The 7 month thing is pretty tough.. sounds to me like the people handling this are not on their game.
The answer is that yes, the bank will need continued updated material to move forward, it is just part of the processâ€¦ The good news is that once the appraisal is done you are pretty much in the home stretch.. make sure your Realtor is in constant with the bank and getting a response. If you have an attorney doing this.. be on top of them also.. most attorneys have their paralegal call once a week.. ( this is *usually* why it takes so long )
Hopefully your Realtor or the listing Realtor has third party authorization and can update you on the progress.. ( either one should have this authorization.. otherwise probably another reason for the 7 months)
Good luck and let us know what happens.
Broker / Manager
SFR (Short Sale and Foreclosure Resource)
Orange Key Realty
First of all if it's been 7 months, then you would need a new pre-approval since they are only valid for 6 months at a time (though through no fault of your own it expired). Then banks always want to be sure your financial situation has not changed.
You may still not be super close, but since the appraisal came back less than the original offer, it's a good bet that the bank realizes they can't get more than the appraisal and will approve the short sale sooner rather than later.
Unforrtunately, with a short sale you a re constanstly asked to resubmit info, it is just part of the process and hard to tell "if u are close.. the same applies to FHA loans.
Francesca Patrizoi, Broker Sales Associate, ePro, SRES
Remember the asking price was already short on what the lender was owed, and the appraisal came in for even less, I perceive this as compounding the problem.
Do you or your agent have any idea if there's a second mortgage, a home equity line, back taxes owed to either the state or the IRS, or contractor liens on the property? Any or all of these may exist and each one of them must agree to the short sale, if one say no there's no deal. If the Seller has any assets that may be applied against the shortfall (401K, Ira's, valuables such as art, guns, jewelry etc, they will be expected to do so and if they refuse then there's no deal. Truthfully more than 80% of all short sales properties simply end up in foreclosure at which point the purchase process is much easier.
I'd suggest you do yourself a favor terminate the contract, and go find a home that you can buy and close on in the next 6 weeks. There's lots of motivated Sellers out there and no one needs the aggravation of a short sale. Most short sale sellers have no idea of the process and most won't take the right steps, which are to sit down with a real estate attorney and their financial adviser and learn what's involved and if their likely to be approved. Most would be better off filing for bankruptcy protection.
Regardless of what you choose to do I hope things work out for you.
Sounds positive that the bank is asking for a new preapp . . . r u close, one just never knows . . . there is no science to short sales. For example, two different short sales, same bank, different supervisors assigned to each. One made it happen, the other just was as diligent and/or experienced.
I would ask your agent his/her perception as they are the one in close communication with the listing agent and/or seller's attorneys and should have a much better feeling as to how far away you are.
Francesca Patrizio, Broker Sales Associate, ePro, SRES
involvement of an attorney that has experience with shorts. I am making that a precondition for involvement.
Yes, press on your agent to press on the other agent for answers/clarification. And yes, if there s a second mortgage the process is more complicated because there are two parties that must settle.
Good luck to you,
Unwavering Commitment to Service
Please see my blog for tips and advice on buying a short sale,
A few more good points were made...ask YOUR agent to find out from the sellers agent if there is more than one outstanding loan. Having two lenders in the equation makes if much more difficult to get the short sale approved.
In your case, because the bank asked for an updated pre-approval, AND the appraisal came back less than the offer price, if there is only one bank involved, I would be leaning more towards you being closer to an approval than not.
Bear in mind that the banks play the "wait...wait..wait" game, then once they approve the short sale it's "HURRY UP!!".... typically as soon as they give the approval they give you 45 days to get your mortgage commitment AND close...so you have to be on top of the situation from now on. YOUR agent should be in constant contact with the sellers agent so you and your attorney are informed the minute the approval comes through since you will have to move fast !!
Is there only one loan on this home? The reason I ask is because if there is a second loan, that negotiation will usually start after they receive approval by the first. Hopefully this is not the case in your situation. I don't want to discourage you, but keep an eye out for other properties that come on the market. You don't want to miss out on a nicer home to only find out the short sale isn't approved. Not all short sales are approved as it is up to the investor. The negotiator needs to be agressive with the bank. Many of the bank negotiators don't understand the concept time is money and the longer they take to get the job done, the more money they are losing the investor. They are also paid by the hour so have no incentive to get the job done. The longer it takes the more job stability. Make sense? Best of luck!
Sadly it is still difficult to say you wheter or not you are at the end of your journey. My client and I are facing the same situation. However I will say you are another step closer and you maybe nearing the end. If the appraisal does not come in for contract the new price must be submitted to the investors who will make the determination. We submitted the appraisal, an addendum with the new purchase price and a revised HUD1.
My feeling is that we have traveled so far down this road it would be a shame not to close the transaction, I'm sure you are feeling the same way.
You did not state if a Trustee Sale has been scheduled but I am sure your Realtor is paying close attention to the timelines.
Good Luck, you may almost be there!