What are the normal process to do buy short sale house/apt.?

Asked by Yingbrooke, 01609 Wed Jul 20, 2011

Hi everyone,
I am interested in one short sale house, I used to tried to buy one of such kind, but it took too long, so I took the deposit away. So I am wondering what are the normal steps to buy such a house? Who will decide which offer to take, the owner or bank? Before the final approval, can I take my deposit back? What are the special places differing from other deal? Thank you for your answers and have a good day!!

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5
Jack Larson, , Worcester County, MA
Thu Jul 21, 2011
I am only guessing that you did not work through an agent the first time? If you did the agent should have answered all these questions for you. Anyway, the process is initially the same. The agent will write your offer and present it to the sellers agent. The seller(the owner ) selects the offer to present to the lender for lenders approval. This is where the delay occurs. If the lender does not feel the offer is enough it will wait sometimes months asking the buyer for more money while also deciding whether it is more advantageous to the bank to accept the offer or to foreclose on the property. If the buyer is willing to wait it out many times the bank will finally choose to accept the buyers original or increased offer. The buyer should put a minimal deposit down initially, even though I have never seen where the deposit is not returned. I personally do not send my buyers check until I receive the approval from the bank, not the owner.
0 votes
Elaine Evans, Agent, Melrose, MA
Wed Jul 20, 2011
Yingbrooke,
Short sales are very tricky now. My last one took 8 months so there is no time frame. They are seemly getting a bit more proactive. If you want a short sale it may be a long time but you can get a good deal. There are alot of things to look for in a house if this is what you decide to buy. Short sales are virtual, nothing signed most of the time until the actual contract comes. Offers depend on the bank and how they would like them, one or more than one submitted. Realtors do not control how offers go. If you would like to go over the process of how to buy a short sale, I am happy to send information to you.

Good Luck!
Elaine Evans,GRI,CBR,CSG,LMC
ReMax Vision
1 West Boylston St., Ste 305
Worcester, MA 01605
508-954-9019
http://www.greaterworcestercounty.com
0 votes
Angela Dolber, Agent, Whitinsville, MA
Wed Jul 20, 2011
Hello Yingbrooke,

I wish there was a simple answer to give you on short sales, but there isn't since all banks deal with the sellers differently, and one short sale may not be the same as another. Many take months to work with because the seller is upside down on their payments on the home, thus contacting the bank to ask them if they'll take a reduced amount to pay off their home and sell the home at market value. If the bank says "yes" to that idea, the house is listed and the homeowner has to provide proof of their hardship to the bank and other paperwork as well.

It's best to work with a professional realtor who has done short sales before, first, to make sure the listing agent also knows what they're doing when listing the short sale, and second, so the realtor can give you this type of advice as to how to proceed and protect your interests and deposits when buying a home. Once an offer is submitted on the home, the agent presents it to the seller for approval, but the bank has the ultimate say on the approved purchase price, trying to recoup as much of the money owed them as possible. Because banks aren't in the business of selling homes, they usually have a negotiator to work between the bank and the listing agent, so communication may take awhile to sift through the offer amount and contingencies, etc.

Yes, most times you can get a good deal on buying a short sale, but you need to be patient because there is a lot of red tape and trying to work with the owner on making the offer happen that will satisfy what is owed to the bank. If you have any other questions or would like to have an agent help you through this process, please feel free to contact me anytime with questions.

Angela Dolber
Prudential Prime Properties
508-826-8553
angeladolber@gmail.com
Web Reference:  http://www.theDolberteam.com
0 votes
Yannis Tsits…, , 01742
Wed Jul 20, 2011
Hello Yingbrooke:
Question: So I am wondering what are the normal steps to buy such a house?
Answer: Asap you locate the house that you want to buy, you put an offer with a buyer's agent who is familiar with short sales.
Question: Who will decide which offer to take, the owner or bank?
Answer: The owner subject to lender's approval
Question: Before the final approval, can I take my deposit back?
Answer: If you make your offer subject to lenders approval by XYZ date and your mortgage contingency by the same date, yes, in case they lenders does not provide the SS approval.
Question: What are the special places differing from other deal?
Answer: Subject to lender's approval, ahead of time is good to know how many liens are on the property,
also how far in the SS process the home owner is (in other words, have they submitted the SS package information and application that is required by the lender? Has a BPO been done? Is this a HAFA SS? etc)

Thank you for your answers and have a good day!! Answer: You are welcome & choose wisely.

Yannis
0 votes
Valerie Mitz, , Webster, MA
Wed Jul 20, 2011
Hi Ying,

Unfortunately short sales often take a very long time. The process can vary differently from sale to sale and bank to back. Usually you submit an offer and the owner accepts it first. Then the bank has to give a final approval. I've seen some banks take as short as 6 weeks to respond and as long as 1 year. It doesn't matter whether you're a cash buyer either, the banks have a process they need to go through and they often drag their feet.

On the offer form you likely filled out a date at which the offer would expire. If the bank doesn't respond within that date you have the right to get your deposit back or extend the date.

I hope this information is helpful and if you have any additional questions please don't hesitate to contact me. 774-314-1825.
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