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Hi guys.
I have a question for you
I did an offer in a short sale in which I'm waiting for them to answer.....
so it can take long.
however, in the mean time, other real state agent (lets call #1) told me that this particular property is a short sale that have not been approved yet (fact that the other agent that I work with didn't told me).
Either way, the agent #1 said it is not good to make an offer until the bank approve it. I wonder why? if the property is on the market.
This could be because the process is going to take a long time? longer than the normal short sale?, any bad side for the buyer?
About the offer:
.My offer has a 3 month period (i dont wanna be lock for ever).
.My offer is really cheap.
It depends on the condition of the house and the bank, some short sale I saw with the asking price $249,900 was sold at $202,500 but I don't know how long did it take or how much was the offer. I heard that if your agent is experienced with short sale, you will receive the answer after your offer is submitted only about 3-4 weeks. If your agent isn't familiar with short sale, it'll take you 6-12 months or more ...
It's the seller's agent that has to be good with short sales. The buyer's agent can do very little except structure the offer in a way more acceptable to the bank. Not that they won't change the terms on their approval anyway.
There is no way to predict how long, what price, or whether a short sale will go through. That's why they sell for less, there has to be some incentive for people to deal with the uncertainty.
"Approved" short sale IMHO means very little. It hasn't proven to me to be faster or more certain than others. I've helped buyers offer on Approved Short Sales just to see them go to foreclosure the next week. It depends more on the lender, amount of loss, value of loan, where the seller is in terms of default and foreclosure, and which particular short sale specialist is assigned.
It's the seller's agent that has to be good with short sales. The buyer's agent can do very little except structure the offer in a way more acceptable to the bank. Not that they won't change the terms on their approval anyway.
There is no way to predict how long, what price, or whether a short sale will go through. That's why they sell for less, there has to be some incentive for people to deal with the uncertainty.
"Approved" short sale IMHO means very little. It hasn't proven to me to be faster or more certain than others. I've helped buyers offer on Approved Short Sales just to see them go to foreclosure the next week. It depends more on the lender, amount of loss, value of loan, where the seller is in terms of default and foreclosure, and which particular short sale specialist is assigned.
What it means IMHO???
So base on your comment, it is not bad to make an offer before the short sale is aproved?! I feel that they are handling info in different way, or one of them is not 100% honest with me.
FHA and VA - the loans the sellers have have a pre-approval process.
Conventional loans have different rules, servicers, investors, Fannie, Freddie...they all have a different process. And just because the rule is this way today, doesn't mean they don't change the rule tomorrow and won't tell you for a month.
I have a WF conventional pre-approved, but after 3 months with no offer , their pre-approved price was not true market value.
I just received an email about cooperative short sales, the servicers are wanting more control over the short sale process from the beginning. They are dictating marketing activities, commission, buyer agent coop, documents, market analysis.
Sometimes they hire a third party to negotiate and then the ask the broker to pay a fee to offset their services.
It is true that the sellers agent has alot ot do with getting the short sale approved faster. However, there are times when the bank asks for more info from the buyers and it can takes a week to get the info from the buyer/buyers agent it gums up the works. The keys to a quick short sale are:
1) Having all the correct paperwork submitted in the first place
2) Communicate with the bank and ask if there is anything youy can do to help.
3) get a title search done when listing the short sale so no unknown liens pop up
4) and this is important. Have a title company that responds to all request swiftly and understands short sales and how the bank wants the HUD1 to read.
With short sales it seems like you wait and then when they are ready to move you get rushed for the final paperwork. AI have had short sales done in 3 weeks and in 6 months. There is no sience to it. Stay in contact with the bank and be patient. If your offer as a serious one it should get approved.
To the OP (original poster), a "normal" short sale is one that the price has not yet been approved. The vast majority of lenders will not approve a price unless they have an offer. So for most short sales, the only time they have a price approved is if they already had an offer and the sale didn't close. You said your current agent didn't tell you the price wasn't approved, did they even explain to you how short sales work? Because that is really part of the explanation.
The agent who told you it isn't good to make an offer until the bank approves it is wrong. If you don't make an offer, the bank has nothing to approve. Maybe what they meant to say is that it is better to make an offer on a house that already has an approved price in the first place. I partly agree with that. If time is more important to you, they do usually go faster, but if price is more important to you, they usually aren't the best price out there.
If you have a house you like, and it is a short sale without an approved price, and you wait to make an offer until they approve a price, all that is going to happen 99% of the time, is that someone else will eventually buy the home, or it will go to foreclosure, or the seller will take it off the market and rent it out. The other 1% of the time, someone will make an offer, wait through the entire process, find out what the bank will take, and then not close on the property, opening it back up to other buyers with an approved price. But that approved price won't be a great deal, or else the first buyer would have closed the deal.
It should always be explained to a buyer what a short sale is before they make an offer and the difference between approved and not approved. There is a much bigger risk that it will never close. If you are someone that really wants to stay in a certain time frame as far as when you need to move you should steer clear of them. You may be in escrow for several months only to find out you can't buy the house.
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if the property is on the market.
