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.
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.
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
Good Luck :)
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
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?
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All the Best,
Jim Sweat, ABR, CRS, GRI, CDPE, e-PRO, ILHM
Sandals Realty http://www.ExplainShortSales.com