Third Time's The Charm - Another Short Sale Property Listed By F.C. Tucker 1st Team Real Estate in NW Indiana and CLOSED.
Back in mid April we listed a Property in Porter County, IN subject to lenders approval of a short sale.
First, you need a sale-able property in good condition and a cooperative seller. The short sale process is MUCH more involved than a traditional real estate transaction.
Next, you have to hope for a negotiator from the lenders loss mitigation department assigned to the file who is adept at the process and at communicating in a timely fashion.
WE were very fortunate = we HAD BOTH OF THE ABOVE !
However finding a READY, WILLING and ABLE buyer was a journey of 5 months.
We had an offer within 7 days of listing the home on the MLS which fell about 25 days later due to Buyer unwillingness to wait for a short sale approval.
Now in Indiana, we have a newer law = IN HB 1359, so the time frame for approvals is to acknowledge the offer within 10 business days and to accept/counter or reject the offer within 30 business days.
Sure enough, we got the approval a week after the buyer had requested mutual release.
Meanwhile, we were having showings on the property. Even with an accepted offer we encourage all our sellers to continued the show the home - Sale Pending Does Not mean SOLD these days! Backup offers are always welcome on our listings.
A few weeks later another accepted offer was submitted, and another processor assigned. Starting all over again, we resubmitted everything and about 45 days later....
Bingo! we get a short sale approval (the second time).
In the meantime, a 3rd offer (Backup offer) was in place. (There were even more offers submitted on this property, however they were so low, and asking for even more, that our seller did not accept them).
All along, we informed the Buyers agent that there is not alot of time to wait to accomplish agreed upon contract erms of due diligence(i.e. inspections, appraisals, surveys, underwriting, etc..) once the short sale is approved.
Alas, the contract expiration date came and went with no mutual extension for time granted.
The backup offer became the primary offer. For the third time, we resubmitted the new paperwork for the file (by this time Jeff and the loss mitigation processor were on a 1st name basis:)
We received an approval even quicker than the 1st or 2nd time and closed within 31 days of submitting the offer to purchase to the lender!
Lessons learned =>
'Tis a lesson you should heed, Try, try again. If at first you don't succeed, Try, try again.
Short Sales are NOT for every Buyer
You should be willing to wait for an approval. The experienced listing agent will have a good idea of this time frame as they have already started submitting the short sale package and talked to the lender about applicable state laws verses company policy time frames. Some special circumstances may take longer.
You should be willing to do your due diligence according to the terms and conditions you agreed to in the purchase agreement. This means risk that you, the Buyer must be willing to accept. (i.e. the cost of doing any inspections, appraisal, etc.
The lender of a short sale property DOES NOT have to accept your offer. A short sale is NOT a fire sale:) they have done a BPO and their investor has a bottom line on what they are willing to accept.
Backup Offers can move to the primary position once the expiration date of the purchase contract has passed and there is no written extension of time in place agreed upon by all parties. Being a backup offer in a short sale may be worth it.
If you are considering buying or selling a home subject to lenders approval of a short sale - work with a REALTOR experienced (SFR) in this process.
Our references & client testimonials are available.