Hi Valerie
The answer that Shel-Lee gave a great answer, Make sure your realtor knows the short sale process and most banks will not allow a family member to purchase the home. It must be (Arms Lenght Transaction)
Good Luck

Terrance Quinn
Realty Unlimited/GMAC
772-240-2617
http://www.PortStLucieFLHomesAndRentals.com

Valerie:

Here is the abbreviated version of how a short sale works:
1. The property is listed by a realtor in the local Multiple Listing Service (MLS), and is often listed below market value to stimulate interest and get an offer or multiple offers quickly.
2. The seller has to complete a short sale package, including financial information and a hardship letter (basically, they have to go through the reverse process of qualifying for the loan, I call it "unqualifying" for their current loan).
3. The short sale package including the best offer received are submitted to the lender for short payoff consideration. Some banks want to see all offers, some banks want to see the highest and best offer, some banks leave it up to the seller which offer to submit.
4. The bank orders an appraisal and/or a BPO (Broker's Price Opinion) to determine the value of the home.
5. Based on the value received, they calculate how much they need to get for the property to satisfy their investors. Some banks don't have the numbers readily available, so they submit 'their' short sale package to the investor or the insurance company, if the loan is insured, and wait for them to come back with a yes, no, or counter offer.
6. The bank will then give the listing agent a yes, no or counter offer.
7. Once the bank accepts an offer, they usually want a very quick closing. I have had banks ask for a 15 day escrow after sitting on a file for 90 days trying to decide if they will accept the offer or not.

If this property has already gone through the above process and the bank came back with a counter offer that is too high for the market, then your realtor or the listing agent has to provide them with enough information to get them to reconsider. They will then re-evaluate the market value and their counter offer, OR NOT. Some banks will stick to their value and force the home into foreclosure. Then once they own it, they will have to list it with an agent and sell it. Since the banks don't like to own houses, we are seeing banks list their REOs at prices significantly below the purchase offer they just turned down a few months ago. Go Figure. I still can't understand how bankers think (which is probably a good thing).

My recommendation, work with a really good realtor, who understands the short sale process, to purchase the home. Just because it is owned by a family member does not move you to the front of list as a buyer. In fact, some lenders actually frown on a short sale to a family member and will not approve it (siting the fact that it is not an arms length or market transaction, even if it is). Make a reasonable offer based on the market value, less the work that needs to be done, and then leave it up to your realtor to package it correctly and negotiate for you. With a great realtor, a lot of patience, and an extra dose of perseverance, you could pull this off. Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty

good evening valerie........i have done tough mortgage financing since 1994.....pls call me so i can help you......bob mcclure.mortgage now.....farmington, michigan..i am licensed in your state, and 15 others......cell (248) 974-4444.......i am in se michigan, but i can close you in your own backyard......have you noticed that no one seems to really care if it means an extra effort to help you?.....i cannot guarantee anything but best effort and almost 14 trs. of experience....