Home Buying in 60504>Question Details

jesselliecat…, Home Buyer in Aurora, IL

When a short-sale home has been advertised on the MLS as "PRE-APPROVED," does the realtor have a legal obligation to honor that price?

Asked by jesselliecatdog, Aurora, IL Fri Jul 6, 2012

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Typically if the bank approves a price there is not much flexibility. When the bank previously approved a short sale with a previous buyer or does their BPO before there is an offer, their price is locked in and they are willing to wait for their price. There is of course some flexibility, 5%, but not all that much.

Lonny Miller

Realtor @ Charles Rutenberg Realty
Serving Chicago and Suburbs
lonny@shortsaleschicago.com
ph 847-347-4666
fax 847-737-1436
http://www.shortsaleschicago.com

'Helping Sellers of Short Sales Throughout Chicagoland'
0 votes Thank Flag Link Thu Oct 18, 2012
Often, "pre-approved" short sale means "previously approved", in regards to a previous price point the lien holder agreed to. Occassionally it means the seller has received approval from their lien holder to sell the home for less than they owe - in either case, there is no gaurantee the lien holder will accept that price now, though they often do...
0 votes Thank Flag Link Fri Jul 6, 2012
No they do not and in most cases a Realtor is making a misstake in advertsing that because even if the seller has been pre approved for a short sale and even if a price was agreed to at one time, it all ends up with the final investor and PI company, if one is involved, and they can make changes at any time up to the final approval of the deal. Banks are just conduits for the end investors and do all the grunt work so to speak, the person who actually is on the hook for the deficiency, the investor will make the final decision and just because it was approved once does not necessarily means it will get approved again at the same price.

If you have any questions feed free to call or email me or visit my short sale website located at http://www.ShortSaleHelpOnline.com

Thank you, Mike
0 votes Thank Flag Link Fri Jul 6, 2012
oh my, it only means that the seller/owner of the home has been approved by their bank/lender to do a short sale, i.e. their hardship situation has been accepted by the bank and the property can be offered as a short sale..... Sometimes the bank/lender will stipulate the price they will accept and be firm and
sometimes it is just picked somehow, sometimes low to attract multiple offers, sometimes high it just all depends.... But nobody except at the very end the bank/lender will determine which offered price they will or will not accept, not even the seller has a lot of input there....

Remember that in a short sale the loss on what the Sellers/owners currently owe on their loan, and will not be covered by the offered purchase price, will be the loss of the Bank!!!! So they will decide....

So if you are a buyer, and hopefully working with a Buyers Agent, a Realtor who represents you, and can provide to you solid market evaluation so that you will offer, what that home is worth in that area and that areas current market conditions..... and remember a short sale can take a long time, and the bank may very well accept the offer of another buyer....

Read the other comments below and you will understand....

Good Luck
Sincerely yours,
Edith YourRealtor4Life & Chicago and Northern Illinois Expert
Working always in the very BEST interest of her clients, Buyers, Sellers and Investors alike....
Covering for @Properties the city of Chicago, all N and NW suburbs, the fine homes on the
North Shore, and many of the W and SW suburbs, and with her trusted Partner Agents all of
the US and worldwide properties. Edith speaks French, German, some Spanish and other.....
@Properties, 30 Green Bay Rd, Winnetka, Illinois 60093 ---- EdithDoesItRight@yahoo.com or EdithSellsHomes@gmail.com Check out my website at htttp://www.tinyurl.com/MeetEdithHere
get to know me better and learn about my experience, expertise, services available and letters of recommendation of former clients..... Also you can sign up on my site to search for properties in my expanded service area. HAVE THE MOST WONDERFUL DAY :)
0 votes Thank Flag Link Fri Jul 6, 2012
The answer is NO. A preapproved short sale can mean that the seller has been preapproved for the short sale and it can also mean that the bank has approved that price, it happens all the time. I have short sale listings in which the price has been dictated by the bank and ones that have not. In the end, it is still all negotiable and needs to go through FINAL approval (kind of a reverse underwriting) by the seller's bank/mortgage holder once a solid contract is in place and all requested documents are provided.
0 votes Thank Flag Link Fri Jul 6, 2012
No.

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Fri Jul 6, 2012
Jesse, you really, really need to do a little research regarding short sales. You may be in way over your head.
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Short Sales are the 'Wild, Wild, West of Real Estate" where there exists only an illusion of rules. These sales are suitable only for a very select portion of the home buying population. That population will suffer no financial or emotional loss knowing they will be on the team that loses 70% of the time.
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You would be well advised to understand pricing in regards to bank owned homes also. And of course, you already know, traditional sales also have negotiated sale prices.
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Lastly, the real estate professional plays NO ROLE in regards to the selling price. In a short sale, even the owner is sidelined in determining the selling price. So, who actually set the price for which a short sale is sold at? Does the price include ALL of the fees the buyer will be requested to pay?
It a convoluted mess, a highly complex transaction, and you may only be at the beginning.
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Buckle up, you are in for a wild ride!
Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group, Palm Harbor, FL
http://www.RealEstateMadeEZ.us
0 votes Thank Flag Link Fri Jul 6, 2012
What the Realtor is referring to is that the SELLER has been pre-approved by their bank for their Hardship and to do the Shortsale.
It has nothing to do with the Buyer or the LISTING PRICE.

Understand, also, that the LISTING is not set in stone, neither the Seller nor the Bank has to honor that Price. That may be a number, picked out of the air: It might, (and probably is) a low number to try to attract multiple offers.

If you are Buying, you should have a Realtor representing you; you would already have the answer to questions such as these. The Buyer's Agent costs you nothing, they are paid out of the Escrow.

You should have your Agent do a CMA to determine the Market Value and therefore your Offering Price. Please ignore the Listing Price; it is really meaningless.

Good luck and may God bless
0 votes Thank Flag Link Fri Jul 6, 2012
When a short sale is "Pre-approved" it means that the sellers have qualified for a short sale, it does not mean that the price has been approved by the bank.
0 votes Thank Flag Link Fri Jul 6, 2012
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