An "approved price" could mean that the asset manager at the bank has agreed they would accept that amount for the home. HOWEVER, that offer may still need to be approved by the investor behind the scenes; PMI (mortgage insurance) has say in the approval; and if there is another lien (2nd morgtage) then what they are willing to accept gets negotiated.
The approved price has only been approved by one of several decision makers, and until the rest of them agree, you do not have a short sale approval at that price.
All the Best,
The price that is listed is determined by the listing agent and the seller. The only way it will be different is if it says in the description approved price. But I wouldn't go by that either. I had an approved price on a short sale, then it took another 60 days to get a new offer and the bank wanted more money than they originally approved.
When making an offer the bank has to take into consideration several factors, so they are the ones that will ultimately decide what they are willing to accept for the home. They could ask the seller to sign a promissory note or come up with cash. They could ask the buyer to come up with more money. Each short sale is totally different depending on the circumstances. Some short sales have more than one lender. It gets processed by the short sale processor then it must go to the underwriter for final review. It can get stuck in any stage of the process and could take 30 days or much longer to even get an answer from the bank.
I have closed on many short sales with sellers and buyers. It is a stressful process, but if you have time to wait you can sometimes get a great deal. Each situation is TOTALLY different.
Tammy Hayes, Realtor
RE/MAX Palm Realty
Below is a Question and Answer I had with a client regarding short sales. He asks several pertinent questions, and this gives some insight into what is going on for so long when "nothing is happening" on a short sale approval.
All the Best,
Author of REAL ESTATE CSI: CONTROVERSY, SECRETS & INSIGHT (availalable early 2013)
American Realty of Venice, Inc.
700 W. Venice, Ave.
Venice, Florida 34285
Foreclosures most often close above asking price, and a few below. Of course this is do to the competition on foreclosures, which is not that obvious on short-sales because they only present one offer at a time. Hope this helps.
1. DON'T JUDGE A GOOD DEAL BY HOW MUCH YOU CAN GET OFF THE LIST PRICE BUT RATHER BY THE VALUE YOU RECEIVE FOR THE PRICE
2. IN THIS MARKET, IF YOU WANT A DECENT HOUSE YOU HAD BETTER OFFER OVER THE SALES PRICE IN AMNY CASES
3. THE LOAN APPRAISAL IS NOT GOING TO LET YOU PAY TOO MUCH
In a short sale, the owners are still the owners, not the "former" owners - they still own the house and they set the list price.... and they accept a contract, or not......it is all pending bank approval...it may take months and never close....or it may close..........
In a foreclosure the bank IS the owner, they already took over the house........and yes, the bank then sets the list price and will accept or reject an offer .
In regard to "no wiggle room" ..I have learned I can't predict what the bank will do.....someitmes it makes sense, and sometimes it doesn't.
So - to answer your initial question...make an offer and find out!
You can neither assume that the Bank set the LISTING PRICE, nor that the LISTING reflects the true MARKET VALUE.
In fact, as your Agent, I would assume that BOTh were false!
I would do a CMA to determine the Market Value, and looking at the recent sales, we would formulate how much you wanted to offer.
The Banks are notorious for not talking to the Homeowner and their Agent; neither are working for the Bank.
You should have the mind-set that the Bank will meet your price, or they can keep it: That is their mind-set!