Home Buying in Tracy>Question Details

Gabriela Mag…, Home Buyer in Tracy, CA

I have make quite a few offers on short sale homes. Why does it take so long for the banks to respond?

Asked by Gabriela Magana, Tracy, CA Thu Jun 12, 2008

I have made a few offers on short sale homes which are pretty good offers. For some I have offered the asking price. Why does the banks take so long to respond on short sale homes. My loan will expire soon and I would like to purchse a home before it does. Can someone advise me on how I can speed up the process.

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I have an impeccable house on Short Sale - which will not take very long to close. View it on Metrolist.
Address 2005 Calaveras Court, Tracy, CA ($265,000) - Its a steal! Check with your agent. MLS # 80075326. Good luck!
0 votes Thank Flag Link Tue Jul 29, 2008
Easy answer for you, but do you want to hear the truth?
They are certainly frustrating to wait so long, but the reason the banks sit on the offer so long is to wait for another offer to come in during the meantime, as well as the process of the offer going through the chain of command. Some banks are faster than others and some are rediculous to wait for. It is most likely in your favor to be patient for sure and you might just get one heck of a buy as the seller wants out and the bank wants out, but the bank has already taken a hitt on the mortgage price so you will be waiting a while as they are waiting for a better offer to come in. If a full price offer shows up, or even a higher offer than the listed asking price, certainly a faster response time is for certain.

Keep your cool, patience as I have been on both sides of these and they usually work out if you wait and you will get what you deserve. My listing waited 6 weeks to get a response with a huge price reduction and the bank surrendered and took it. If you get the listing agent to contact the bank, they will only get the front runner and need to creep into the back office decision makers and then your cookin! Good luck, but yes, it takes a long time but keep patience in your timeline and the money will be saved on a great deal!

You will not be able to speed up the process as it will never be in your hands, its strictly about money and what the bank is trying to recoup on there losses. Your loan will not expire as you can relock into it at any time and also buy your rate down if you have to wait which if you get the house at a cheaper price, the buy down rate will off set your interest rate!

0 votes Thank Flag Link Tue Jun 24, 2008
Well as a local tracy realtor and have sold and represented short sales i will say there there isnt much that can be done as a buyer. keep in mind the values you are seeing on short sales are superficial values because the seller owes more than its listed for. The banks approval process if very lengthly and in most cases denied and go back to the bank. If your loan is about to expire i recomend buying a forclosure and depending on the bank they will typically respond in 2-3 days. just be sure your agent is providing you a CMA on the property you write an offer on to be sure you offer is respectable to both sides of the transaction.
0 votes Thank Flag Link Tue Jun 24, 2008

In additon to all of the wonderful answers to this question. I thought that I would throw in that my experience with most banks is that it isn't one person making the decision. There are often committees or teams or even multiples of these items that need to review the documents that were submitted. I hope that helps.

Cameron Piper
Web Reference: http://www.campiper.com
0 votes Thank Flag Link Sun Jun 15, 2008
Because they are BANKS! not Real Estate companies or Escrow companies. They just are not versed in this industry. We all have to have patience. Best of Luck! The Coach
Web Reference: http://askPCR.com
0 votes Thank Flag Link Thu Jun 12, 2008
Banks are not in a hurry.

They will look at every aspect of the sellers financial status and hold out on what they (lender wants).

While they prefer to have a short sale than own the property, their policy and procedure take precedent. even with REOs.

Often times banks will forgo a very, very good offer because their "committee" rejects it only to finally sell it at a much lower price.

One wonders why one hand seems to be unaware of what the other hand is doing.

Guess that's life in the corporate world with 9-5ers.

If you want the property be patient. Then again what is a "deal" worth?

All the best,
0 votes Thank Flag Link Thu Jun 12, 2008

You are not alone in the waiting game with lenders responding to short sales. Many buyers find it's just not worth the wait and move on to pursue homes where the negotiations are with the home's owner, not a bank. There are many motivated sellers in our area that have priced their homes agressively and are MUCH easier to deal with, While the banks string you along, interest rates are rising and you stand to lose hoping to gain "the deal". I'd suggest you ask your agent to focus on non bank owned or short sale properites, you'll be surprised at how smoothly things can go when an overwhelmed bank employee who doesn't care if the house ever sells is not calling the shots. Good luck!

Jo Ebbert
Coldwell Banker Burnet
White Bear Lake , MN
0 votes Thank Flag Link Thu Jun 12, 2008
Short answer is during a short-sale the property owner is making payments while offers are coming in. Buyer's loan maybe won't go to foreclosure for 90 days or longer perhaps. Bank is not too motivated to take any offer until they a. get what they want. b. have their back against the wall with the foreclosure coming and they don't want to own the home...so they strike a deal.

I've had clients wait around for 2 months to find they lost to someone else. I my opinion, look for REO's which the banks didn't sell in short sale and now own them and need to get them off their books. I do represent buyers and also do their loans at great rates. Let me know if interested. 209-649-8114 - George Kininmonth
0 votes Thank Flag Link Thu Jun 12, 2008
Hi Tracy,

The banks have an overwhelming number of short sales on their books right now and each negotiator has a large number of files that they are looking at. They have to look at what their position is on each file, how much they are losing and what the insurers will take. Banks look at the file in a very logical, business fashion depending on their shareholders, corporate office, percentage of foreclosures they already hold etc. Buyers like the home and are dealing on emotion, banks purely on business decisions. It is frustrating to think that when they have a reasonable market offer that they don't jump on it. But they don't. Also, it depends on the listing agent and how much they are the squeaky wheel while discussing the offer with the bank negotiator.

0 votes Thank Flag Link Thu Jun 12, 2008

Unfortunately, there are only a few ways to speed up the process: (1) have a listing agent that calls the lender every day, (2) make sure the short sale package is complete when submitted. You need to understand that in the short sale process the bank has to decide to take less that what is owed them as payment in full on the loan. There is a significant amount of due diligence that they need to perform to protect themselves from investor lawsuits and to satisfy themselves that they are getting the best deal possible for the home. In addition to this, most negotiators at the lenders are working with 400-500 files at one time. The patient and persistent buyers and agents usually get the deal.

Best of luck in purchasing your perfect home and Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty
0 votes Thank Flag Link Thu Jun 12, 2008
They are buried , they usually have one or two agents that habe to deal with Hundres of files. Thay usually can process 3 day.

Hope this helps
Michael Barron
First Team Real Estate
0 votes Thank Flag Link Thu Jun 12, 2008
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