Home Buying in Boston>Question Details

Nancy Butter…, Real Estate Pro in Ashland, MA

should I sign a P&S on a short sale that has not had the bank's approval yet? The seller signed the offer and we did the home inspection.

Asked by Nancy Butterly, Ashland, MA Tue Aug 7, 2012

Is it usual to sign a P&S before the bank has given approval to the sales price?

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11
What does your offer stipulate? The offer stipulates WHEN the PNS is to be signed and is a binding contract. If it stipulates it's to be signed now, then you sign it now. If not, you sign at the time you are contractually obligated to and if not, the seller can reject any further negotiations and put the home back on the market.

You should always have a PNS in place when submitting a short sale package to a lender, UNLESS there is an impending auction and the offer is needed to show the lender that the home is under contract.

Maryann Little, VP Mitigation
http://massachusettsshortsales.net
http://twitter.com/rapidshortsales
978-384-0032
1 vote Thank Flag Link Tue Aug 7, 2012
I think it's important for you to have a conversation with your attorney about what it actually means to sign a PS without the banks approval as it is our understanding that PS is not binding without the banks approval/signature. In essence, if we are right, that means you could simply be wasting your time and money signing a contract that can be voided at any time. Again, consult a real estate attorney immediately. Feel free to contact us for a good attorney referral: help@territory.com

Territory.com
Boston's Premier Buyer Brokerage
Web Reference: http://territory.com/
1 vote Thank Flag Link Tue Aug 7, 2012
Buy a home from an individual motivated seller. Give me a call anytime. Thank you.

Carey T. Hansen
"Your Real Estate Agent today, tommorow and into the Next Generation"



NextGen Realty
1243 Commonwealth Ave.
Allston Ma 02134
Phone: 617-548-7236
Fax : 888-875-6973
chansen@nextgenrealty.com
Licensed Real Estate Professional
0 votes Thank Flag Link Thu Aug 9, 2012
The purchase and sale being signed will save time when the short sale approval comes down. Make sure there is a short sale contingency in the contract that spells out the exact details. It may not be a bad idea to have an attorney review on your behalf.
0 votes Thank Flag Link Wed Aug 8, 2012
Hi Nancy,

P&S needs to be signed and should have a short sale contingency...

do you have a real estate agent or lawyer to advise you or are you on your own?
Pls call if you have more questions!

Sandy Johnson, ABR
603-557-3683
Broker - ACME RE.
Licensed in Massachusetts & New Hampshire

Email: REsandy@Ymail.com
0 votes Thank Flag Link Tue Aug 7, 2012
Yes, you should.
However, you should make sure that your commitment letter date from the bank (if you are getting a mortgage) is far off to give the lien holders time to settle your claim (for a lack of a better word).
Here competent legal representation and due diligence are important to keep track of all your deadlines and file for extensions when needed, especially if the property has 2 mortgages on it.
C.H. Naamad
Broker
Boston Luxury Residential, LLC
http://BostonLuxuryResidential.com
0 votes Thank Flag Link Tue Aug 7, 2012
Hi Nancy,

Yes you do and than handed over to the bank for approval. Once the bank has a signed P&S they could review it but still counter at the same time as well. In my experience I would give it no more than 3 months MAX.

Have a lawyer review the P&S beforehand to make sure that it's worded correctly, there cannot be room for error in the P&S.
0 votes Thank Flag Link Tue Aug 7, 2012
Sure sign the P&S -- but give yourself a time frame for the bank to approve the short sale -- dont listen to the listing agent that they are close to approving the short sale -- you do not want your down payment tie up with no interest paying on it -- have it stated that if the bank does not approve of the short sale say in 3months -- 6months or what even time frame you are comfortable with than you walk get all your money back with no recourse -- but I have seen short sale take 1year to approve and I have seen short sale take 6weeks to approve -- so depending on how much you like the place put in a contingency on the time frame -- if the listing agents does not like it walk because it tells me that they might not have started the short sale process started -- good luck in your search for a new home -- if you have any questions please email and I will be glad to help --
0 votes Thank Flag Link Tue Aug 7, 2012
This is common but the bank might not agree to the price you and the seller agreed on. They could counter. Make sure you have the correct language in the P&S to protect you, especially if you don't want to negotiate with the seller's bank. I try to put a 10 week time limit on the approval, if they can't get the short sale approved with in 10 weeks, I start looking for my clients deposit back. Good luck
0 votes Thank Flag Link Tue Aug 7, 2012
Yes it is, the bank usually wants to see the P&S before they will approve the short sale. It's too bad you already did the home inspection, but some listing agents require that too because they don't want the buyer to back out after the home inspection, but if the sale doesn't go through, you just wasted your home inspection money.
0 votes Thank Flag Link Tue Aug 7, 2012
P&S should have a short sale contingency...do you have a real estate agent or are you on your own? Pls call if you have more questions!
Sandy Johnon - 603-557-3683 Broker - ACME RE.
0 votes Thank Flag Link Tue Aug 7, 2012
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