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
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?
Keller Williams Atlantic Shore
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.
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.