Home Buying in Los Angeles>Question Details

Jo, Home Buyer in Los Angeles, CA

We got counter offer of short sale we want to buy. We accepted. How long before we get an approval letter for accepting their counter offer?

Asked by Jo, Los Angeles, CA Sun Aug 1, 2010

What happens if FHA doesn't agree with the banks BPO? We are so nervous about loosing this house..

Help the community by answering this question:


Hi Jo, Congratulations on your accepted counter. Do check show countered you. The Seller or the Bank? You actually need the final approval from the bank. If the bank has already approved the price of the short sale you may be able to close in 30-60 days. If the Seller's loan is with Wachovia, World Savings, Well's Fargo....and a few others, the Short Sale process may be a little more organized and resolved in a shorter amount of time. If the bank has not approved of the short sale you could be waiting a while. Sometimes its over a year before buyers receive word of a bank approval. During this time the bank can ask for items or information from you the buyer and the seller. Hang in there. It's a tough process. Unfortunately its the way Short Sales are run.
0 votes Thank Flag Link Thu Aug 12, 2010
Hi Jo. The whole process is and will be nerve wracking so remember to keep your cool and take a deep breath. One important thing to remember here is like the old song says, " there are so many fish in the sea." In other words, if you don't get this house, don't worry about it there are many other fine homes out there. As a Fha lender, the Fha appraisal is here to protect you and us from over paying on a property. You are only putting down 3.5% to maybe 10% of the sales price, we are on the hook for much more.
From what you are telling us you seem to be in the final stages. What is really important is are you preapproved? Did you get a DU preapproval? I have been a Fha lender for 20 years if I can be of assistance, please feel free to call me.
Joshua Lee
0 votes Thank Flag Link Sun Aug 8, 2010
Hello. It all depends on who you got the counter offer from. If you wrote an offer and the seller gave you a counter offer, then you are still in the beginning. The seller is cleaning up the offer before submitting it to the lender. This also may have tax consequences to the seller, so they are trying to limit their liability.
However, if the counter offer was from the lender, even though you accepted, this is only to get it to the next stage... there are a number of reviewers that will look at this file as it moves through towards shortsale and in the very end the investor at the end of the line can unapprove a previously approved fee on the settlement statement and again it will come back to the buyer to cover the cost. This can happen even on the day of closing. I just had a short sale that was fully approved and on the day of closing, the closer said that the final hud was not going to get approved because the investor would not pay a certain fee. After the buyer accepted that, there was another fee that was not accepted... this went on 4 times before we got final hud approval. If you look at the approval letter, it will usually have a line that this is an approval but still requires final hud approval prior to closing.
On to your second question... if fha does not agree with the bpo... this is 2 different things. The bpo is for the lender to determine market value and use that to figure out how much they will net (loose) if they go with your offer amount less costs. FHA is (I am assuming) your type of loan and they will perform their own appraisal after when you get your approval and open escrow. They will then be determining if the property is worth what you are offering. The bpo and fha will not be sharing reports. Happy to assist.
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills East
9388 Santa Monica Blvd, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0670 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
0 votes Thank Flag Link Thu Aug 5, 2010
Hi Jo:

By now, since you are getting counter offer from the short sale lenders, the listing agent (or whoever is negotiating the short sale for the sellers) should have direct contact with the short sale lender's negotiator. The process should be really fast.

On the other hand, depending on how the short sale approval reads, by accepting the counter offer, you might be able to go directly into escrow.

Really depends on what the process is and how the short sale (or counter) reads.

Check with your Realtor, he/she should be able to advise you on that.

On your second question, if the appraisal comes in short. you will have to present that appraisal report to the short sale lender and re-negotiate. It might be a problem, especially if you are getting credit back (meaing the purchase price can be inflated).

Good luck!
Sylvia Barry
Marin Realtor
Web Reference: http://www.SylviaBarryRE.co
0 votes Thank Flag Link Sun Aug 1, 2010
Sylvia Barry,…, Real Estate Pro in Marin, CA
Your realtor should definitely be answering these questions. However, it depends who is countering you. If the seller countered you it still has to go to the lender. In any event, there is no telling how long this could be and there is no guarantee of a successful outcome. My last short sale took around 5 months for final approval. The FHA appraisal is its own appraisal and does not take anything into consideration except comparable properties in the area. You should continue to look for other properties while you wait as you may find something you like better.
Web Reference: http://www.homejane.com
0 votes Thank Flag Link Sun Aug 1, 2010

How long before you get an approval? Truth is…we all wish that we could answer your question. Not only for you but for everyone who is buying a short sale property. I just closed one for a buyer client. The offer was written last November. Approval from the lender came in June and we closed in 30 days. That is not an unusual story. Many go more quickly. Some take even longer.

Your lender will do an appraisal for your FHA loan. If the amount of the appraisal is lower than the banks approval amount, more negotiation will have to be done.

Good luck on a nerve wracking process.
0 votes Thank Flag Link Sun Aug 1, 2010
Whoa, 2 questions here. After you accepted the counteroffer (by signing it); they will acknowledge its receipt by signing and returning it again. However, as a short sale, the bank can change terms midstream anyway. As for FHA and BPO differing, same thing. If they come back to you, be prepared by knowing what the house is worth and what you'll pay. You should be in first position to stay on the table and get the deal. (Mine did.) Good luck.
0 votes Thank Flag Link Sun Aug 1, 2010
Your buyers agent should be assisting with all these time lines.

IF bank accepted the short sale they would return an executed agreement

FHA does their own appraisal HAS nothing to do with the lender BPO.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Sun Aug 1, 2010
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