I am currently involved in a short sale I put offer in about 15-20% below I am waiting to hear back but I

Asked by Jen, Wed Jul 30, 2008

would initially think that the seller would have flat out said too low but have not heard back as of yet. Is that positive in my favor or does the seller have to consult with the bank attorny first before getting back to me. Does it depend what stage of possible foreclosure they might be in now? What should I expect.?

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15
Greg Zaccagni, , Illinois
Wed Jul 30, 2008
Do you know whether the seller has been approved by their lender for a short sale? Check out my blog for more on this topic.

http://activerain.com/blogsview/608336/Steps-to-completing-a

http://activerain.com/blogsview/608336/Steps-to-completing-a
Web Reference:  http://www.gregzaccagni.com
1 vote
Susan Wesely, , Saint Paul, MN
Wed Jul 30, 2008
Expect no response for a long time, and then expect them to want a quick close (if they accept...). Banks are notorious - you can see many other Q&A about this very topic on Trulia. Is your Realtor (you DO have one, I hope!) following up on a weekly basis with the listing agent? If you must buy within a specific time frame, short sales are NOT the wat to go. Best of luck.
1 vote
Mark Roncone, , Naperville, IL
Fri Aug 1, 2008
Jen,

The seller is the current owner and all offers must be accepted by the owner subject to bank approval before being submitted to the bank. The banks can take 30-45 days or longer to approve the offer. Hope it works out well for you!
0 votes
Javier Gonza…, Agent, South Miami, FL
Thu Jul 31, 2008
Hi Jen,
Contracts usually have a time of acceptance even Short Sales.
0 votes
Jen, Home Buyer,
Wed Jul 30, 2008
Hi when you give an offer on the property does the seller have a certain amount of time to give their response by law?
0 votes
Lisa Schade, Agent, Libertyville, IL
Wed Jul 30, 2008
Hi Jen-
Unfortunately, you are at the mercy of the bank. It doesn't depend on the skill and level of expertise of the List Agent. The list agent can have all of their ducks in a row and the short sale will still not go through.

The bank has a number and it isn't always 80% as originally stated.

Yes, it does depend on what stage of the foreclsoure they are in. And you should contact your attorney for a status.

Hope that helps!
0 votes
Denise and R…, Agent, Clarksburg, MD
Wed Jul 30, 2008
As a broad general rule, the banks will accept a net to them of about 80% of the appraised value. The seller (or more appropriately the sellers agent) should be making sure that your offer falls within those guidelines to assure that the sale will ultimately be approved by the bank. You are also in the hands of the sellers agent and their expertise in moving a short sale through. Once a complete and I stress a complete short sale package is sent to the bank for approval you should expect 90 days before their final approval. We can have no control over the banks and when they will respond. Their short sale departments are completely overwhelmed and understaffed. I believe for the most part they are doing what they can, however, their systems and infrastructure were not designed to handle the loads they are receiving. Once the bank receives the short sale package, they will order their own appraisal and then begin their review process. Usually you will have several different contacts at the bank along the way until finally you will be assigned a negotiator who will be the liason between the sellers agent and the committee that meets to decided upon accepting the short sale or not.

As a general rule they will not allow any seller contributions to the buyer and will only consider the package and contract complete once any and all contingencies have been met. Each bank is different and working short sales or being involved as either a buyer or seller in a short requires a lot of patience and expertise. You should also be aware that if the agent is not well versed in handeling a short sale, or the bank is too difficult and poor at their internal systems, the home could go to foreclosure before you are able to go to settlement. Any number of things can happen and the deal could ultimately not go through for other reasons as well, however I've closed a good handful now and when it does finally happen, it can be very rewarding to all parties. Good luck and I hope this helps!!
0 votes
Ileanne Y Pr…, , Fayetteville, GA
Wed Jul 30, 2008
Be prepared to wait for a long time, banks usually take 2 or 3 months to get back to you, as absurd as it sounds and the way the market is they should be moving properties faster. If you are in a hurry to move start looking for another house.
Ileanne Price. Realtor. ABR. Relo specialist. ipriceitright@homesourcepc.com
0 votes
Greg Zaccagni, , Illinois
Wed Jul 30, 2008
Sorry my link was to the sameblog 2x's. Here is the other comparing REO's to Short Sales for buyers.

http://activerain.com/blogsview/608616/Comparing-REO-s-Short
0 votes
Jen, Home Buyer,
Wed Jul 30, 2008
Jen

How does this affect closing date, earnest $ that I gave for the process If it takes many months to close?
0 votes
Sj209, Both Buyer And Seller, California
Wed Jul 30, 2008
The other answers are correct. The chances of your offer being accepted and/or the deal closing are very slim. You can expect to wait for several months and then be disappointed. Short sales are not easy. One example: The bank could be in the process of renogiating the note with the current owner. Part of the negotiation process commonly involves the bank getting other offers for the property for comparison purposes and valuation analysis. It is not uncommon for a property to be listed as a short sale with an attractive asking price which encourages multiple offers, some may be over the asking price but the house can also be taken off the market and the original note terms renegotiated at that point.
0 votes
Javier Gonza…, Agent, South Miami, FL
Wed Jul 30, 2008
No,
if the lender gets to the BPO point and if their value is higher, your going to be countered anyway. Just be ready to wait and i recommend you keep looking.
0 votes
Jen, Home Buyer,
Wed Jul 30, 2008
Hi Its Jen
Yes it is a short sale and I have a realtor. It is weird as my relator did not stress that this process would take longer than expected. Do you think I offered too low?
0 votes
Javier Gonza…, Agent, South Miami, FL
Wed Jul 30, 2008
Expect to wait a bit.
A short sale is an attempt by a Seller to receive relief from their lender. If the property is listed, the Realtor may have to continue to show and take offers. Once the Lender assigns a negotiator, they may accept to continue the transaction or deny it. if they accept they will require a BPO (brokers price opinon) to establish value. Once this is done and if value is higher then your offer expect a counter, especially if there are several offers.
I have three on the table and it's been 3months so far.
0 votes
Scott Epstein, , Crystal Lake, IL
Wed Jul 30, 2008
Usually the seller will accept any offer. Since it's a short sale, it's really the bank that needs to approve your offer. This is what usually takes a long time.
0 votes
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