Home Buying in Howell>Question Details

Laurie Rober…, Home Buyer in Toms River, NJ

We have been with buying sh.sale home for nearly 7 mths.appriasal was less than asking price, so it was resubmitted to chase,now they asked us for new

Asked by Laurie Roberto, Toms River, NJ Sun Jun 5, 2011

pre approval mortgage letter and proof of funds,do you think we r close yet...

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John Sacktig’s answer
Hi Laurie,

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 process… 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.

John Sacktig
Broker / Manager
SFR (Short Sale and Foreclosure Resource)
Orange Key Realty
Direct: 732-213-1409
2 votes Thank Flag Link Sun Sep 25, 2011

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.

Good luck
2 votes Thank Flag Link Sun Jun 5, 2011

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
732.606.2931 (24/7)
Web Reference: http://www.PatrizioRE.com
1 vote Thank Flag Link Tue Sep 20, 2011
No telling. This is why I personally will never get involved with a short sale and advise any buyer who asks that they would be better off banging their head against the wall rather than pursue a short sale. The information they've requested is indicative of nothing. Banks waste peoples time constantly.

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.
1 vote Thank Flag Link Mon Jun 6, 2011

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.

Good luck!

Francesca Patrizio, Broker Sales Associate, ePro, SRES
Web Reference: http://www.PatrizioRE.com
1 vote Thank Flag Link Mon Jun 6, 2011
Hi, Laurie,
A new appraisal should not be that different from the first one because it was only done 3 months ago.
Web Reference: http://audreycallahan.com
0 votes Thank Flag Link Fri Sep 2, 2011
Hi Laurie, I assisted a buyer with a short sale that took 8 months to complete - and we were assured that it would be a 3 month deal at the onset. By the time we closed - I couldn't help think that the very good deal negotiated in May was just an ok price by the time it closed the following January. And the frustration for the buyer was so great. But as Scott says, banks have gotten better at processing these transactions and assuming cooperation on the part of the owner, they move along better. One element of success is the
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,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Mon Jun 13, 2011
Laurie this is common as your initial preapproval has expired. It is not common anymore that short sales are taking this long... Unfortanately there is no way to know how close you are, you need to ask some questions to assess where you ar ein teh process. Is there 1 mortgage or 2? Does the home owner have PMI. Havng a second mortgage is often a great deal kiiler as the 1st wont want to give teh 2nd anything and the 2nd wont approve without getting something. With PMI the lender needs to go to them for approval which causes delay. Hopfully the seller has a propfessional negotiator working their behalf, where you have been at it fir 7 mo it doesnt sound like they do. The person negotiating has to push the bank along, it takes daily emails asking if they need anythinhg and i always call at least twice a week. It takes persistance and patience but you can not just let them run through their short sale at their own pace or you will be at it another 7 months,


Please see my blog for tips and advice on buying a short sale,
Web Reference: http://www.ScottSellsNh.com
0 votes Thank Flag Link Mon Jun 6, 2011

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 !!

Good luck.
0 votes Thank Flag Link Mon Jun 6, 2011
Mary has excellent advice. Get all your info, and tell your lender it's a short sale. If the bank approves, in most cases you'll be given just 30 days to close.
0 votes Thank Flag Link Mon Jun 6, 2011
Hi Laurie!

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!
0 votes Thank Flag Link Sun Jun 5, 2011
Hi Laurie,
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!
0 votes Thank Flag Link Sun Jun 5, 2011
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