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Asked by Shawn, California Thu Aug 7, 2008

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Reaction Rea…, Agent, Rancho Cucamonga, CA
Thu Aug 7, 2008
70% of short sales go into Foreclosures, I recommend that my clients overlook these "short sales," because they are quagmires and there are so many Lender Owned Properties, why bother?
1 vote
Chelsea Cann…, , 95370
Thu Aug 7, 2008
It is really up to the bank on how long it takes. If you are working with an experienced agent they will do their best to stay in contact with bank in order to get a response as quickly as possible. This process can take weeks or months depending on the amount of bank inventory, the nature of the offers (high/low, contingencies/no contingencies), and how many personel the bank has working in that department. The agent may or not be able to share the information of the other offer, that depends on their agreement with the bank on confidentiality of offers. Best of luck!
1 vote
Diana Margala, Agent, Rancho Cucamonga, CA
Thu Aug 7, 2008
Hi Sawn:
The timing depends on the short sale package and the amount of case load that the bank has. If the package is complete and their case load is not horrific then they should get back to the listing agent within 30-45 days. Then usually the banks want you to close ASAP about 21 days.

The other agent can talk to your agent about the offer, but many don't. Their fiduciary duty is to get the most money from the person who has the ability to purchase the home, so depending on how they interpret that and what their office policy is they may or may not provide your agent with any information about the offer.

Good Luck if I can be of any further assistance my direct line is 909-945-5763

Diana Margala
Web Reference:
1 vote
Arlene Varney, Agent, Pataskala, OH
Thu Aug 7, 2008
The bank should let the listing agent know which offer they choose or more than likely they may do a counter offer. How quickly the bank will get back to the listing agent could depend on getting all the short sale paperwork from the current homeowners. Hope this helps. Good luck!
1 vote
Diana Margala, Agent, Rancho Cucamonga, CA
Fri Aug 8, 2008
All of those people are connected to the bank. This is the general process after an offer is received, each bank has their own procedure and their own guidelines, some are easier than others.

1. The listing Realtor submits a package that is required by the lender. (Each lender has special specifications that are sent to the listing agent. (The listing agent had to get a signed paper that gives them permission to speak to the owner’s lender, without that they can do nothing. That is the reason the buyers agent or the buyer cannot speak to the lender directly because they do not have permission from the owner of the property to speak on their behalf). With that package along with many other items, the agent needs to send an estimated HUD-1 to let the lender know what the costs will be that will need to be paid through the escrow and this gives the lender the information to know what they will be netting with the sale. (How much money they will be receiving from the close of escrow).

2. Once the package is received it is check by an agent of the bank who makes sure all of the items that are required are in the package, if everything is there it is then assigned to another person who becomes the representative that the listing agent communicates to. (Sometimes called the negotiator).

3. Once assigned that person goes over the package and usually orders a BPO (broker price opinion), even though the agent has submitted one with the package that one is considered only as a reference and it is also believed by the bank to be a conflict of interest.

4. Once the BPO is returned to the lenders representative uses a formula to see if the offer will fit within their criteria (usually needs to be within 90% of the estimated value). If it does most of them then order an actual appraisal.

5. Once the appraisal is received then the lenders representative sends the work up sheet. They then make a determination as to what they are willing to accept based on the HUD-One, what they will allow to be paid through escrow and how much the net to their company and how much the loss they will incur by accepting this offer. They then send it to be reviewed by management or investors or both. All of this again has to meet certain criteria within the establishment that holds the loan.

6. Once the management receives the paperwork, they verify everything and go over the figures and then determine a final yes or no…usually this coincides with the representative has indicated that they think the management will accept, but it doesn’t always, so as a listing agent we still are not sure until we get the final approval in writing from the lender. (And then it needs to be checked once again to make sure all of the numbers fit with what the lender has sent us.)

7. Once the management comes to a determination they will then give the representative an OK as to the acceptance of the offer and the representative will contact the listing agent and ask how fast you can close. Usually they want you to close in about 21 days. They will provide written approval after they speak to the agent identifying many times the borrowers name, the amount that the net that they will accept, and the closing date that this must all be completed by.

If there are two lenders (this is much harder because the first needs to give money to the second). This whole process is then completed by the second also and now you have to get two institutions to give you an approval. (Usually it is done simultaneously) If there are two loans from the same institution then it is not as much of a problem.

This is just a brief summary as to what takes place, hopefully it will help you and other buyers to understand the process and why it takes so long. One of the negotiators that I worked with had 300 files on her desk at the time she was working with me, so you can see it is a timely process and a lot of people are involved on the lenders end, as there should be, they are loosing a lot of money when they forgive the loans many times as much as $100,000.00 or more.

If you have any questions and I can be of help, please give me a call.

Diana Margala 909-945-5763
0 votes
, Home Buyer, Peoria, AZ
Thu Aug 7, 2008
I have placed offers on 4 properties since June. Two were bank owned and two were short sells. Status on the two bank sold at 30K above list price, the other one has never even responded to my offer. On the two short sells, one asked for a bank statement to show proof of funds, the other one I made an offer on 7/9/08. There were 4 offers. - 3 at list price and all asking for down payment assistance. I went in above list price and did not ask for any assistance. The seller's realtor took the house off of the market and listed it as pending based on my offer. In the past 30 days it has been through an appraisal by the lender, assigned to an asset negotiator and then this week moved to an invester's group...and it could take another 2-3 weeks to know something. Not sure who all of these people are, but believe they are all connected with the lender. I contacted the seller's realtor directly last week and asked him if I should be looking at other properties.....he advised he has been in contact with the lender and is confident it will go through based on my offer as I have been preapproved by that lender and have an excellent credit score. I have looked at alot of bank owned foreclosures and short sells. I have found many of the foreclosures are offered at a good rate but be prepared to invest money to make it liveable. Most of them were in terrible condition. I agree there are hundreds of homes out there but depends on the condition you are seeking. I am looking for something move in condition and that has been difficult to find in my price point. The one's I do find go quickly. I would say to stay on top of your realtor to give you frequent updates. It is a very frustrating process. If you can't wait, there are alot of other options.

Shirley - Peoria, AZ (northwest suburb of Phoenix) -
0 votes
Linda, Home Buyer, Sycamore, IL
Thu Aug 7, 2008
My personal experience has been I didn't even know it was a short sale till well after the offer was made. I have been approved since may 20 and the loan still has not closed? Go figure. If this date misses I am dealing with someone else.
0 votes
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