Home Buying in Alexandria>Question Details

VGGV, Home Buyer in Alexandria, VA

How do banks respond to offers in a short sale?

Asked by VGGV, Alexandria, VA Thu Feb 14, 2013

I submitted an offer for a short sale on November 6th, 2012. I have been pressing my realtor to get an answer from the bank; he said the bank was asking for a price higher than the price the property is advertised for; he also said he offered 10k more than my original offer and we should now wait for their response. He gave me all this information verbally and I did not sign any higher offer to submit to the bank. Is this how the process normally goes? this is my first time dealing with a short sale or trying to buy a property.
Also, how much longer should I wait to have a response? I submitted the original offer on November 6th of 2012.
Any suggestions/info would be greatly appreciated.

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Answers

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Team Maison’s answer
Dear VGGV:

Customarily the price is determined by a combination of a formal appraisal and a BPO (Broker's Price Opinion). Most financial institutions will accept 95% of that figure.

Also you mention "the bank". There are financial institutions that have their own short sell departments, and those who contract out to third parties. The later usually takes longer.

Furthermore the listing agent may be dealing directly with "the bank", or using a short sell negotiator (best practice). The negotiator could be overworked with too many files. That is why the good short sell negotiators limit themselves to no more the thirty files/cases.

Hope this answers your question. Best regards - Bob Lepelletier - Broker - Associate - Keller Williams Realty - Alexandria/Kingstowne Office (703) 310-7880
0 votes Thank Flag Link Thu Feb 14, 2013
Everything in most States is done on paper:
It sounds like the LISTING PRICE was not determined nor approved by the Bank:
You should have your Agent do a CMA to determine the Market Value; it is probable that the Bank did.
4 months is not especially long; but it is cause for concern. What does the Listing Agent say?
What we are seeing, (all over) is the Bank asking Buyers for their "best and final" offer; rather than Countering.
Communications being what they are today, (poor), SILENCE is usually an answer.
0 votes Thank Flag Link Thu Feb 14, 2013
I tell my buyers writing on short sales, "there is nothing short about a short sale". It sound like you have been waiting around 3 months and most short slaes take 4-6 months to get a response. It is not uncommon though to take 9-12 months to settle.
The bank does not determine the asking price, the seller with advise from the listing agent determine a list price. The bank typically sends out someone to evaluate the home for fair market value and if they determine they want more they will ask for more. If they don't get what they think is reasonable they will not approve the short sale.

Hang in there in the world of short sales you have not been waiting an unreasonable length of time.

Good luck.

Kathy Stark
Weichert, Realtors
703-201-9656
0 votes Thank Flag Link Thu Feb 14, 2013
Also, the listing price of the home is not necessarily what the bank determines the house to be worth or what they will accept in the transaction. In most cases, the bank comes back with a counter offer
0 votes Thank Flag Link Thu Feb 14, 2013
When did your Realtor submit the counter offer? I would guess that it will still be a few weeks until you get another response from the bank. What you are describing sounds pretty normal. Unfortunately, as a buyers agent on a short sale, you agent does not have much control over the negotiations with the bank.
0 votes Thank Flag Link Thu Feb 14, 2013
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