Home Buying in La Puente>Question Details

Veronica Cas…, Home Buyer in El Monte, CA

In a short sale, what do banks look at when deciding which buyer to approve?

Asked by Veronica Castillo, El Monte, CA Wed Jun 18, 2008

We are interested in a property that has "other offers" on it. It's been on the market close to 200 days and we were wondering why it is taking so long to sell. Do banks just look at the highest offer or do they look at the credit history and type of loan a prospective buyer has?

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It all comes down to the bootom line - how much the lender will receive. An all cash offer or a high down payment can often sway a decision if contracts are close. Once approved, lenders just want the deal done!
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Wed Jun 18, 2008
The Hagley G…, Real Estate Pro in Pleasanton, CA
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Hello Veroica:
When it comes to short sales, you have to be patient. It can take as little as 2 months (which I have done) to 4 months to go through. The property you are looking at may have been on the market for 200 days, but when did it go into a "short sale" situation? Last week? Last month? More than likely the delay is because the listing agent is still working on the Short Sale Approval Packet, or has submitted it and is waiting for the bank to approve the "Short Sale". By the way, not all Short Sales requests are approved by the bank. Your agent should be able toget answers to these questions for you from the listing agent.

Since there are are multiple offers on the table, do not be surprised if the bank asks for "Best and Final" offer, once the short sale is approved. Because it is a short sale, the bank is losing from the get-go and will be looking to limit their losses. The highest offer doesn't always "win". The bank will be looking at what they will net. eg. Offer, less seller credits, and any thing else that your agent is requesting them to pay for. Which eventually, the bank could very well counter out and/or reduce.

The bank for the short sales doesn't look at your credit history, but will require your credit score which in turn tells them how strong you are as a buyer. They want to know that the sale is going to go through.

Good luck, and congratulations!
Debra Enos
Web Reference: http://www.DebraEnos.com
0 votes Thank Flag Link Wed Jun 18, 2008
Hello Veronica. I work strictly with short sales and REO's and I have seen a trend in which banks look at the bottom line. This means that banks are worried about the amount of money they will be receiving. Short sales are less strict than REO's, by this I mean that you will have to prove your credit worthiness to your agent who then proves it to the listing agent. In most situations on a short sale, the bank does not require proof of funds,FICO, or employment. Now please be advised that short sales are a bit different than REO's due to the fact that many banks want you pre-approved through their lender before you can submit your offer to any REO.

Another factor is your agent, make sure your agent is prepared and can packet your offer to make you look like the perfect buyer you are. The agent has to be a pro at short sales and REO's or the bank will reject.

If you need any help with any of the above subjects please give me a call 323-359-7992 or e-mail me dyannaavila@hotmail.com. I just sold a house in El Monte on Fineview St./Maxson Ave today for $260,000, a short sale.

Good Luck!
Dyanna
0 votes Thank Flag Link Wed Jun 18, 2008
Hi Veronica,
The bank looks at best and highest offer. One reason why the property is not moving is the listing agent is not submitting the "full package" that the bank requested in the first place. But when it comes to acceptance, the best and highest offer are king. Qualifying and Fico scores are the listing agent's repsonsiblity. The bank assumes that the listing agent did his due diligence before submitting your offer.
Good Luck to you and if I can help you in any ways, I am not too far from you.
Laarni
0 votes Thank Flag Link Wed Jun 18, 2008
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