Tina Evans, Principal Broker
Thanks again; first time home buyer here with (obviously!) a lot of questions! :)
b) it'll take that 45-90 (sometimes longer) time frame before they actual get to closing.
A few things to think over. Hope this helped. Great question.
Tina Evans, Principal Broker
I agree with the other answers. The bank has the final say so on whether or not they want to accept the offer, but the Seller must approve also. Usually in an short sale, the offer is given to the seller first. The seller can counter, reject, or accept. After an offer is accepted with the seller, then the offer is sent to the bank for its approval. At which point the bank my counter, refuse, or accept. Until you have both to accept it can't happen.
Think about this for a moment. A SHORT SALE occurs in a majority of instances where the seller (1) is SHORT concerning past payments, (2) sees they will be SHORT â€” medical reason or lost a job (3) or is forced to move and the home JUST WONâ€™T SELL. In that regard, their short (or will be). Now talking about a SHORT SALE and a SALE actually being a SHORT SALE â€œmayâ€ be different. Be sure you know â€” for sure.
As Mike so eloquently stated, the correct use of the term is best defined as he noted: The bank has agreed to take less than the outstanding balance of the mortgage (seller is probably â€œup-side-down). So the BANK is going to get less, right? Now, say YOU were the bank. How would you feel about getting less? Ahh. The problem. Dealing with (working with) a bank under these circumstances is RISKY for the agent (at least frustrating, free wheeling, often lacking rules and what might seem like fairness). While certainly not ALWAYS the case, it is quite common for the BANK to play different groups off against each other (if there is a demand for the property). It CAN become a brutal negotiation with seemingly minimal communication â€” like the rules are thrown out the window. Agents can put forth a ton of effort only to end up with nothing at the last moment (for themselves or for their clients). In many cases (not all), the rules of real estate (time controlled and state law guided) seem to take on a whole new look.
Look at it this way. Theoretically, you get a home for a fraction of what it is potentially worth (something for nothing). It is that mentality that got us all into the mess we are now in today in the US (nothing down, no proof of earnings and the same loan as someone with a great credit rating able to put 20% down on a conventional mortgage). If it was so easy, everyone would be doing it. Are they? Itâ€™s risky. The wild west. Be weary.
Here area a couple of LINKS on short sales to bolster your confidence. Draw your own conclusions.
In a short sale, the bank has agreed to take less than the outstanding balance of the mortgage. Unless the seller has agreed to pay part of the difference, the bank has the final say as far as the lowest price they will take.
The seller may be doing the negotiating, but they'll need bank approval to accept any offers.