Short Sale: How long after verbal approval till we go into contract??

Asked by Vicbabs, Southampton, NY Tue Mar 16, 2010

The homeowner passed the word along that the bank approved our offer two weeks ago. The sellers agent says that the seller is waiting for written approval from Bank of America before they can go to contract. It has been two weeks and we still have no word of a contract.
I have a few questions....
How long after a verbal approval does it usually take before you can go to contract?
Is it the bank or the sellers attorney that draws up the contract?
Once we get a contract how long until a closing date?
---Stupid question...Do we get the keys at the closing?

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9
Nick Rafello,…, Agent, NY,
Tue Mar 16, 2010
Vicbabs,

Teresa Cooper hit the nail on the head on all accounts here. Short Sales are a waiting game. The banks also wait to see if they can get better offers. So, that said, to perk up the banks ears I'd suggest you go with the asking price.

Nick Rafello, V.P.
The Corcoran Group
(212) 444-7852
nrafello@corcoran.com
1 vote
Nick Rafello, Agent, New York, NY
Tue Mar 16, 2010
Short Sales can take months. Sit patiently, looks good for you from what I've read. Also, the seller's side draws ip the contract and yes, you get keys at the closing. Good luck and conrats!

Nick Rafello, V.P.
The Corcoran Group
212-444-7852
Nrafell@corcoran.com
1 vote
Mickey Mouse, Home Buyer, Missouri
Mon May 7, 2012
Bank of America, good luck! They accepted my offer at the end of January 2012. I had one closing that went
by and now I am supposed to close 5/9/2012. Yeah right. This is a short sale and as is. I still have to have an
inspection. Noone can seem to give me a straight answer except that the negotiator at the bank is overloaded
with files and does not respond to emails, phone calls etc. I live in Missouri, but I am sure it's the same all
over. All this does is discourage prospective buyers.
0 votes
Frustrated H…, Home Buyer, Md City, MD
Tue Aug 24, 2010
Buyer beware. I too received a verbal approval from BOA to purchase a short sale property. Less than two weeks later the seller's agent contacted my agent to inform her that BOA had foreclosed on the property.

Seller's agent contacted BOA because we had a ratified short sale contract agreed upon by all parties, (Buyer, Seller, BOA) My closing date was less than three weeks away. I'd paid a for property inspections and arranged for insurance. There must be some mistake right? Right, bank negotiator did not notify their legal folks of the short sale approval.

Did BOA make things right here??? No. I will have to wait until BOA lists property again before making another offer. Response agent received from BOA Loss Mitigation department was basically that property is a foreclosure and would remain that way even though a mistake was make on their part.

I'm no legal expert but I suggest that you get your approval in writing.
0 votes
Vicbabs, Home Buyer, Southampton, NY
Thu Mar 18, 2010
Today's confusion.
We aren't sure who it is we have been dealing with now. Our agent stated that she thinks that the person we have been talking to is a relative of the seller. (Does this usually happen?)
He says that his job is to collect data from all parties involved and relay it to the bank. Who usually does this?
Look at the attached e-mail.


Hello


1) Who do I represent in this transaction?

Answer: Technically I was hired by the seller's realtor Paul Reiss but, I don't represent any one party in this transaction. My job is to collect data from all parties, relay this information to the lender and ensure a smooth short sale transaction.

2) Am I a family member of the seller?

Answer: yes, he is my Uncle. I've been consulting with him on the best way to mitigate his losses since the beginning of his financial hardship.

If you have any additional questions please let me know. I hope all is well.

L. Lopez

Does this sound fishy to any of you or do you believe he works for countrywide?? If so why do we STILL not have written approval?
0 votes
Vicbabs, Home Buyer, Southampton, NY
Wed Mar 17, 2010
BoA gave us a closing date today! April 25. The negotiator that we are dealing with works for countrywide. I thought that they were the same but apparently they still get two different paychecks. He said that we can maybe get an earlier closing date if we want.
The negotiator said that though we have a closing date to not hold our breath because there are no rules in a short sale.
He said that even though BoA gave a short sale we still have no contract with the seller and BoA STILL has not provided us with written approval!
0 votes
Denise Phill…, Agent, Jacksonville, NC
Wed Mar 17, 2010
It took ours 6 months with Bank of A. I would write a contract now. I would have your agent
or attorney email the bank instead of call. We had an agent write up our contract. Yes, you get the
keys at closing but if someone is living in it you would have to evict them first.
0 votes
Vicbabs, Home Buyer, Southampton, NY
Wed Mar 17, 2010
Thank you so much for your answers! All answers are great but I think that our short sale seems to be a little different. We never gave a contract at the beginning, just proof of funds and a price agreement. (In fact our attorney looked at the price agreement and stated that it was a simple price agreement NOT a contract.)

-We did in fact give listing price because at the time there were several other offers on the house. All of which were under listing price. We are fortunate enough that the listing agent has stopped showing the house!! (because we gave the asking price and because there are tenants living in the house.)

We needed to get our proof of funds and a price agreement to BoA at that time. We sent it over on Jan 22. 10 days after that they ordered a BPO. About 3 weeks after ordering it the BPO was conducted. 10 Days after that they gave the seller VERBAL approval that they have approved our offer. (From the horror stories I have been reading we are moving along GREAT). All in all we are at 8 weeks now.
The seller has been waiting for the WRITTEN approval before they go ahead and make a contract.
This is why I'm still wondering about how long that usually takes??? Our lawyer has been trying to contact our negotiator at the bank but they have been playing phone tag. He was making all of his phone calls on Friday but now doesn't seem to be calling anyone back.
-I know it hasn't been that long but when you're eagerly awaiting to move everyday seems like forever!
0 votes
Teresa Cooper, Agent, N Charleston, SC
Tue Mar 16, 2010
Hello, Vicbabs. Great question! I've worked on many short sales in the last couple of years, and successfully closed the vast majority of them. I have never received a verbal approval of a short sale. TYPICALLY, here is what happens:

* Potential buyer makes a written offer, and submits to Owner / Seller.
* Owner / Seller accepts the offer, contingent upon lender approval, signs (ratifies) the offer and returns it to the Buyer. At this point, you have a contract, whose terms are contingent upon the lender's approval.
* The Seller (or his Agent) then submit the contract to the lender for review, negotiation, and approval / modification / rejection. The Seller will also have to submit a very comprehensive "short sale package" to the lender before they will consider the contract.
* The lender puts the contract in a queue, waiting to be assigned to a negotiator. This can take several weeks, or even months. My experience with Bank of America is that this will take at least two months.
* Once a negotiator is assigned, the negotiations begin. This can take a couple of weeks, even a month or two.
* When the lender and the Owner / Seller and Buyer reach agreement, then the lender will issue an "OK to close" letter which will contain the conditions that must be met to get lender approval, and satisfy the contingency on the contract.
* Then, closing can occur, anytime within the time limits specified in the "OK to close" letter.

Vicbabs - Short sales are not for the faint of heart, and Bank of America is notorious for being among the most difficult! I would urge you to work closely with an agent who has done SEVERAL short sale transactions! Ask them all these questions, and more! And no, if you don't know the answer, then there's no stupid question. And yes, typically, you only get the keys to the house after the closing.

Best of success to you in this venture!
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