Home Buying in 19114>Question Details

2007, Home Buyer in Philadelphia, PA

if its a short sale house its pre approval that means the bank apporved it already and the sale process will be normal like any normal home in the

Asked by 2007, Philadelphia, PA Wed Oct 21, 2009

market and wont take that long ? thank you

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Not like normal home, but usually faster than first time.
When a short sale is approved, it lists a specific buyer name at a specific purchase price, terms, closing date and net amount to bank. This often take several months or more from original offer submission to the lender.

Often buyers will walk after such approval is issued. Could have been due to buyer: financing issues, inspections, layoff, market prices drop, found diff house, frustration....whatever the cause does not really matter.

At that point, listing agent will often put "pre-approved" short sale. However that is mainly just to try to get buyers interested in it compared to the other short sales. It is MARKETING, but is kinda true. The bank had PREVIOUSLY APPROVED an offer at that price. However your offer is NOT PRE-APPROVED.

Any new offer, even if for 5k above what previous offer still has to go back to the bank, who will review it and then decide if they will issue new approval letter.

The good news is that you have 95% chance of getting your offer approved as long as the purchase price and/or the net amount to the bank is equal or higher than what was previously approved.
Also, the same negotiator will often work the new offer and you are likely to get the new offer approved in a matter of days or a few weeks.

However, with Bank or America and few other lenders, they CAN make you start from scratch with new negotiator and new review of everything. They don't have to make you start over...but they MAY and often DO.
It usually will still go through slightly faster than first time since they don't have to necessarily order new appraisal, but if the previous one was more than 60-90 days old, they may have to order new one...depending on which bank/investor you are dealing with.

Switching buyers with Bank of America will often make you restart process and take weeks/months to get the same numbers approved the second time around that they already approved the first time.

The think to know is that you will almost always get your offer approved at that price...it may take a while...but you usually will get it done. Just make sure the listing agent is not going to submit another offer after yours that may bump you out for a extra 2k.
Try to get listing agent to agree to submit just yours...if they will, then you should end up getting the home.
0 votes Thank Flag Link Wed Oct 21, 2009
If in doubt, find out from the listing agent as much information possible. You should ask if there is one or two loans. If is a new listing, you probably have at least three months before you can find out if is going to get approved or not. Create a rapport with the listing agent and find out if he is willing to work only with your offer or is submitting all offers. Write a clause on your contract to protect your client so he is not kicked out of the deal while waiting. If you are waiting, you want to be sure that your offer is the one on the table. Attending a Short Sale workshop will probably be a great benefit to you. Goodluck!
0 votes Thank Flag Link Wed Oct 21, 2009
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