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Stevew, Home Buyer in 33572

Short Sell Restrictions on Buyer

Asked by Stevew, 33572 Sat Jun 27, 2009

We found a great house in Apollo Beach. It is a short sell situation with a motivated seller. Only been on the market 4 weeks. Looking over a list of suggestions to buy a short sell - not happy with two provisions. One, is the open ended timeline that the lender's have. Two is the ability of the seller to still seek bids. Can you put in a timeline (under 75 days) for the lender to respond? Is it reasonable to agree with the seller that the property will not be marketed during the interim? Thanks

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Dav’s answer
I was trying to purchase a short sale home in Apollo Beach Mira Bay. I made an offer and it was accepted and signed by the sellers. My agent was in contact with the listing agent and was informed by the listing agent that my offer was the best. However, after 3 months of waiting I was informed the house was sold to another person at the "last minute" for the same price I offered because that person offered "cash". The bottom line on a short sale is it isn't your house until the closing is final and you have no legal recourse as you do with a conventional sale. The seller can reject your offer at any time in the process even for a lower bid. On the other hand you (the buyer) can walk away from the deal at any time with no penalty.(not sure if you can get your earnest money back) As the above posters have mentioned you need patience and the ability to deal with disappointment if you want to pursue a short sale. In hind sight I should have decided to walk away because the listing agent never removed the house from the listings. In other words they were looking for better offers even after they accepted my offer.
1 vote Thank Flag Link Thu Jul 2, 2009
I am not a first time home buyer - so no $8 K for me :(. Just sold my house in VA in four weeks. I'm willing to wait, just not to escalate my price if other bids come in during the process. Thanks for the help.
0 votes Thank Flag Link Sun Jun 28, 2009
Shortsales are not for the faint of heart, type in shortsale as the keyword on trulia and read through a good number of threads.
0 votes Thank Flag Link Sat Jun 27, 2009
Hi Steve

The fact the home has only been on the market for four weeks may work against you should the listing agent have to argue price with the lender. There should be a Short Sale Addendum attached to any offers submitted and in that it allows for a 45 day response time. Is that realistic - it depends on the lender and how many active files they are working. We have had responses in as little as 30 days and some have taken as long as 120 days. Once the seller SIGNS your offer, the agent is supposed to place the listing in "pending status" and any offers taken after that are to be backup offers. The price the bank is willing to take is based on an appraisal they order, not necessarily the price the agent lists. However, if the listing agent is experienced they may be able to argue and present a case as to why the lender should accept the price offered.
The short sale process can be quite frustrating for you and if you are counting on trying to qualify for the $8,000 tax credit this could prove a problem. You must CLOSE on the home by November 30th. There are a series of questions I usually ask a listing agent in order to qualify how successful the process will be.
I wish you the best of luck in finding your perfect home!
Debbi Tinker
(813) 263-0932
0 votes Thank Flag Link Sat Jun 27, 2009
Steve,

75 days is not long enough for the lender to approve; 4-6 months can be more realistic and there may be more than 1 lien holder on the property.

Once the seller has signed and accepted the offer, the property is to be moved from "active" to "pending" according to our MLS rules".

I insert clauses into the contract to make sure this happens.

Keep in mind, that the listed price of the property may not be what the lender will accept. The listing agent may or may not have listed the property at a true market price.

Remember that the listing agent is representing the Seller of the property.

Be prepared for weeks of no information coming forth from the lender. If you can not be patient with the process, and it is a process, I would suggest you look for non distressed properties.

I hope this works for you. I have lived in the area since 1993 and I still think it offers great value.

Kind regards,

Phil Fowler
Realtor e-PRO TRC ILHM
Keller Williams Realty
813-401-8078
Phil@PhilFowler.com
http://www.PhilFowler.com
0 votes Thank Flag Link Sat Jun 27, 2009
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