Home Buying in 33914>Question Details

MN Shadow, Other/Just Looking in 55344

We have been waiting 6 months on a short sale in SW Florida. Will this sale ever be approved or is it time to let it go and move on?

Asked by MN Shadow, 55344 Thu Nov 19, 2009

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Unraveling the Short Sale process can be a real challenge. There are so many factors that can affect the potential success of closing a short sale transaction and why only @25% actually close.
What is your experience and patience (how long can you reasonably wait) as a buyer? What is the listing agents experience in preparing the short sale package? How accessible is the lender in communicating with the list agent? Is the lender local? Each lender has specific requirements that a list agent and seller need to include in the short sale package and have those requirements been met? What other lender requirements need to be satisfied? Have you asked for feedback regarding, among other things, market value and contract contingencies to the process?
Every property has a unique story and no two transactions are ever the same but there are some basic time lines, information and questions associated with these distressed properties that you may want to additionally know or consider as a buyer:
1. Are you in a position where you can reasonably wait any longer for the lender’s approval?
2. Do you understand that the lender will make the final call on terms and price?
3. Do you have the resources to rehab or repair the property if necessary?
4. The value of the property may have changed during the wait for lender approval period. Has the market value increased, decreased or remained the same? You may want to ask for a new CMA on the property.
5. Have you consulted with your attorney regarding earnest money, home inspections and the contingency period for third party approval??
6. Is there an addendum to the contract “subject to lenders approval” should stipulate how long the buyer is willing to wait? If not, you may want to consult with your attorney as to what your options are.
7. How many liens are on the property? If more than one lien, what are they? What is the plan to satisfy all of the lien holder’s?
8. If you wish to move on and purchase another property consult with your agent about your options and your attorney as to if you need to sign “subject to release of prior contract.”
9. Is all of your financing in order? Although the lender approval process can take quite a long time (up to 6 months or more) typically lender’s final short sale approval will provide only days maybe as little as 5 days to two weeks for closing. You will be required to meet the lenders specified closing date.
10. Confirm with your agent and attorney the approximate time line in your state from notice of default to foreclosure. In some states it’s 7 months from notice of default to foreclosure.
11. Communication among all parties to the transaction is essential.
12. Some of the reasons why a short sale may not close: Incomplete short sale package, package not submitted properly, offer too low, buyer not strong enough financially, lender took too long and buyer backed out, inaccurate BPO’s and or appraisal of property was inaccurate and lender has a distorted picture of what the fair market value is of the property, junior lien holder says “no.”
13. Continue to educate yourself and ask questions. There are great on-line resources available.
14. Please remember some Short Sales do close!
15. The choice to move on or not is yours!
MOST IMPORTANTLY, CONSULT WITH YOUR REAL ESTATE ATTORNEY AND YOUR AGENT!! They are the professionals who know how best to represent you and to protect you.
Best of Luck!!
0 votes Thank Flag Link Fri Nov 20, 2009
Sorry to hear about the delays in your contract approval. What you are experiencing is certainly not out of the norm for a Cape Coral short sale. A recent survey about short sales revealed that only 23% of them ever actually close. Here is a link to a blog post about this short sale survey: http://www.gulfreturns.com/2009/08/only-23-of-short-sales-ev…

We are having much greater success closing foreclosure transactions and suggest you may want to look at some foreclosures. Here is a resource to view foreclosure listings in Cape Coral: http://www.greaterftmyers.com/cape-coral-foreclosures.php

Good luck with your search!
0 votes Thank Flag Link Fri Nov 20, 2009
There is an extensive amount of documentation and basic paperwork that is involved with a short sale.
Unless it is all perfect, the lender sends it to the bottom of the pile. I have just been certified to learn the documentation and proceedures necessary, but without stepping on your agent's toes, cannot to anything to help. The best solution is communication with lender, which unfortunately takes time.
0 votes Thank Flag Link Thu Nov 19, 2009
It depends on alot of factors...did the listing agent submit your offer only to the bank or did they submit all offers? Does the seller/owner have one mortgage on the property or two...this is just a couple of things that can cause problems with a short sale getting approved. Depending on the answers to questions such as these it may be time to move on. It also depends on the bank...some banks are much easier to deal with on getting a short sale accepted where others take months.

Terry McCarley, Realtor, CDPE
Remax Realty Team
email: leecountyrealtor@earthlink.net
cell: 239-707-4575
0 votes Thank Flag Link Thu Nov 19, 2009
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