Home Buying in 85053>Question Details

Confused In…, Home Buyer in 85053

What happens when a Short sale is approved?

Asked by Confused In Az, 85053 Sun May 10, 2009

Our offer was approved buy Counrtywide and the paperwork sent to the title co. Citibank (the lienholder of the second) misplaced the file and we have been waiting for two weeks to no avail. The 1st was bought by B of A and they are willing to extend our closing date due to Citibank. What happens now?

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There's really not much that you, as the buyer can do right now. I would suggest communication with your agent regarding the status and what he/she is getting from the listing agent as to any communication with the lenders.

You have every right to expect your agent to be in frequent communication with the listing agent and to be updating you on a regular basis. Your agent has every right to expect the listing agent to be in frequent communication with the lenders and title company and to be updating your agent on a regular basis.

It is IMPERATIVE in a short sale situation that there is good communication between all involved parties. Lenders do not always cooperate with responses to the listing agent, but the listing agent certainly should be doing his/her best to stay on top of things and communicating this to your agent, who in turn, should be keeping you informed.

Short sales can certainly try your patience as a buyer, but the rewards really can be worth it. They can also be a blessing--you don't have as much competition for the property as you do with a lender-owned and you can often get a great deal on a good property. If this is the house you want, just hang in there and try to keep a positive outlook.

This too, shall pass and at some point, you will be enjoying the home you really want.
0 votes Thank Flag Link Mon May 11, 2009
Thank you all for your replys. We have the time and are willing to wait. We were only told the process could take awhile, not what the steps are and what it all means. The selling agent works for the same company as our buyers agent so they have been comunicating but, it nothing is really being explained. What are some of the questions at this point we should be asking?
0 votes Thank Flag Link Mon May 11, 2009
Welcome to the Short Sale Nightmare. There's not much more to say that Randy and Cathey hasn't said.

I have explained to my buyers over and over and over about short sale, it seems they really don't understand until they get into nightmare. Most of the time you can't blame the agent for not explaining the process the their buyers.

I have a buyer right now decided to make an offer on a condo, I told her the lender of the home would not except anything less than the asking price, because it was appraised for $120,000 her offer was $107,000 the bank wouldn't even look at her offer. Now 3 week later, she wants to give full price. The day after I sent her offer to the other agent, she called wanting to know what the bank said about her offer.

Again, I have explained and explained and explained the process.
0 votes Thank Flag Link Mon May 11, 2009
Sorry to hear you're in short sale limbo. As one of the other responses said, patience is the key. So is communication.

Your agent should be in constant contact with the listing agent. The listing agent should be staying in contact with Citibank and with Countrywide to keep them informed regarding the status and timetable.

If everything was already previously approved by Citibank, the listing agent should be able to send copies of the previous communications to the new negotiator. This should help to speed up the process. The listing agent should also be confirming the new negotiator has all of the documents needed to complete the evaluation of the file.

I know it's frustrating to have your earnest money sitting in an escrow account while you sit and wait. However, this is the nature of a short sale. Your buyer's agent should have explained to you that when purchasing a short sale, you sometimes have to wait for answers for a very long time. This is even more of an issue when dealing with multiple lenders on a sale.

If you want the property, hang in there. If you really don't want to continue with the purchase under the circumstances, review your purchase contract with your agent. There should be wording that will allow you to cancel the transaction and receive a refund of your earnest money.

Good luck. I hope it works out the way you'd prefer.
0 votes Thank Flag Link Mon May 11, 2009
What are you hoping to accomplish at this point?
0 votes Thank Flag Link Sun May 10, 2009
I'm really sorry you're having to experience the nightmares of a short sale. I personally feel that buyers should be made MUCH more aware of such pitfalls BEFORE submitting an offer.

In all honesty, neither the first or the second are principals in the transaction, and either or both of them can change their mind, drag their feet, lose the file, change negotiators and otherwise delay the transaction or even refuse at the last minute to sign off on it. You are at the total mercy of BOTH lenders, and you're powerless to anything about it.

I really do hope you have a Buyer's Agent who is assisting you and representing you throughout this process. Assuming you do, then I would encourage your agent to stay in VERY close communications with the listing/seller's agent. Otherwise, you will always be the last to know what's going on, and even at that, it will always be second-hand information.

Patience is the #1 rule, so if you can hold on to that, you might at least survive this ordeal with a modicum of sanity. ;-)

...randy
0 votes Thank Flag Link Sun May 10, 2009
Thank you for your answers. This is all very confusing. The ernest money was cashed by the title company. The second had previously agreed to the write off. Can either the 1st or 2nd comeback with another counter offer even after the approval letter has gone to the title company?
0 votes Thank Flag Link Sun May 10, 2009
You simply cannot close the transaction unless and until the second gets their act together, agrees, faxes the correct docs, and then signs off on the transaction/deed of trust. And you're at the mercy of the listing/seller's agent to follow up with both lenders and make sure somebody is on top of it.

Your earnest money should be at the title company, not with a lender - correct?

What you are describing is a classic story with short sale transactions. You cannot and should not count on the deal closing, especially since the second has to start all over with a new negotiator. It's simply the perils of short sales. Welcome to hell.

...randy
0 votes Thank Flag Link Sun May 10, 2009
The 2nd agreed to the sign off but, faxed the wrong paperwork. Now 2 weeks later the file had been deleted and they have assigned another person to the case. The earnst money was cashed and Countrywide had assined a closing date but, now we are back to waiting. Is there anything we can do?
0 votes Thank Flag Link Sun May 10, 2009
What does your Buyer's Agent have to say about it?

In a general sense, if the second doesn't agree and sign off, the transaction can never happen ~ which is yet another reason 90% of short sales never make it to closing.

Best of luck to you!

...randy
0 votes Thank Flag Link Sun May 10, 2009
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