Be very, very careful as an ALL CASH buyer. You absolutely need an attorney to review the Title Commitment and your closing documents. Larry Fuentes is one of the best (and most experienced) Real Estate attorneys in Tampa, you should retain him once you receive a copy of the written approval letter from Bank of America.
Bank of America may not be the actual owner of the mortgage but merely a "servicer" who submits to the actual "investor". Also if there is PMI, the Private Mortage Insurance company must also approve the short sale. And... if the Seller is required to sign a Promissory Note to rep-ay all or part of the loss, that could also make your sale impossible if the seller is unwilling to sign the promissory note at closing.
Short sales go through an online system with Bank of America, Equator.com. Unless the Seller has given you specific written authorization to discuss their account with BofA, you have must sit on the sidelines and hope all parties do what they're supposed to do. It's unfortunate that you put $5k in escrow (never advisable on a short sale) because should the investor on your mortgage (probably not BofA) decide to go ahead and foreclose, some Sellers may try to coerce you to give them part of your $5k. You see, without the Seller's signed consent, the title company cannot release your deposit without a court order!
The beauty of Bank of America's Equator system is it allows the listing agent to upload all requested documents and email the supervisors, the managers and the actual asset manager for the investor that owns the property. Some agents are less experienced than others and my not know how to do this. So, you may want to suggest to your Realtor that she contact the listing agent to see if she has sent emails up the chain of command. That usually moves things forward.
Also, some short sale listing agents are engaging in fraud--especially with ALL CASH buyers. The FBI is investigating the listing agents, Sellers and insider investors "flipping" the property. What happens in these situations is the listing agent and investor work together to defraud the mortgagor by submitting false repair estimates, dragging out the sale of the property to coerce the lender to accept a lower price, and not disclosing they already have your higher offer in hand.
Finally, there is rumour and speculation going around that there will be an August Obama Surprise that will allow owners to reduce their "principal" to current market price. Should the seller get word of this (hopefully his Realtor has already advised him of the rumour) he may decide to no longer do a short sale and keep the house.
Bottom line, you need to keep looking for the right property up until the day you receive the Short Sale Demand (approval) letter from the lender. Your contract should give you the right to cancel up to a week after you receive the approval letter. You must check your short sale addendum to verify your cancellation rights. Just be sure NOT to put up an escrow deposit on a short sale.
Hope this helps.
All the best,
Future Home Realty
I was under the impression all short sales with B of A go through Equator (an automated process usually intiated by the Seller's Real Estate Agent (sometimes the title company will do it, and the file is still assigned a human negotiator). I think the previous answer of finding out who the negotiator for the Seller is important. Here are some addtional answers to your questions:
1. The bank can increase the price, before the final approval. It happened to me, it was $5,000 more-but still well worth it!
2. It is typical to get the final approval letter shortly before closing, especially with Cash. You still have a few weeks. If your closing date comes and go with nothing concrete (something in writing), maybe you should withdraw your offer and start bidding on other homes. Difficult decision, I know.
3. A short sale purchase is anything but typical, but it can be a wonderful opportunity to buy the home of your dreams for a good price. Good Luck! Come back here and let us know where you with your negotiations on Sept. 1st.
Broker, Florida WestShore Realty
I know the frustration you're going through. If you are on Twitter, try sending a tweet to: BofA_Help.
It usually takes several hours to two days, but you should get a response from someone who will try to help you with the situation.
We escalated the file up the bank change of command until we got an answer and someone else forwarded us the approval letter and we closed. It is almost always a communication problem and you just need to get to the right person to handle the file. Since you are the buyer the other Realtor - the one working with the seller - will have to escalate the file The Title Company can assist with getting the answers. The squeaky wheel gets the grease.
It is not a scam it is just that they are so overloaded with files. Most of the timeframes are put in the contract to protect you in short sale. You are at the mercy of the banks timeframes for approval and closing but you can get out of the contract and get your money back if you want to. (I do have to say you would have to speak with your Realtor or an attorney to verify if your timeframes have passed. If the house is worth it, then get the Realtor and Title Company to escalate the file and get you some answers.
You should have your Realtor verify whether the bank has asked the seller to sign a promissory note and the seller is refusing. This will stall the process.
The only other reason I can think of for the long wait is that you actually got a verbal counter from the bank and they are sending the file through the rest of the approval process all the way through to the investors holding the loan. Your Realtor will have to call the listing Realtor and get the facts for you or call the Title Company and see if they know what the holdup is with the file.
I hope this helps.
Steven J. Pahl e-PRO
Keller Williams Tampa Properties