Home Buying in Willingboro>Question Details

Temeica Guy, Home Buyer in Willingboro, NJ

What does subject to third party approval mean? Does this prolong the process when making an offer?

Asked by Temeica Guy, Willingboro, NJ Mon Apr 20, 2009

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4
Hi Tameica,
This simply means that the Seller has to approve your offer AND another party, either the seller's lender, or a Bankruptcy Trustee or judge must also approve the offer and the sale of the property. It does usually mean an opportunity to buy at great price but the opportunity cost is patience. You have to exercise extreme patience in dealing with these types of transactions. Depending upon whether the seller has submitted short sale paperwork to his/her bank or where they are with respect to bankruptcy proceedings, prepare for this to be a 2 month to sometimes 6-month process. Yes, I said 6 months! If there are two mortgages or other liens on the property in addition to a first mortgage...this can be a very lengthy process - but it can be absolutely worth the wait. If you are the buyer - you should absolutely be represented by a competent Realtor and Attorney when offering on a property with such entanglements. Best wishes in your quest!
Kim Thomas, Broker-Salesperson
Realty Executives
856-308-5989
http://www.KimThomasHomes.com
email: kim@kimcanhelp.com
0 votes Thank Flag Link Mon Apr 27, 2009
Great answers. What it will actually means is a longer time to get to closing. The lenght of time depends on a number of issues. If you need to move by a certain date, this type of property might not be for you. I always want to know, before putting in an offer on a short sale property, is where in the process the seller and bank stand.

Has the seller submitted the paperwork to the mortgage company for a hardship declaration? Have there been any other offers submitted to the bank? Has the Bank ordered a BPO?

Laura Giannotta
Keller Williams Atlantic Shore
0 votes Thank Flag Link Mon Apr 20, 2009
Third party approval means the seller does not have the last say when an offer is submitted. It sounds like you are talking about a short sale. There have been many answers this past week in Trulia regarding short sales that can help you understand them.
And, yes Temeica, it most certainly will prolong the process. Usually takes many months for the bank to respond to a contract (offer). If you have the patience to wait, you could get a good price on a home by going this route.
Good luck!
0 votes Thank Flag Link Mon Apr 20, 2009
It usually means the homeowner owes more on the house than it can be sold for AND the owner can't pay and is trying to get the lender (there can be more than one) to APPROVE of the sale and release the lien so someone else can buy it with a clear title EVEN THOUGH the lender will not get all of their money.

The lender has to approve the HOMEOWNER asking for the short sale and has to approve the amount of the sale. SO, even if you offer full price that does not ensure that you will end up with the house. If it is SUBJECT TO 3rd party approval - those approvals have not yet been given.

MOST, short sales are a waste of time and a settlement does not happen. It will then likely show up as a foreclosure when the owner continues to be unable/unwilling to pay. Foreclosures are easy and much more likely to result in a closing and a 'deal'. (Sometimes the best deals are from actual homeowners tired of waiting and just wanting out.)

If you have LOTS of time and want to aim for pie in the sky - consider a short sale. Don't call me for it though unless you want to pay a $1000 retainer up front that is not refundable.

Paul Howard,Broker
NJHomeBuyer.com Realty
Web Reference: http://www.njhomebuyer.com
0 votes Thank Flag Link Mon Apr 20, 2009
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