Home Buying in 60706>Question Details

Homebuyerwoj…, Home Buyer in 60706

Knowing that the chances of a successful short sale are slim (5-10%), at which junction of the short sale does it wall apart (on a cash offer)? (eg.

Asked by Homebuyerwojtek, 60706 Sat Jan 30, 2010

seller not signing the proposal, seller hardship declined, house being appraised less than the offer, first mortgage holder, second mortgage holder, etc)?

Help the community by answering this question:

Answers

7
HB,

To be honest, it can fall apart in the beginning, middle, or end.

Sometimes it doesn't matter how well the Realtor put s the Short Sale package together, seller's valid hardship, appraisal/BPO comes in at market value, etc.

You can be assigned a negotiator that is willing to work with you and then they are pulled off the file and you start all over with another negotiator. This can cause further delays and the foreclosure process does not stop.

We've gone through the whole process with "approvals" and at the last minute, the lender/investor throws another demand out. Some of which can be met, some can't.

You can start a Short Sale and it seems like it will go well. Other's start out "rocky" and continue throughout the whole process - you just stay on top of it through the end.

But again, there's no guarantee's that you'll get the home. If you're an all "cash" buyer, it may be best that you go for a "bank owned" or "standard" home so you can close quickly.

Good luck!
1 vote Thank Flag Link Sat Jan 30, 2010
All answers are really good and definitely sadly true however in my experience short sale success is much higher than 5-10 percent. So although can be shakey and you really can be sure of anything until you get the message.... we have confirmed, I think your chances are much higher than 5 10% if you have a genuine hardship and a purchase price that is within the comps.

Kindest Regards,
Dianne Hicks
Web Reference: http://www.di4homes.com
0 votes Thank Flag Link Sun Jan 31, 2010
I agree with much of what has been said. As a real estate attorney my office handles a number of short sales, and there are just so many angles, that you have to take it one step at a time. However, what I have started to see lately (particularly on higher priced homes $750,000 and up) are that the appraisal (or BPO) of the home is coming back for more than the Buyers are willing to pay. So part of the process of the bank accepting a short sale offer is that they send out an appraiser to assess the value of the property - or what it should sell for (sometimes they send out a third-party realtor who does a BPO or Broker Price Opinion). If this BPO or appraisal is higher than what the purchase price of the property current is at, then the bank will generally not move forward. Banks what the purchase price to be at or near market value.

That being said, the other point I would like to caution everyone on (at least in Illinois) is the use of non-attorney negotiators for short sales. I have spent a decent amount of time cleaning up messes left by third-party programs who move forward and get a short sale approval for a seller, then they come to me to complete the transactio (yes yes - everyone out there from other states - we here in Illinois, in the Chicago-land area use attorneys on residential buys and sells). In many of these instances before going to the bank these so-called negotiators do not check title to the property, and therefore do not know of other liens that might effect the bottom line of the proeprty and therefore the amount that they can get to the bank for the short sale. Real estate tax liens, other mortgages, judgments from divorces, etc. The attorneys in this state that do short sales negotiations check these things BEFORE going to the bank for a number. I know it is a round-about answer, but if the bank thinks they are getting one number, then there turns out to be another lien on the property, the deal will fall apart then as well.

There are many real estate attorneys in Illinois that do short sale negotiations, and they charge the same way a neogitaitor should - they only get paid if the deal goes through and the fees come out of the proceeds of the sale, so that the seller does not have to come out of pocket for that expense.

Hope that helps,

Paul Garver
Web Reference: http://www.hg-legal.com
0 votes Thank Flag Link Sun Jan 31, 2010
Actually there is no standard, a short sale can fall apart at any time--if you are looking to buy a short sale keep in mind, the bank(s) want to get as much money back as possible.
0 votes Thank Flag Link Sat Jan 30, 2010
First chance is when you find out that the loan was oringinated at one of the 97 lenders that were closed last year that now have an FDIC loss share agreement on their loan portfolio with the bank that took them over.
Web Reference: http://www.Find1Home.com
0 votes Thank Flag Link Sat Jan 30, 2010
This is the issue with short sales. It could fall apart at any of thoses stages. Cash maybe king but not always the answer to getting the deal done. Before I submitt an offer for my clients I contact the seller's agent to determine if they have dotted all the i's and crossed all the t's on the paper work and if they have connected with the bank.

If all the questions are answered to my clients satisfaction I then proceed with the offer. I explain to my clients that even though everything appears to be in order it still may take 2 to 6 months to get the deal closed.

Short sale does not mean short time to purchase. If you do not have time on your side to move I do not recommend pursuing short sales.
0 votes Thank Flag Link Sat Jan 30, 2010
There is no one part it falls apart. At any point things happen to make them fall apart. I had one where we were going to closing and the bank decided they wanted an extra 20k in order to close. The buyers didnt want to do it, deal fell apart. Weird things happen all the time with short sales. I hope you get it. Good luck!

Matt Laricy
Americorp Real Estate
Brokers Associate, e-PRO
mlamericorp@aol.com
708-250-2696
0 votes Thank Flag Link Sat Jan 30, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer