008
GREAT QUESTIONS: Listing agent forwards to the bank for their approval. Seller is aware an offer has been presented, bank has to approve offer. Banks are overwhelmed with foreclosures and short sale it can take up to week for approval. Executed contract so forwarded to you via your buyers agent. Listing agent does not work for the bank, seller is contacted listing agent.
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0 votes Thank Flag Link Tue Aug 5, 2008
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