Elbear, Home Buyer in Inver Grove Heights,...

We are paying cash in full for this house that is on a short sale. Why is it taking so long at the bank?

Asked by Elbear, Inver Grove Heights, MN Tue Aug 2, 2011

Help the community by answering this question:

Answers

3
Mary Leizinger’s answer
The difference between buying a short sale and a home from a traditional seller is that it is no longer all about you. The bank is taking a loss and in addition to your qualifications, they are spending time investigating the seller's claim that he cannot pay back the money owed to the bank and are negotiating with the seller. This can be a long process. The more indigent the seller and the closer to the foreclosure process the home, the quicker banks tend to move. If you have to move by a certain time, a short sale transaction may not be for you. Also, don't be surprised if the bank comes back and wants more money from you than the price you negotiated with the seller. In a rising and improving market like we now have, banks will be less negotiable than they were a couple of years ago.
0 votes Thank Flag Link Sun Feb 17, 2013
The key word to your question is 'short sale'. Even if you're paying cash AND giving the sellers their asking price, the bank is still losing money on the transaction. And depending on how the original loan was packaged, it could've been sliced and diced and sold to multiple investors. To sell, the loan servicer would need all parties invested in the property to agree to the sale.

If you signed the short sale documents that are typically used by agents in Minnesota, you should be able to exit the purchase agreement prior to bank approval and still get your earnest money (assuming you have already given your earnest money to the listing agent, which I would never recommend doing without bank approval).
0 votes Thank Flag Link Tue Aug 2, 2011
Your agent can better advise; keep in mind that short sales are by no means fast sales, no matter the method of payment, therefore much patience is needed; some lenders are quicker than others, and much will also depend on the number of liens attached to the property....
0 votes Thank Flag Link Tue Aug 2, 2011
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer