Great question. While I can't specifically answer because I don't know the specifics, I can help explain the process so you can ask your agent the right questions.
When a short sale is placed on the market, it is always done so with the permission of the current owner. It's very important to understand that the current owner is the title holder of record and not the bank. Once a property is foreclosed the bank has the opportunity to transfer title into their possession, which gives the the authority to sell the property. These sales are REO (Real Estate Owned). In IL, only the title holder can offer a property for sale.
With that said, a property that is on the market, vacant or not, is being sold with the permission of the owner. Why does this matter? Because if the owner is uncooperative, it's unlikely that a property can be resolved in any way except through foreclosure. Once you place your offer on the property, one of three situations will happen:
1. Your offer will be accepted in writing by the seller with a bank approval contingency. At this time, the bank approval process starts, which can include a BPO (Broker Price Opinion) to verify that your offer is at fair market value and that the terms of you offer are in line with the property's condition. For example, if you are using FHA financing, and the property is heavily distressed, the bank may be reluctant to approve your deal unless you have a 203K (repair/renovation financing) loan. This is the best start to a short sale, but is not a guaranty that you will have an opportunity to close.
2. The seller could reject or counteroffer.
3. The seller could verbally accept your offer and tell you to "hang in there." In this scenario, the seller is not obligated to take your deal, but is utilizing it to frame the bank approval. Once the bank approval is obtained they may likely go with your deal, or any other at the table that fits the requirements of the bank.
It's important to get an agent that understands the short sale process. Once you have a great agent, it's equally important to have an experienced real estate attorney. This way, you can track the process with targeted questions that let you know the status, as best as possible. To be clear, currently short sales are never certain transactions. If you need more clarity and certainty, this is not the transaction for you. Most importantly, you have to keep looking and your options open until you have a firm deal. Every bank has a different short sale process and different motivations. Some banks actually make more money on paper when they foreclose. The different incentive structures that banks have can doom some short sale request. It's impossible to know exactly what's going on behing the bank's firewall, so don't over-think it. The best deal in the market is the one you have that can close!
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