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Old 06-12-2009, 01:02 PM
 
270 posts, read 966,418 times
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I've been house hunting for an investment property for about 6 months now.
Sometimes (like today) I see a brand new listing and in the description it is marked a short sale. Is it really a short sale from day 1?
I had read somewhere else that most banks require the property be on the market 3 months before the bank will approve a short sale. Is that true?
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Old 06-12-2009, 01:10 PM
 
28,455 posts, read 85,157,040 times
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GREAT QUESTION!!!

You have hit upon one of the many "well maybe this will work" aspects that are now common in the distressed real estate market -- IF the lender has a RULE that they will NOT allow a short sale until a property has been on the market for 90 days or some other length of time with no offer then you would almost certainly be SUCKED INTO THE HOLDING PATTERN of the lenders arbitrary rules.

A seller CAN get lenders approval to attempt a short sale if the lender KNOWS that there is no way that they seller is going to get an offer for what they own based on the comps, but again, there is no way for a potential buyer to know just high up that approval came from NOR if the lender will have ANOTHER rule change that forces the deal into a terrible waiting period.
VERY VERY ANNOYING and potentially COSTLY for all parties!
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Old 06-12-2009, 01:16 PM
 
270 posts, read 966,418 times
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Exactly! I'm very interested in this property, but I don't want to get suckered in if it is just a homeowner who is doing a "well maybe" situation.
Thanks chet everett
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Old 06-12-2009, 01:42 PM
 
Location: Salem, OR
15,539 posts, read 40,308,808 times
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Quote:
Originally Posted by srnyong View Post
I had read somewhere else that most banks require the property be on the market 3 months before the bank will approve a short sale. Is that true?
I've never heard that. You might be confusing this with some lender's requirement that the SELLER be behind on their payments for 3 months before they will consider a short sale.

Yes...a home can be advertised as a short sale from the get go. Whether or not it is a short sale that has a realistic chance of closing is a different story. The listing agent needs to be asked some pointed questions about the nature of the hardship of the sellers, their experience with short sales, if they are outsourcing negotiations, how many lenders are involved, WHO are the lenders, is there PMI, etc. Once you have the answers to those questions you will have a general idea of the chances of a successful short sale.
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Old 06-12-2009, 01:48 PM
 
28,455 posts, read 85,157,040 times
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Short of having an "inside connection" at the lender the other way around this MIGHT be to investigate the lender's other real estate operations for a "back door".

For instance, I know that a very active national lender near me has several REOs listed with local real estate agents, they in turn have access to an "asset manager" that reports up a chain to a loss mitigation manager that has responsibility for a larger pool of properties.
IF it turns out that you can get a message passed up that chain there is a chance that someone can give you an accurate idea of where the lender is at in the process of approving the short sale.

Big IF and lots of opportunity for the "telephone game" to get your message garbled, but this is fault of LENDERS that are not equipped to deal with the mess they have on their plates. For all the time they put into MARKETING loans and services you would think that MAYBE they would figure out a better way to give ACCESS TO INFORMATION that might actually help them PRESERVE value of properties that are going to age about as well bananas with black spots...
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Old 06-12-2009, 09:25 PM
 
Location: Palm Coast, Fl
2,249 posts, read 8,883,933 times
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There are no set rules regarding short sales as far as the banks are concerned. Some require the sellers to be behind and no requirements for having had the home up for sale. Some will do a short sale with the seller not being behind and the property not having been on the market for any length of time.
Other will require the house having been listed for a certain amount of time. Some actually take into account where the house is located, if it's a 'distressed' state, etc.
The only set rule that I know of, in my area, is that the seller has to reveal that the listed price of the property is for a short sale situation (regardless of what stage/approval the seller is in) and yes, that would be from day one.
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