West Hempste…, Home Buyer in West Hempstead, NY

When is a short sale under contract in MLSLI (New york)?

Asked by West Hempstead Home Buyer, West Hempstead, NY Thu Nov 11, 2010

When is a short sale put under contract in MLSLI (New york)? Is it after the bank approves it or just after seller and buyer agree on an offer? Please advice. Thank you.

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A short sale goes into contract once the buyer and seller have both signed the document, and deposit money was exchanged--then the wait for the lender's response begins--if purchasing a short sale property, do work with an attorney who specializes in real estate and is familiar with short sales.
1 vote Thank Flag Link Thu Nov 11, 2010
Listing agent is asking me $500 check to submit the short offer to bank? why is that and is it refundable?
0 votes Thank Flag Link Fri Nov 12, 2010
While you are correct in stating that since the bank has already has had paperwork submitted on a prior proposed short sale they are "aware" of a short sale request, unfortunately, this is now old paperwork and was most likely discarded when the previous short sale was denied. And so, as I mentioned below, you are back at "square 1". All paperwork will need to be resubmitted with the updated hardship letter, updated bills, updated bank statements and pay stubs - as well as YOUR proposed sale offer and pre-approval information. Each offer on a short sale is viewed by the bank as one of first impression.

If the bank gave any indication of a counter-offer or sales number that it would accept, then that number would be your best guideline for the sales offer you should consider putting forth.

As for a time frame - since you are starting anew (as seen from the bank's perspective) - it is in the bank's hands and some do work in a more timely fashion than others. Much patience is needed as sometimes this process can be quite a long one.

Regards ,
Arlynn

Arlynn B. Palmer, Esq, SRES, CBR, CMS, CNS
Short Sale Specialist, REALTOR
Direct: (516)410-3594
Email: Arlynn@ArlynnPalmer.com
Web Reference: http://www.ArlynnPalmer.com
0 votes Thank Flag Link Fri Nov 12, 2010
As per your question below--how long until the approval and time frame--unfortunately, none of us can answer with accuracy as to how quickly the lender may react to your offer--there are no set standards when it comes to short sales, much patience is needed, as some banks are quicker than others--as for the approval--keep in mind that the lender is looking to get as much money back as possible, if your offer is considered fair in their view, they will move forward with the sale--unfortunately this question can't be answered with accuracy either, as none of knows for sure.
0 votes Thank Flag Link Fri Nov 12, 2010
This property also had a previous offer by another buyer which was rejected by the bank. so the paper work is intact and the bank is aware of the short sale. My offer is 10K higher than the rejected offer with a subtantial 20% down. What are my chances of approval and any possible time frame?
0 votes Thank Flag Link Thu Nov 11, 2010
Regarding the question "how long does it take to approve with the new rules?"

The new rules are only guidelines. It is a wild west show out there and you should be prepared for anything.
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Thu Nov 11, 2010
Typically it goes into contract immediately (or should) before it is submitted to the bank.
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Thu Nov 11, 2010
According to MLS, a short sale is in contract once the seller and buyer have agreed upon the sales price - BUT - it is in contract pending the seller's bank approval and is designated PBA (pending bank approval)!

This approval can be a fairly quick process if the bank has already approved a sales price number that the buyer is offering (because then the seller has already provided the bank with a lot of the paper work and the bank has already decided that a short sale would be in the bank's best interest) or it can be a lengthy process if starting from square 1!
Typically the bank will require, at the very least and among other documents, a hardship letter written by the seller, current pay stubs from each of the sellers, copies of all unpaid bills of the sellers (including any unpaid credit card bills, utility bills, telephone bills, tax bills), copies of each if the sellers' bank statements for the past several months, a broker price opinion or appraisal to determine the current market value of the home, the buyer's written offer and mortgage pre-approval and a proposed HUD1 form which will give the bank an indication of what it will net should it approve this sale.
This process can take anywhere from a couple of months to over a year depending on how quickly the documents are sent to the bank by the seller, how quickly the bank assigns a loss mitigation negotiator to review the documents and the case load of the loss mitigation negotiator. In general many of these documents will have to be supplied more than once since they become outdated over the time it takes for the bank personnel to review them.

If you have any questions regarding this process, please contact me and I'll be happy to speak with you further.

Regards,
Arlynn

Arlynn B. Palmer, Esq, SRES, CBR, CMS, CNS
Short Sale Specialist, REALTOR
Direct: (516)410-3594
Email: Arlynn@ArlynnPalmer.com
Web Reference: http://www.ArlynnPalmer.com
0 votes Thank Flag Link Thu Nov 11, 2010
So, with the new rules typically how long does it take for a bank to approve it?
0 votes Thank Flag Link Thu Nov 11, 2010
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