Has anyone put a time limit on the banks response to a short sale in the contract, and how did it work out? for or against, no difference?

Asked by jo_caspers, Lemont, IL Sun Feb 19, 2012

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Jim Simms, Mortgage Broker Or Lender, Louisville, KY
Sun Feb 19, 2012
If you think adding a time line is going to scare the bank it is not likely. As mentioned below having one is very good as long as it is more than enough time for the lender to respond. But it is there just to be able to end the offer, not as a motivating factor.
1 vote
Linda S. Cef…, Agent, Franklin, WI
Sun Feb 19, 2012
It is definitely a catch-22. If you put an unrealistic time frame, a good agent will encourage their seller to pass on the offer. There is a lot of time and effort and expense incurred when submitting a short sale and nobody wants to go through all that if the buyer is not serious or not willing to give a reasonable amount of time to get it done.

On the other hand, and as others have already stated, it puts the buyer in a difficult situation if they don't. However, at least in the State of Wisconsin, the buyer can always ask for a release of the contract at any time. The seller doesn't have to agree, but it can be done.

As a buyer's agent, I always mark the addendum to reflect that all dates and deadlines run from lender acceptance. That way the buyer is not putting out money for earnest $, inspections et cetera until they know that the bank has accepted their offer.

The shortest and clearest thing I can tell you is, if you are in love with the house, don't give the bank a time line. Just know going into it that it could take awhile and MAKE SURE that the agent for the seller knows how to correctly submit your offer. This is probably the most crucial aspect of buying a short sale.

Wishing you good fortune in finding your perfect home.
Web Reference:  http://www.lindacefalu.com
1 vote
Laura Feghali, Agent, Stamford, CT
Sun Feb 19, 2012
Hello Jo,
I encourage my buyer clients on short sales to put a deadline on a response from the bank as they can extend that deadline if they wish. Obtaining a bank's response can be a very long waiting period and requires patience but in the meantime there may be other properties that come on the market that look promising to the buyer. This is a means for the buyers to disengage themselves from the short sale and move on to something else.

Laura Feghali
Prudential Connecticut Realty
1 vote
Andrea Bedard, Agent, Silver Spring, MD
Sun Feb 19, 2012
Hi jo_caspers: Here in MD we do put a time limit in the Short Sale Addendum, once the days are up and no short sale approval is received the contract can (!) be declared null and void and the deposit has to be disbursed according to the provisions of the contract.

As with everything this clause needs to be considered very seriously. The time limit needs to be realistic - if you give the bank 15 days to respond than that is anything but. The seller may opt not to move forward with you if the time frame is too short .. the bank may not consider your offer a serious one if the time frame is too short - in the end they will respond when they are ready!

The best thing to do is still to have a complete short sale package submitted according to the bank's specifications, a seller's and buyer's agent who understand the short sale process, a Title Co. who can prepare the documents fast and a ready, willing and able buyer who has been made aware of the ups and downs of a short sale.

To make a long answer longer, yes we build a time limit into our offer but it needs to be realistic. Once the deadline is reached (consider the time invested by all) - if there is hope and all parties are in agreement, it could be extended.
1 vote
Asif Sujon, Home Buyer, New York, NY
Sun May 3, 2015
0 votes
Asif Sujon, Home Buyer, New York, NY
Sun May 3, 2015
0 votes
Asif Sujon, Home Buyer, New York, NY
Sun May 3, 2015
0 votes
Marge Bennett, Agent, Fort Myers, FL
Sun Feb 19, 2012
In Florida we use a short sale addendum that does put a time limit on the bank to get an answer to the buyer. Default is 120 days. A buyer can choose a shorter time.
0 votes
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