Home Buying in North Port>Question Details

Dmc, Home Buyer in North Port, FL

Offer pending Short Sale approval Negotiator told agent he had a verbal ok from the Bank. Is this binding?

Asked by Dmc, North Port, FL Wed Nov 30, 2011

Offer pending Short Sale approval
Negotiator told agent he had a verbal ok from the Bank.
We now hear Docs are with Bank for reapproval as Seller not delinquent on payments.
How should this matter?

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Dawn Barrier 702-812-4550’s answer
Verbals are never guaranteed, but sometimes they do pan out.

I've had several short sales go thru where the seller was not late on their mortgage payment, but they had other issues going on that could show possible future default, things like job transfer, military relocation, divorce.

As mentioned below if a sellers hardship changes, that can also change the approval terms.

Each short sale is different and unfortunately there are still a few lenders out there who will not do the short sale if the seller is not late, or if they agree to they will ask for a large cash contribution or promissory note.
Web Reference: http://www.VegasDawn.com
0 votes Thank Flag Link Wed Nov 30, 2011
BEST ANSWER
Dmc:

Seller has to prove financial hardship. I recently represented a buyer for a short sale on a property that had 3 previous buyers back out. Each of the previous times the bank gave a fairly quick response to the offer price. Something happened with the seller's financial situation at the time of my buyer's offer that caused the bank to re-evaluate the entire process, which took 4 months.

Realistic expectations on a short sale means that an offer does not always equal an agreement and a closing.
0 votes Thank Flag Link Wed Nov 30, 2011
The seller must approve the purchase offer before it gets submitted to the bank. The bank may come back with a counteroffer or reject your offer completely even if they have approved the short sale.

Short sales take a long time because the bank has to review it and they are back logged with many short sales and don't have enough coverage to complete them in a timely manner. The bank typically is willing to work with the seller and buyer on short sales to help avoid foreclosure. The bank can ask the buyer to pay some of the liens or HOA fees. Some lenders will only pay up to a certain dollar amount and ask the buyer to pay the remainder or there is no deal. Each circumstance is totally different. I have one buyer that has been waiting 9 months and still no answer.

The bank may want the seller to sign a promissory note for the deficiency between the amount owed and the amount the home is sold for. The seller cannot receive any funds from the sale. The property may be foreclosed upon during the short sale process. Do not expect to receive information on a regular basis, as there may be weeks that go by without news. The bank will want to do a BPO (Broker Price Opinion) and/or an appraisal to determine the price.

Be patient. This is the best policy.

Tammy Hayes, Realtor
Green Lion Realty, Port Charlotte, FL
0 votes Thank Flag Link Wed Nov 30, 2011
You would always hope the servicer on the short sale word be bound by their promise but the truth is that unless it is in writing, the promise is unenforceable. Also, there could be an "approval" with conditions placed on the seller that they cannot/will not do....like sign a note for the balance or a portion of the balance etc etc....

Good Luck :)
0 votes Thank Flag Link Wed Nov 30, 2011
I find it hard to believe that the Bank would do a Shortsale when the Homeowner is not delinquent!
Oh well.
You need to relax, lay back, and quit reacting to everything:
A Shortsale is like watching the grass grow, or waiting for a volcano to erupt.
You're stressing yourself for something that you have no control.

And, yes, a verbal contract isn't worth the paper it's printed on.

Good luck and may God bless
0 votes Thank Flag Link Wed Nov 30, 2011
There are many layers of approval in a short sale, and you don't have anything until and unless you get them all.

The seller has to qualify for a short sale; the bank has to approve the sale (price and terms after they obtain broker price opinions and/or appraisal); the bank investors have to approve the short sale. There may be several of them, and they all have a final say, although you will likely never know who they are or what they think.

Only after all of those approvals have been met will the seller receive the written approval letter.

Are you working with an agent to guide you through the process?

Check out our Facebook page for more information on the market and fun things to do in Southwest Florida.
http://www.facebook.com/skgflorida

I also have a few blogs on my Trulia profile that may be of use to you when considering values on homes. That information is pertinent all across the country.

All the Best,

Jim Sweat, ABR, CRS, GRI, CDPE, e-PRO, ILHM
Realtor
Sandals Realty http://www.ExplainShortSales.com
941-306-7384
Team@JimSweat.com
Web Reference: http://www.JimSweat.com
0 votes Thank Flag Link Wed Nov 30, 2011
Verbal OK is simply unenforceable. Unless the owner receives an approval in writing, you cannot do anything except waiting.
Good luck!
0 votes Thank Flag Link Wed Nov 30, 2011
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