Help! I’m Making an Offer on a Short Sale Listing!! #6

By
Real Estate Agent with Keller Williams Eastside Market Center 10694
http://actvra.in/Hn9

Help! I’m Making an Offer on a Short Sale Listing!! #6

Help! I’m Making an Offer on a Short Sale Listing!!  #6

How can the bank ruin our sale?Help! I’m Making an Offer on a Short Sale Listing!! #6

If the bank has to forbear any money, then the bank is defacto in charge of the sale.

If your offer on the property is for an amount that does not fully pay off the underlying mortgage or mortgages, then the bank is involved in the sale.

The seller still owns the property, so your offer is to the seller.

However, the seller has no equity. No money in the game. The seller will sign your offer, then it has to be presented to the bank (or banks) to determine if the bank is willing to lose the amount of money required to close.
Help! I’m Making an Offer on a Short Sale Listing!! #6
1. The bank has to determine the price it will accept. It is almost always higher than the asking price.
2. The bank sets the time line. Although there is a new promise of short sales from start to finish in 60 days, the normal time to do a short sale has been 90 days or more.
3. The bank works over the seller to make sure they do not have money to contribute to the sale.
4. The bank can add a deficiency judgement against the seller as a condition of sale.
5. The bank can deny your request for seller paid closing costs to help you with the purchase.Help! I’m Making an Offer on a Short Sale Listing!! #6
6. Ultimately, the bank can foreclose on the house before the sale is consummated.

So, although your offer on a short sale listing is to the seller, the bank is the ultimate determiner of price, timing and conditions of sale.

close

Re-Bloggged 3 times:

Re-Blogged By Re-Blogged At
  1. Erica Ramus 03/20/2012 04:15 PM
  2. Judi K Barrett 03/20/2012 06:17 PM
  3. Gabe Sanders 03/26/2012 04:13 AM
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help im making an offer on a short sale listing 6

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Rainer
128,954
Insurance Solutions Unlimited,LLC
Insurance Solutions Unlimited,LLC
Insurance Solutions Unlimited, LLC

Phil, Excellent information on the Short sales and Banks. The Bank is calling all the shots

March 20, 2012 03:32 AM
Rainmaker
850,101
Wayne Martin
Sales Manager - New Homes & Condominiums Division
Michael Saunders & Company

Fllows the old theory of "legal title" that the defaulting party holds and the "equitable title" the bank has. You have the front man and the decision maker. One has skin in the game, the other has to determine what kind of skinning it is willing to take!! Enjoy your day!

March 20, 2012 04:10 AM
Rainer
180,855
Keith Lawrence
ABR, CDPE, SFR, 203K Specialist
RE/MAX Properties

Sellers are dependant on the bank accepting the offer on a short sale.  But the same holds true for a buyer applying for a mortgage.  Deals have busted when buyers cannot get a loan even though they were pre-approved a month ago by the lender.

It sounds like the BPO came in high and you need the bank to do another one.

Good luck with your deal.

March 20, 2012 04:54 AM
Ambassador
1,637,838
Fernando Herboso - Broker for Maxus Realty Group
301-246-0001 Serving Maryland, DC and Northern VA
Maxus Realty Group - Broker 301-246-0001

Very good points. . a short sale does not have to be a nightmare if negotiated skillfully and prepared ahead of time.

March 20, 2012 05:05 AM
Rainmaker
145,270
Richard and Jean Murphy
(207) 712-4796
Harborview Properties

Phil, Be aware that the Private Mortgage Insurance company can, and often does, rear it's ugly head after the deal is approved by the lender. It is not uncommon for the PMI carrier to require an unsecured promissory note from the seller under the threat of stopping the deal. The lender knows they are out there and are reluctant to inform borrowers of this fact until the 11th hour.

March 20, 2012 05:22 AM
Rainmaker
891,496
Michael Setunsky
Your Commercial Real Estate Link to Northern VA
Michael's Commercial LLC

Phil, he who controls the money rules the world. At best the seller can hope to get out from under it free and clear.

 

March 20, 2012 05:25 AM
Rainmaker
655,515
Pamela Seley, REALTOR®
Menifee Lakes California Real Estate
REALTY EXECUTIVES OTF

Many buyers do not understand how short sales work, as well as agents. Seller has to agree, but the decision is up to the lender. 

March 20, 2012 05:51 AM
Rainmaker
936,319
Adrian Willanger
Profit from my two decades of experience
206 909-7536 TheHomeFunnel.com

Phil, very good information for both agents and buyers who haven't had short sales experience(s). 

March 20, 2012 05:53 AM
Rainmaker
1,199,932
Richie Alan Naggar Author PEARLS SERIES of books
on LIFE and LOVE plus Real Estate too!
People first then business! Ran Right Realty Riverside, Ca

SS are not for everyone but it appears to affect quite a few. When a short sale needs to get done...get an agent involved and then be prepared to hurry up and wait. I for one will be glad when they go their final way

March 20, 2012 06:26 AM
Ambassador
1,089,479
Melissa Zavala
Broker, Escondido Real Estate, San Diego County
Broadpoint Properties

As for #4, this does not apply in the state of California. We have a Senate Bill that protects from deficiency in short sale.

March 20, 2012 06:41 AM
Rainmaker
158,785
Angelica Blatt
Selling the Monterey Peninsula over 15 years!
DeLuca Real Estate

I am sure that most consumets trying to buy short-sales do not completely understand this process. Thanks for the good information.

March 20, 2012 01:19 PM
Ambassador
1,227,260
Erica Ramus
MRE, Schuylkill County PA Real Estate
Erica Ramus - Ramus Realty Group - Pottsville, PA

I am teaching a short sale success course tomorrow. It is a timely topic for buyers and sellers to understand.

March 20, 2012 04:16 PM
Ambassador
1,859,187
Judi K Barrett
Broker/Owner, Integrity Real Estate Services -IDAB
Judi Barrett~Integrity Real Estate Services~Idabel, Oklahoma

So well said.. any buyer or seller thinking of being involved in a shortsale needs to read this post.

March 20, 2012 05:52 PM
Rainmaker
572,316
Phil Leng
Phil Leng Team - Residential Real Estate Experts &
Keller Williams Eastside Market Center

Thank you so much for your comments.

It is written for three buyers I have right now who are looking at short sales and making offers.

Phil

March 21, 2012 02:56 AM
Rainmaker
628,907
Liz Wallace
Broker C21 Sherlock Homes, Rockville Centre, LI, N
Century 21 Sherlock Homes

Would you mind if I shared this with my Agents.  I'll check back to see if it's OK.

March 21, 2012 06:54 AM
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Rainmaker
572,316

Phil Leng

Phil Leng Team - Residential Real Estate Experts &
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