Tonya, Home Buyer in Port Saint John, FL

We recently signed a contract on a short sale home. The listing for the home said it was a short sale but ready to close. Now they are telling us

Asked by Tonya, Port Saint John, FL Thu Mar 25, 2010

that the process is starting over. Knowing that we are trying to qualify for the tax credit. Now there is no certain date to close and we may lose the tax credit. What should we do? Should we walk away or wait? Was that an illegal move by the bank or the listing agent?

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13
No thanks Pete, I will spend my time on listings that will actually close.
1 vote Thank Flag Link Thu Mar 25, 2010
It sounds like your offer was lower that the price that was preapproved by the lender. Yes, it is a legal move, they do have a say in how much they will lose to sell this home. If you really want the home, hang in there. In this market the supply is abundant, just remember, a preapproved price doesn't mean a guaranteed price.
Good Luck,
Robin Ricker
Century 21 Flag Agency, Inc.
0 votes Thank Flag Link Tue Apr 5, 2011
Make sure that your agent is in frequent contact with the selling agent. Some short sales are approved and can close quickly. Just contact your agent again to get updates!

Debbie Albert, PA
Coldwell Banker Residential
0 votes Thank Flag Link Fri Mar 26, 2010
Actually, what a bank is willing to take technically doesn't depend upon a fixed percentage of the UPB of the defaulted mortgage (even though that's the line that a bank will feed to any potential buyers). What they're willing to accept at any given time depends upon their liquidity and investor requirements. If they can get more than 75% of the UPB for a short-sale, then they'll do it. Yet, they'll sell it for 60%--or less (I've seen 20% to 40% of the UPB for some properties in Ft Myers, Ft Lauderdale, and Jacksonville)--to move it fast if they're forced to quickly liquidate several NPNs (or non-performing loans) to meet a liquidity requirement (as specified by the Fed). Nevertheless, short-sales in the range that Pete gave happen more frequently than not.

An alternative for you might be to pursue this property via a short-paper transaction.

Please feel free to PM me for more details.
0 votes Thank Flag Link Thu Mar 25, 2010
Scott I do not care what it says- it does not work that way. If a contract is accepted by the owners not the bank it goes contingent and all other offers are back ups. Only if there are more than one offer and they are all sent to the owner, then the owner ahs the right to choose the best one. So I suggest you become a short sale specialist, as I have before you comment on what is written. It does not always hold true.
0 votes Thank Flag Link Thu Mar 25, 2010
There is usually only one thing that is certain with a short sale - and that is that they are not "short". If you really want to qualify for the tax credit, you should not be banking on a short sale, particularly one in which you just signed the contract and have not yet head back from the bank. Very likely the bank had approved a certain number, if you hit that target spot on, you might, and I stress MIGHT have a shot at a quick(er) close.

So the short answer is.....if you want to be sure to qualify, move on my friend and find yourself a great traditional deal - they are out there!

Good luck,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Thu Mar 25, 2010
Hey Tonya,
Here is a great article that hits the nail on the head with short sales. Pete, you need to read the FAR Short Sale addendum. The language specifically states that offers will continue to be accepted unless otherwise noted.
0 votes Thank Flag Link Thu Mar 25, 2010
Tonya, The reason short sal;es do not close, is becuase the buyers back out and do not want to wait. Not because they could not afford it. As before your only told half the truth. Also when a contract is written on and accpetd by t third party it is contingent and does not stay active for further offers. This only happens if it is a Babnk Owned forclosrue or REO, and then the bank wil usually sya take offers for so many days then stop taking them. Not as you were told, and not the way a short sale is supposed to be.Only back up contracts are taken and helad incase the first contract falls through for some reason. This can be, financing, they do not want to wait the long haul, or the buyers found a different home that will close as a normal sale. This has been happening more than not.
I do not know where the statistics come from on short sale closings, but I hear from everyone that I speak to that the house is closing fater than we thought, or it is a cash buyer. People must also realize that a short sale is already at the bottom of the price the bank can take. They get between 65% to 75% of what the original mortgage was. Then you can only try and negotiate about 8% from that.
Again I feel that you have not been told the entire story as I see usually done.
0 votes Thank Flag Link Thu Mar 25, 2010
Hi Tonya,
Don't just walk, run! Only about 20% of short sale properties ever close and in the mean time most lenders will require the listing to stay active and continue taking offers. I personally will not show short sales to my customers for those reasons. More than likely the bank and or listing agent have done nothing illegal. The general perception is that this is a buyers market when in fact most of our inventory, between 60-70% are short sales and unlikely to close. This has caused a very competitive market for the remaining listings. Feel free to call me if you have any questions.
0 votes Thank Flag Link Thu Mar 25, 2010
Tonya,

What it sounds like is the short sale was approved with a different buyer who dropped out. In this case some banks just quickly approve the new buyer ("transfer the approval") and others make you go through the whole process. I don't think the agent deliberately lied to you.
Decide whether the tax credit is more important than this house and also if there're non-short sale homes available on the market that fit you criteria and act accordingly.

In the meantime, if you need a mortgage loan, my husband and I own a mortgage brokerage and we do loans all over the state of Florida, so if you need help qualifying and getting pre-approved, or you have any loan questions, please call us 1-800-801-6080
We do all types of loans: FHA, VA, 100% USDA, Conventional, Hard Money

Elena Ollick
Amerivest Realty
Faith Home Loans
239-206-4500
800-801-6080
eo@oceanhomesrealty.com
skype: napleshomes
Get Pre-Approved: http://www.faithhomeloans.com/express.html
0 votes Thank Flag Link Thu Mar 25, 2010
Excuse me out of Staters. Tonya, Even though a short sale listing says it is ready to sell, the agent should have disclosed to you that this could take up to 6 months and even some I have seen go for a year. But the banks are getting better. SOME WHAT anyway.
Huds do not come until close to the closing date or they are not useful. I would speak to the Broker and ask for a meeting with the agent with them. Did the agent explain the process to you about short sales?

These may tax your patience. But if the home is a really good deal and you have the patience and you really want that home, then I would say wait. But there is nothing stopping you to look for another and place a contingency on the contract stating the first accepted contract by a Bank or Mortgage company will be accepted and all others will be dropped. Make sure also that you do not pay a deposit unitl the bank accepts the contract, no matter what agency tells you different.
0 votes Thank Flag Link Thu Mar 25, 2010
Depending on how long the house has been listed it could be that the information in the listing is just out dated. It would be hard to walk over details in a listing. Your contract is what matters and the verbiage inside of it. Talk with your agent.
0 votes Thank Flag Link Thu Mar 25, 2010
Not really illegal but unethical. A short sale can not be approved or pre approved without an offer and the short sale package sent to a negotiator for approval. If there is a new offer than it is a new submission process. The seller has to fill out and send in all their financials and a hardship letter stating why they need teh short sale. Once the offer comes in, teh listing agent needs a preliminary hud as if it was closing and a net sheet showing the bank what they get. When they receive all of this a negotiator is assigned, they will request an appraisal and when everything is back, they can accept or counter offer the short sale offer. best cases is 4-8 weeks worst cases are 3-6 months. Good luck with your offer, realisticly chances are slim if you want the tax credit.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Thu Mar 25, 2010
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