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foxsanta, Home Buyer in Foxboro, MA

Short sale info

Asked by foxsanta, Foxboro, MA Thu Oct 11, 2012

Does a buyer involved in a short sale need to get a commitment letter from their bank before the sellers bank gives the approval for the short sale

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6
Good evening foxsanta,

Different Lenders have different requirements for their approval process on a short sale. More often I am asked for a Prequalification Letter and that is usually sufficient. See if the short sale Lender will accept the Prequalification Letter from your Lender. To ask for a loan commitment from you is a rather onerous requirement if the short sale is not pretty far along in the approval process (BPO and Appraisal completed and ALL documents submitted by Seller). If they are asking for the commitment and they have just begun the process, you might consider walking away because the negotiator for the Seller and/or the Lender might just drive you out of your mind.

Trevor Curran
NMLS #40140
1 vote Thank Flag Link Thu Oct 11, 2012
In most cases it would be so. The bankers have already lost out the first time when they advanced the loan. In all probability, they are going to take a hit for the difference between the amount owned and the amount that will be recovered through short sale. Therefore, they would insist on some type of reassurance that the sale would now go through. This could be in the form of a commitment letter or a down payment to be held in escrow before they give their approval.
0 votes Thank Flag Link Mon Dec 2, 2013
It will help get a response from the owner of the note.
I would contact a local real estate professional to save time and money.


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0 votes Thank Flag Link Mon Oct 29, 2012
Forget about the bank.

Any broker representing you and any broker representing a seller should both have proof of your ability to perform.

I'm sure if you were selling you would want the same knowledge and expect it of your agent to have it.
0 votes Thank Flag Link Thu Oct 11, 2012
They had the proof of abilty to preform.
Flag Thu Oct 11, 2012
A prequalification or pre-approval letter, bank statement (if cash offer), etc would help your offer get accepted over other offers. The seller and their agent should coordinate the rest of their requirements for their bank to approve the short sale aka forgive the difference...

If you are looking for a buyer agent to represent you in this transaction, we would be happy to help!

Sandy Johnson, Broker
http://www.RESandy.com
603-557-3683
or email me at
RESANDY@YMAIL.Com
0 votes Thank Flag Link Thu Oct 11, 2012
Hi foxsanta,

I have seen the banks that hold the notes on these distressed properties (in your case a short sale) ask for the prospective buyers to demonstrate their commitment to buy by asking them to put upwards of 5% into escrow....before beginning the short sale approval process.

To ask for a buyer to get a full mortgage commitment, including paying for an appraisal, however, is in my opinion extreme.

I don't even know if YOUR lender will provide a mortgage commitment without having an approved short sale. Unless I am missing something, I don't see that you could possibly provide a commitment before receiving an answer to the short sale.

Good luck and please keep us posted!
0 votes Thank Flag Link Thu Oct 11, 2012
We had put 15% down.. on a 300,000 sale. It was in the P&S the seller had put in to have a commitment letter 30 days after the P&S. was signed. I had not seen the P&S, the Buyers realtor and the lawyer had missed it. I had my other half involved. Once our realtor had asked for the letter, I read the P&S. I was not happy.
Flag Thu Oct 11, 2012
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