Home Buying in San Francisco>Question Details

Aspi, Home Buyer in san francsco, ca

Short Sale, bank's response to an offer?

Asked by Aspi, san francsco, ca Mon Mar 10, 2008

What form of response should you expect from the bank on an offer for an "already approved" short sale? Do they normally give you a formal written response or could it be just verbal and informal? In case their respponse is informal, should you ask them for a formal written one? Should you also expect a counteroffer from them?

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Ahh short sales...I have found that most banks don't or won't give anything in writing until the end.It would be nice to have everything in writing right up front so your buyers can sleep at night!! But this is not the case most of the time.I totally agree with the professional that said don't consider it closed until it RECORDS!

I think the banks hold back on anything in writing hoping that the next offer in will be the "golden one"....You know the next offer with the purchase price $50k higher....and then they woke up!!
Web Reference: http://reddingbroker.com
0 votes Thank Flag Link Sat Mar 29, 2008
I am a recent listing agent for a short sale in san francisco. After the long process of the short sale I have the following advice: Start low and incrementally increase your offer. Leave room for buyer credits to be applied for things banks refuse to cover. There are many parties who often want a piece of the pie and unless all the lien holders agree, the sale won't go through. So have credits available (reduce it from the amount your buyer wants to offer) to be applied toward unspecified other liens and fees. Then when everyone demands a piece of the pie, you have a place to go without going back to each party for a new approval. Above all, I have learned that you need to be prepared to resubmit your offer. Banks won’t give priority to any short sale until they see activity. So if you have to manufacture it in order to get their attention, that is a way to keep them moving toward an approval. Finally, don’t paint yourself in a corner, hold back credits that you will need later in case new demands appear. Pay attention to the HUD statement, who pays what and how to satisfy all parties. Simply being the highest bidder will not always get you a successfully closed short sale transaction.
0 votes Thank Flag Link Wed Mar 12, 2008

Mike is very knowledgable and an expert in that county. You won't get anythiing in writing from the bank until right before the close of escrow because they are going to wait and see if anything better comes in. If you want to buy short sale house get an agent like Mike who knows the process and the value of the properties. He can apply the correct pressure at the correct points on the listing agent and supply the bank with the data that bankers love. Eventually and it really is eventually, everyone might see things your way and the property is worth what you are willing to pay for it and they won't do any better if the forclose and sell as na REO.
Web Reference: http://www.jedlane.com
0 votes Thank Flag Link Tue Mar 11, 2008
Jed Lane; Fog…, Real Estate Pro in San Francisco, CA
Aspi, Unfortuneately this is getting to be the "normal" way they conduct business. Usually another offer is out there or they are stalling to GET another offer. Was the Bank's "approved" short-sale actually put in writing or was that also "verbal"? We find that many an agent does not know the process and the Lenders really are hedging their bets awaiting the bigger and better offer! If you've got room in your price kick it up a few bucks and see what happens. Many lenders just sit back and wait for YOU to sweeten the pot. Their motivation is almost nil!
0 votes Thank Flag Link Tue Mar 11, 2008
Thanks Michael
I am actually the buyer in this case. I have already made a formal offer thru the seller agents to the bank for their “supposedly already approved” short sale. They came back after a while and said the bank rejected the offer “verbally”. I tell them that doesn’t make any sense, I filled out 10+ papers and went thru the whole process for making the offer and then the bank just verbally responded? You can’t do nothing in this country without something written being exchanged, and now all of sudden everything is verbal and so relaxed? The seller and his agents act very erratically and make contradictory statements. So now they say if you want to make another offer you need to go thru all those 10+ paper and formal process again and I tell them since everything is so informal and verbal, I’ll just make a “verbal” offer, how about that? But that’s a no, no. That’s why I asked about the process, in particular bank’s response to a formal offer. I am not sure if something is going on behind the scenes with them and I can’t quite put my finger on it or things are truly this unbalanced.
0 votes Thank Flag Link Tue Mar 11, 2008
They are very tricky when it comes to "approval". Some will give you a very generic letter not naming the subject property as they use this as a defense to take a better offer up until the last minute of the deal. Here in California they are going to eventually give instructions to escrow for pay-off of the loan. When that happens get in their and close the puppy!! Don't be surprised, however, if the Seller finds an unsecured note for a portion or all of the forgived loan amount!! in other words, don't order the moving trucks, order any appliances or furniture or change your mailing address at the post office UNTIL you here "Your on Record!". So work out an arrangement with the Seller for occupancy (if your the listing agent) or if the Buyer, be ready to give on this issue. Many of these Sellers are moving out anyway or have already. So this might be a mute point! Good luck.
0 votes Thank Flag Link Tue Mar 11, 2008
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