Home Buying in Moreno Valley>Question Details

Gregory Mayn…, Home Buyer in Moreno Valley, CA

why do the banks hold up short sales that are in cash?

Asked by Gregory Maynard, Moreno Valley, CA Sat Apr 28, 2012

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Unfortunately banks can care less if you have cash. It's a process, takes awhile, and you have to get in line like everyone else.
The sub-prime lenders have tons of files they have to weed through.
2 votes Thank Flag Link Sat Apr 28, 2012
Hi Gregory,

I'm not sure what you mean by 'hold up'. If you mean why does it take time, there are several steps the bank has to take before approving a short sale. They have to make sure the seller has a qualifying hardship, they have to ascertain the current market value of the property (either by ordering a BPO or a full appraisal), etc.

Short Sales require patience....by all parties.

Good luck!

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
2 votes Thank Flag Link Sat Apr 28, 2012
Lots of reasons. Among them:

--Maybe the cash offer isn't high enough. If the bank thinks a property is worth $200,000 and you offer $100,000 cash, the bank won't accept.

--There's still a lot of behind-the-scenes stuff to be done, even with a cash offer. In fact, about 99% of the work that has to be done with a financed offer has to be done with a cash offer.

--Banks just don't do short sales well. Cash, financing, whatever . . . that's not the issue. Banks--unbelievably after 6 or so years--still are lousy at handling short sales.

So, a cash offer may help slightly. But most of the factors in a short sale remain unchanged.

Hope that helps.
1 vote Thank Flag Link Sat Apr 28, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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HI Greg,

The guys in charge at the bank work a 9 to 5 like most everyone else. They are working on Hundreds of files so it can take quite a while for them to review the file. It is a major problem in our system put it is what it is, we are at the banks mercy no matter if the buyer has financing or not :(

Good Luck!
0 votes Thank Flag Link Sun Apr 29, 2012
I don't think the banks really care if they get cash or not because they just want the most value for their asset. The bank will have an REO completed and know the value of the home four different ways and what repairs need to be completed to bring the home to average condition. If there are no major concerns and they feel that you can either pay with cash or go borrower the money and pay for cash, it really doesn't matter to them. Cash will only be good if the bank knows that you can't finance the home and if this is the case, I'd keep your cash and buy something that can be finances, even if you can pay cash for it today.
0 votes Thank Flag Link Sat Apr 28, 2012
When it comes to the buy side, cash is good. Once you have your approval your transaction can close quickly.
Before you are granted an approval on your purchase by the short sale lender, they want make sure that the seller qualifies for a short sale. If it is a HAFA short sale, more time is required. The short sale lender also wants to evaluate the property to see if the dollar amount of your offer makes sense to them. Cash is good but not enough cash is still not enough cash.
Short sales take patience. But I bet that you think that you are getting a good deal or you would not have made the offer you did. Right?
0 votes Thank Flag Link Sat Apr 28, 2012
I just think that you agent could bring the us back if the powers that be take the gloves off. this home was something called pre appoved and time is money, need to close yasterday.
Flag Sat Apr 28, 2012
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