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Raymond, Home Buyer in Tampa, FL

Short Sale Offer - Lender is asking for updated preapproval letter?

Asked by Raymond, Tampa, FL Wed May 27, 2009

We put an offer on a shortsale back in March with a preapproval. Our offer was about to expire so we signed an extension a few weeks ago. Now the negotiator is asking for a more recent preapproval letter (past 2 months). Does this mean they are close to accepting our offer? Or, are they just going through the motions?

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Hello, again, Raymond!

If the appraisal and/or broker's price opinion have been done, the bank will decide on a price they will accept based on those figures. If those values are more than 5% apart, they may order one or more additional appraisals, before they decide on a price. If your offer is considerably less, it is possible they will not respond, but in my experience, they will advise of what price they are willing to accept. If there are multiple offers, they will probably choose the best offer overall from the available choices. It is possible they will not accept an offer from the ones that have been submitted, but will ask for all buyers to submit their "highest and best" offers, before they choose.

Hope this helps.

Dianne Scott
Web Reference: http://www.DianneScott.com
0 votes Thank Flag Link Sat May 30, 2009
Raymond, yes banks are overloaded with short sale offers, BUT you should not have wait since March. In my opinion, the bank is not taking your offer serious because all you have is a Pre Approval letter. This honestly doesn't mean anything to the bank, because you have not gone through the actual loan process and submitted documentation. If you are serious about buying, you need to do this and get a Written Comittment Letter . This will give you the NEGOTIATING power you or your realtor needs! My firm can typically give you a Written Commitment Letter 48 hours after we have processed your loan application. Hope that helps. Folguin@americahomekey.com.
0 votes Thank Flag Link Wed May 27, 2009
Most of the asset managers have the records and information in a computer and it can be found witha few key strokes. Yes the have a paper file mostly for backup. I get the feeling the a lot of the time wasting here is a stall that a new and higher offer will come in in the mean time. All the research and BPO's should be started from day one so that when an offer is put on the table it can be compared with the BPO and other information to come to a quick solution " Deal or No Deal". Again I feel that the reason is two things here , first the bank want to save money and not spend a penny until an offer comes in. They are then priced to high and the offer never come in. Second the staff to collect this information is over loaded and this step takes weeks not days to get back to the person who reviews it. The number of brokers approved to do the BPO and other paper work is a very small percentage of the agent out there.

I think the bank should go forward with the deal and let the lender take the latest information to make the loan. The Seller is not going to be the lender 99% of the time so who care if you qualify, they should on worry that the closing happens. This also points to the fact the the seller has not done any work at this point and want to make sure you will qualify before spending a penny on this case. If you qualify or not the lender is the one who should be concerned not the seller. If the bank wants the prequalify letter before so that they do not remove the house for the market of potential buyer to early, it should of been do back in March when the offer was first placed on the table with a good prequalify letter.

Oh yes everyone before me is correct if you want this house you need to play ball with the bank and get them to sign on the dotted line. Sorry but that is the current maret we are in.

Chuck M
0 votes Thank Flag Link Wed May 27, 2009
Hi Raymond,

You're closer to finding out an answer. The bank is simply looking to make sure that you still qualify for the property. Many things can change financially for a prospective in two months. So do not be afraid to secure an updated pre-approval letter for the bank. Good luck!

Matt
0 votes Thank Flag Link Wed May 27, 2009
in your experience, would they normally counter offer after such a long time or just accept?
0 votes Thank Flag Link Wed May 27, 2009
Hi Raymond,

Since you put your offer in so long ago, at least you know you are that much closer to getting an answer. We have been seeing an average of 1 to 3 months from submission of the package to approval of a price the bank is willing to consider. If the property is being handled by a Realtor, they should be able to contact the negotiator to get a ballpark estimate of where it is in the process. Otherwise, have the owner do this for you, if you do not have access to that person. If the package, including the broker's price opinion, have been submitted to the bank, and if the appraisal has been completed, there is a good chance it has either been assigned, or is close. From there it depends upon their caseload. They may have 50 files or 1500 and they just have to work their way down to it.

Best of luck to you!

Dianne Scott
Web Reference: http://www.DianneScott.com
0 votes Thank Flag Link Wed May 27, 2009
Yes, closer. Any activity means they are moving toward a decision. Good luck!
0 votes Thank Flag Link Wed May 27, 2009
But in your experience, does that mean we're any closer?
0 votes Thank Flag Link Wed May 27, 2009
In a short sale, you need to give them what they want because they are in control and you are just a number in line for a good deal.
0 votes Thank Flag Link Wed May 27, 2009
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