Short Sale approved what is this? (foreclosure, mortgage, lender)

[sunniaz]

If a home is short sale approved what does this mean and how long does it take to close? what would be the total process step by step?
Thanks

[ReadyFreddy]

Usually it means the seller's bank has agreed to sell the house for that price. I don't know if there's a typical length of time but I'm in the midst of one and it's not looking like it's going to take much more than the usual 30 days. But people are working well together.

Be forewarned that whatever comes up in the process, the homeowners usually will not pay for anything-- not the termite treatment, other repairs needed to make the place mortgage-able, nothing. Or at least that's what I'm learning.

[Stokes172]

it means..."don't waste your time" if you want to buy now keep looking!

[sunniaz]

Gottcha, thanks. Do allot of the homes get termites? If you have a brick home do you still get the termites? Also do you usually have to get a termite bond with a company and have them spray & pay a monthly or yearly fee?

[arwenmark]

Originally Posted by sunniaz

Gottcha, thanks. Do allot of the homes get termites? If you have a brick home do you still get the termites? Also do you usually have to get a termite bond with a company and have them spray & pay a monthly or yearly fee?

Yes a brick house can have termites.

[Burning Madolf]

Originally Posted by Stokes172

it means..."don't waste your time" if you want to buy now keep looking!

Can you elaborate? Do you have first hand experience?
I've seen so many, I'm thinking just like you.

[ReadyFreddy]

Originally Posted by sunniaz

Gottcha, thanks. Do allot of the homes get termites? If you have a brick home do you still get the termites? Also do you usually have to get a termite bond with a company and have them spray & pay a monthly or yearly fee?

Every house here either has them or will. Block, brick, you name it. Just plan to have to treat at sale time. Usually it's on the seller. You don't have to have the warranty but once you've (or the seller has) paid for the big treatment, you may as well pay the $120/year or whatever for 'coverage', I figure. Then they inspect annually and treat any signs. And come out when you see signs yourself and treat them at their expense. I don't think your mortgage company cares if you get the warranty, just that you get the big one-time, hole-drilling treatment before closing.

I do think "short sale" without "bank approved" or "already approved" is a sign that it could take 3-9 months. But I've seen several, including mine, that happen about as fast a 'normal' sale.

[AZ Tracy]

Originally Posted by sunniaz

If a home is short sale approved what does this mean and how long does it take to close? what would be the total process step by step?
Thanks

Ask if it is a HAFA (Housing Affordable Foreclosure Alternative) approved short-sale. If it is, and you offer what it is approved at, the lender should issue an approval letter within 10 days. The approval letter will state that the approval is good until a certain date. You can typically close in the same amount of time as a "normal" sale. With any short-sale, you will be purchasing it in its "As-Is" condition. Be sure you get a professional home inspection, and buying a home warranty is usually a good idea too. You don't want any surprises down the road.

[rjrcm]

As indicated by AZ Tracy, a HAFA approved sale is the ideal situation for getting it done in reasonable time, assuming you will pay the approved price.

Many short sale listings will say they are "approved" if a previous buyer's offer was reviewed and approved, but the buyer canceled for some reason. They hope the bank will still honor the last approved price. They may or may not, it could still take a long time to work through. In any case, it's probably better than starting with no prior bank review.

Generally, expect 3-6 months on average. Some are quicker, some longer. The end result may be that the bank won't approve your offer after months of waiting and you have to start over.

[AZ Tracy]

Originally Posted by rjrcm

As indicated by AZ Tracy, a HAFA approved sale is the ideal situation for getting it done in reasonable time, assuming you will pay the approved price.

Many short sale listings will say they are "approved" if a previous buyer's offer was reviewed and approved, but the buyer canceled for some reason. They hope the bank will still honor the last approved price. They may or may not, it could still take a long time to work through. In any case, it's probably better than starting with no prior bank review.

Generally, expect 3-6 months on average. Some are quicker, some longer. The end result may be that the bank won't approve your offer after months of waiting and you have to start over.

Another cog in the wheel, can be that you have full approval of the price and terms, but then the seller is uncomfortable with the verbiage in the approval letter. They refuse to sign and the deal falls apart. I've been told in classes I have taken, that only about 40% of short-sales actually close.