What happens after a deadline for a short sale?

Asked by Samanthaolson32, Oshkosh, WI Mon Sep 24, 2012

Today is the deadline for the bank (wells fargo) to give us an answer on if we (the buyer) have an accepted offer for a short sale home. We have an accepted offer from the sellers and the second mortgage, we are just waiting on the main one. The deadline is today and I am wondering if they do not give us an answer today what happens next? Do you do another contract? Just wait it out? Any information would be great, thank you.

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7
Nan Brennan, Agent, Appleton, WI
Mon Sep 24, 2012
Your agent needs to extend the deadline..
1 vote
Wells Fargo..ohhh ..Is your agent in contact with them, what have they told him/her? When I work a short sale, I am in daily contact with the lender to keep up on what is going on.
Flag Mon Sep 24, 2012
Scott Godzyk, Agent, Manchester, NH
Mon Sep 24, 2012
1st Deadlines are WORTHLESS. They actually work against you. The bank will take as much time as they need to get the process complete, a deadline may force them to not even try as they will not want tio spend tiome or money to get the appraisal done and short sale processed in a period of time that it is impossible for them to do. The KEY is to have the sellers negotiator speak with the banks negotiator and get a real time update on where they are, then they can let you know and you can decide to stay with the home and wait or to withdraw.
1 vote
Shellie Mathe, , Oshkosh, WI
Tue Dec 3, 2013
While some short sales move along in a timely manner (45 - 60 days) most take much longer. To understand why this happens you need first to understand a short sale. A short sale happens when someone owes more on the property than they are receiving in the sale. This does not always mean the buyer got a good deal, only that the bank gave a loan for more than the current market will return. Many times when you request a short sale there are several layers of approval necessary before a lender can agree to "write the shortage off". (and, yes I know that sometimes they put a lien against the seller for the shortage). Before they can approve the short sale a lender may need approvals from the investor who bought the loan, the Private Mortgage Insurance company in addition to their own management. To get this approval they my need to prove why they should take less than they are entitled. This probably involves a financial statements from the sellers showing they are not capable of paying the shortage, an appraisal showing that the property is really not worth more and a preliminary closing statement showing who gets a part of the money from the sale. If there is a second mortgage the same process could exist there also. These things take time - sometimes a lot of time. While I do not want to discourage you from buying the home you desire, I do want you to go into the process with realistic expectations. Short sales can take a long time - 3 months, 6 months, 9 months are not uncommon. And some of them never get approved. The seller is asking the bank to take less money that they are owed - banks are very reluctant to do that. Each sale is different. To avoid frustrations later ask a lot of questions, pick an agent that is very familiar with the short sale process and then allow enough time for the approvals to get done.
0 votes
That question was posted last year.
Flag Tue Dec 3, 2013
Matthew Heit…, Agent, Stoughton, WI
Tue Oct 9, 2012
I tend to agree with Scott. I have found that the banks work on their own timeline. It's up to the buyer and seller agents to keep coming up with the proper extension contracts during the process.
0 votes
Linda Grey, Agent, Port Orange, FL
Tue Sep 25, 2012
The deadline really benefits you more than the seller's lender who will do things in their own time frame. If your deadline is up you have the ability to walk awak from the property if you have found something else. If not and you want to wait it out on this property your agent should have notified you that an extension needs to be done and it should have been signed and submitted a week to 10 days ago not at the last minute because the seller has to sign it as well.

Communicate with your agent, and your agent should be communicating with you.

Best wishes!
Web Reference:  http://www.TheBeachLady.com
0 votes
Shanna Rogers, Agent, Murrieta, CA
Mon Sep 24, 2012
Hi Samanthaolson32,

If you still want the property, you need to do an extension or the contract will be 'expired' and therefore it won't be a contract anymore. Make sure you do the extension before the current contract expires (midnight tonight, I'm assuming).

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes
Debby Thomps…, Agent, Wauwatosa, WI
Mon Sep 24, 2012
Short sales take time. You have to be willing to extend the offer. As the other have told you the lenders work at their speed. You have to decided if you are willing to wait it out. When you have the listing you try to get back up offers just in case the buyer decides not to wait it out. When they clear your offer and approve the short sale they give you a month to close. I call this processes wait..wait ..wait and they they are in the hurry to close. They will set a date and not be very willing to extend it out when they are ready. Sorry to say but this is the way short sales work. We are all subject to the lenders time frame it has nothing to do with ours. The negotiator may have 300 files they are working on at once. Their are lots of things that has to be gathered up and sent for approval. If their is private mortgage insurance on it, then that is another processes it has to go through for approval. So get with your agent and talk about how long you are willing to wait for an answer.
0 votes
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