You'll need two things during that time:
1. Patience. While you've submitted all your documents to your Lender for your mortgage approval, and you keep your documents current and updated, you'll grow frustrated with the lack of any communication from the Seller about the status of the short sale. This is common, both the poor communication and the Buyer's frustration. Prepare for it.
2. Maintain your credit scores. Be sure not to make any dramatic changes to your credit report that could affect your credit scores. Pay all bills on time. Don't CLOSE any accounts. Don't open any new accounts. Don't run up your outstanding balances to max your revolving debt.
Once the short sale is approved, you may find the price you offered is not acceptable to the Seller's Lender. They may come back and counter-offer your price, so you will have to reconsider at that time if you wish to pay more than your original offered price.
The three rules of real estate: Location, Location, Location.
The three rules of short sales: Patience, Patience, Patience.
I hope that helps!
1- Most mortgages that are eligible for being sold short are "underwater".
2- Underwater mortgages are more than the house's current market value.
3- The contact between the homeowner and the mortgage is often a bank, but only the "servicer" of the loan, not the owner.
3- The actual owner of the mortgage is not always a bank but an "investor" and;
a- an "Investor" is sometimes a fund owned by as many as thousands of people
b- an "Investor" is sometimes a fund that owns only a "section", or "slice" or "tranche"
c- there were different rules on how to treat an individual loan or tranche in each bond.
d- Some individual investors get paid better if the loan is foreclosed than if it's sold short of the mortgage or if it's "modified" (lowered for the homeowner or seller to be made more affordable by just lowering the payments, reducing principal, or a combination). Many lawsuits, arguments.
In "Short", if the house is overfinanced and is defaulting, it will start investors arguing and litigating. There are many solutions being offered to make a short sale happen, but rarely will everyone win, and the people and investors that will be taking the losses, object enough to stall and delay the whole process, sometimes for a very long time. A Real Estate Broker has to know how to wade through this process for their client and for their customer. Because each situation is different, it's caused a significant "dislocation" in the marketplace for years, and maybe for many more years.
A pre-approved short sale or an REO, (a finished foreclosure) suggests this process is cleared up already, but it depends on who "pre-approves" it. As an "homebuyer" investor, I have found significant value outside short sales and foreclosures. This is because distress sales lowering the prices in the marketplace. Everyone is different...best of luck in all your adventures.
Owner has requested bank take less than mortgage amount where they can sale property.
I have been a listing/buyers agent with short sales is always drama, not due to agents banks why of conducting business.
Buyers Agent can detail more for you
National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911
These sales are typically very slow and challenging for buyers, sellers, and agents.....and too often result in disappointment.
Our advice is to consider all options when seeking a good value....including traditional sales and foreclosures.
The Eckler Team
Certified Buyer Representative
Century 21 Princeton Properties
To keep this simple............
A short sale is a situation in which the seller owes more to the bank than the property is worth. Rather than having to bring money to the closing table to make up the shortage, the seller is asking the bank to accept less for the home. In order to be allowed to do this, the seller would need to show a hardship of some sort - those stipulations depend on the lender.
Although your credit will be negatively affected by a short sale, it won't be as bad as with a foreclsoure.
If you are thinking of going the short sale route - check with your lender first. These sales can be delayed and take many months while the parties wait for final bank approval.
Prudential NJ Propertties