Home Buying in Danville>Question Details

Tam, Home Buyer in Union City, CA

We bid 705k on a short sale asking 699k and the buyer accepted. There was one other offer. Also to note, the house had been listed for nearly 90

Asked by Tam, Union City, CA Wed Jun 23, 2010

days and dropped from 740k to 720k then 699k. Now the offer has gone to Bank of America for review and we hope an approval. Zestimate estimates the house at 830k. So my questions are:
- do you think the bank islikely to accept our offer?
- in general, how long can it take for the bank to get back tom us on the offer?

Oh yes, and we have no conditions on the offer and put in the sale as "as-is". Thanks!!

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It depends on whether or not the property was owner occupied or an investment property. I am going to assume, based on the price point and locations, that it was owner occupied. The lender has to put the borrower through several vetting processes before they will approve the short sale; first and foremost, they have to determine if they can keep the borrower in the home with a loan modification. BofA recently announced a principal reduction program to help keep borrowers in their homes and alleviate the influx of short sale applications. In the interim, your offer will be on standby. This is to allow the bank to determine the hardship and find any possible workout solution. If there is no way to accommodate the seller (borrower) staying in their home, you are looking at about a 3 month process before the bank will come back with a short sale agreement. The HAFA short sale program includes determining up-front what the market value for the home is and that is how much the bank will accept as a short payoff. The other alternative is that if it is more feasible to the bank, they may offer the seller a HAFA deed-in-lieu in which the bank will take the property back and your offer would not be considered. BofA has beefed up its short sale staff because of the sheer volume of short sale but the number one goal is to keep the borrower in the home, not the short sale. One good thing is that the listing agent should know, from experience & training, whether there is any chance the borrower can stay in the home. If there isn’t, the listing agent might be able to offer more of a realistic idea of the probable outcome of their seller’s options. My advice would be to make sure your agent is in constant communication with the listing agent and pray that the listing agent is following up with BofA. In the event that the deal is approved, you will have about 45 days to close.
0 votes Thank Flag Link Wed Jun 23, 2010
Tam,

It sounds like you have a very good chance of getting your offer accepted. With an estimate of $830k, my guess is you might be in the Monterossa area??? Anyway, if the Listing agent is set-up and approved through Equator (B of A's) third party processor, your transaction will probably take 90 to 120+/- days. However, historically B of A has been one of the slowest to process, so keep your fingers crossed... If there's a second deed of trust, there's another layer of processing. Good luck with your transaction and let me know if I can answer any other questions. Danville's a great community and I'm sure you'll be happy with your new home.

Doug Ledeboer
http://www.dougledeboer.com
1 vote Thank Flag Link Wed Jun 23, 2010
Hi Tam,

Did you purchase the house successfully? Can you sharon the story? I am interested in short sale house.

Thx
0 votes Thank Flag Link Fri Feb 11, 2011
Here's one real world experience.

I had a client who wrote an offer on a Bank of America short sale 12-26-09 and the bank accepted it on 3-14-10.
0 votes Thank Flag Link Thu Jun 24, 2010
Hi Tam,

Bank of America has revised their Short Sale process, which doesn't mean it has been shortened or streamlined, but are now managing all the paperwork online via the Equator system. Each step of the process may take several weeks. The listing agent must be vigilante about communicating with the Customer Service or Negotiator on a weekly basis. Bank of America is known for ordering appraisals on their short sale properties in lieu of a BPO. Also, BofA will order new BPOs/appraisals if the final review step is 60 days after the last value of the property has been made.

If I were the listing agent, I would follow up periodically with the Negotiator and send the latest comps for the property and the area. In this fast changing market, values could be different even within a 6-week period.

If you really like this house, I think you'll wait... But as someone else mentioned, have a Plan B or other options. Don't get discouraged as every bank has different processes and deadlines for their Short Sales. Bank of America may take as long as 3 to 4 months to approve your offer.

Good luck and hope you get this home -- Danville is a great place to live!
0 votes Thank Flag Link Wed Jun 23, 2010
The fact that the short sale listing didn't get anywhere at the higher list price should paint a picture that your offer is fair, That's a step in the right direction.

Now the true test is how long are you willing to wait it out. As you have already read, Bank of America is not the easiest bank to deal with when it comes to short sales. Pray that you get a BPO (broker's price opinion) done by a local expert who can fully justify the price based on current market values.

In the meantime, if I were you, I won't put all my hopes into just this one property. Keep looking -- if there's another property that comes up for sale that may meet your needs, is competitively priced, and can close sooner, explore that option.

In short sales, there are absolutely no guarantees. By the way, I hope you're not basing your valuation only on Zestimate. Your realtor may be able to give you a more accurate valuation.

Good luck!
0 votes Thank Flag Link Wed Jun 23, 2010
Hi,

The final decision for approval rests with the owner of the note. Bank of America owns some of their notes, but the majority of loans serviced by BofA are actually owned by investors. If BofA owns the note, they will make the final decision, and that process can be faster than an investor owned note. If the owner of the note for this short sale is an investor, it is this investor who will decide whether to accept or not. Bank of America will present the data and make a recommendation to an investor.

The time-line for a decison depends upon the package submitted, the individual loss mitigator's organizational skills, the bank's current priorities (which can change), and internal politics. If the seller has been diligent in their submission of all documents needed for the bank to review, that will help expedite the process. If the listing agent is experienced in short sales and strong in follow through, that will help. Your offer, as described in your post, seems that it would be attractive. Now, fingers crossed.

While BofA can take a long time, so can other banks. And, BofA has handled short sales efficiently and quickly......but one shouldn't expect that to be the case, for they will set themselves up for disappointment. Ask your agent to provide you frequent updates....and keep your fingers crossed.
0 votes Thank Flag Link Wed Jun 23, 2010
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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Bank of America is infamous for stalling short sale approvals. It was the case 6 months ago, when one of their negotiators could not produce neither approval or decline after 5 months (!). However, that was on a property located in Illinois. Perhaps they changed their ways since last year or they streamline short sale approvals in foreclosure-prone areas. Regarding the price - the logic (if there is any) behind banks' approval is to make sure they are getting more for the property under short sale scenario vs. foreclosing on it and selling it as REO or bank-owned property. If there were other, similar age and size REO homes sold in this area around $650,000 or less, your chances should be good. Good luck, you'll need it!

Peter Kedzior, REALTOR
Arlington Heights, IL
0 votes Thank Flag Link Wed Jun 23, 2010
It can take months for BOA to get back with an answer. You will have to have patience. They will do a BPO (Brokers Price Opinion) on the property most likely. If your offer does not work for them, they may reject it out right or they may counter. If they are ok with the offered amount, they could accept it. A lot will depend on how much is owed on the property and where the offer fits in with the banks numbers. Good luck
0 votes Thank Flag Link Wed Jun 23, 2010
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