Home Buying in Denver>Question Details

Drea, Home Buyer in San Anselmo, CA

On a short sale, after an offer was accepted by the seller, how does the evaluation work?

Asked by Drea, San Anselmo, CA Tue Jun 25, 2013

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If by evaluation you are asking how the process is handled by the short sale lender once the seller accepts an offer here is the Cliff Notes version of what happens.

The offer is submitted to the short sale lender (ssl).
The seller’s financial information package is submitted to the ssl.

The ssl evaluates the offer:
Is the offer price market correct as determined by a valuation put on the property by a broker or appraiser hired by the ssl.
Is the buyer and legitimate as determined by a review of the offer price, down payment, loan type, preapproval letter, etc.
Does the seller have a hardship as determined by their financial information, credit, and hardship letter?

Ssl grants approval or denial of short sale transaction.

If approval is granted, normal escrow period begins and buyer does inspections. Buyer’s loan – if not a cash purchase – is processed including appraisal by buyer’s lender. Buyer’s loan is approved. Seller and buyer sign all documents, escrow closes and buyer takes ownership of the property.

This is, as I mentioned, a brief summary. Much can go wrong. Many possible problems and delays can arise due to FHA rules, HAFA evaluation, seller’s actions, lost paperwork by the ssl, seller’s delay in providing needed paperwork to ssl, requirements from the holder of the actual loan (in most cases the ssl is not the lender but is a servicer who does all the paperwork and then seeks approval from the holder of the loan) and other crazy things.

Have patience. Be ready for delays. Keep your fingers crossed for success.
0 votes Thank Flag Link Wed Jun 26, 2013
Sellers will always accept a short sale contract, as for evaluation it depends on if it was pre negotiated with the bank or not. You may want to ask your agent to reach out to the asset manager.
0 votes Thank Flag Link Tue Jun 25, 2013
The contract goes to the mortgage company that has the first mortgage to determine whether they will accept the short sale
0 votes Thank Flag Link Tue Jun 25, 2013
To do a Shortsale, you have a Buyer's Agent representing you; why aren't you listening?

The SELLERS (homeowner) acceptance is really meaningless.
You will not be under CONTRACT until the Bank accepts your offer.
You shouldn't spend a penny on inspections until you are under Contract.

Isn't this what you were told?
0 votes Thank Flag Link Tue Jun 25, 2013
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