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Our short sale offer was accepted by the seller, so how we sit and wait for the bank acceptance. It turns out the house has 2 liens - the first is with Bank of A and we learned that our offer will completely cover that mortgage. However, the 2nd is with a smaller company (not known) and we know that our purchase price will cause a big short for them.
Just interested to know what others experiences with these types of short sales has been? Can we expect the smaller company to accept a loss since Bank of A will be satisfied? Has anyone dealt with a short sale that involved more than 1 lienholder and how long did it take? We're expecting to sit with no communication for at least 3-4 months...maybe longer.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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2nd lien holders scream like stuck pigs, because they know that they are only going to get offered $1000 for their position. I have a 2nd lien holder who says "We're not going to accept any offer in which the real estate agents make more than we do". Ummm excuse me, is it my fault you loaned money to this guy?
If the second lets the situation lapse into foreclosure, they're not going to get anything at all. In most states however, a second lienholder, can go after the borrower for the deficiency.
BofA may take quite a while to get things going, what I've found interesting is that the first lienholder expects the agent to make a deal with the 2nd lienholder.
My short sale offer was accepted by a seller as well. I was surprised that the seller has any authority in the process. It is not all in the banks hands?
I guess I don't understand how brokers come up with the selling prices (though mine is a reasonable price compared to the comps), do they have to run the price through the bank first? I can only find the record of the first mtg, but there is evidence of a re-fi or second in that a lot of upgrades were done about 3 years ago (owner bought in 2001). My best guess would be that the seller owes at least 2x what I am paying.
I checked public records for the city, only the one (2001) mtg was recorded, where should I look for the second or the refi?
I was told that his mtg is through a small, local bank. I don't know if that bodes well for me or not. On the one hand, I many have a decision sooner (it's only been 1 month), on the other hand, they may not be willing to take as big of a hit.
Any short sales experts out there? My agent told me from the get go that it may take 6 months to get an answer, so I don't want to bug him with endless questions (and I assume his commission is minimal!).
My short sale offer was accepted by a seller as well. I was surprised that the seller has any authority in the process. It is not all in the banks hands?
I guess I don't understand how brokers come up with the selling prices (though mine is a reasonable price compared to the comps), do they have to run the price through the bank first? I can only find the record of the first mtg, but there is evidence of a re-fi or second in that a lot of upgrades were done about 3 years ago (owner bought in 2001). My best guess would be that the seller owes at least 2x what I am paying.
I checked public records for the city, only the one (2001) mtg was recorded, where should I look for the second or the refi?
I was told that his mtg is through a small, local bank. I don't know if that bodes well for me or not. On the one hand, I many have a decision sooner (it's only been 1 month), on the other hand, they may not be willing to take as big of a hit.
Any short sales experts out there? My agent told me from the get go that it may take 6 months to get an answer, so I don't want to bug him with endless questions (and I assume his commission is minimal!).
You agent is correct, it may take 6 months (or more) to get an answer. I usually advise to expect at least 2-3 months. If it's critical you have a home in that time frame, then you should continue looking for other possibilities. The odds are not good that this one will close. If there is a 2nd mortgage, then the odds of success are lower yet.
The seller is still the owner of the home and has to agree to the offer before it can be sent to the bank. Most listing prices are not approved by the bank when the home is listed for sale. Most banks won't review pricing until they have an offer.
Seller's set the price (hopefully) based on what other buyers have paid other sellers. They own the property, so they are "in charge."
The role of the lender is to evaluate the hardship/finances/market value and make a decision whether to accept the short pay to release the lien.
Buyer's should know this going into the deal and they should have an out if they find something better.
It's not the seller's fault that the servicers are taking too long.
Whatever rules are in play today, they are likely to change before the deal is done, and are investor driven. FHA, VA, Fannie, Freddie - private all have different policies.
We were told that a 2nd lien would be no problem. The owner accepted our offer. Yea! The bank accepted our offer. Yea! The 2nd lien (with the same bank) refused our offer and the money that the 1st mortgage dept would give them. The owners refused to take out a new loan for the 2nd lien. This dragged on for probably 5 months. No one would give in. The sale fell through and as far as we know, the bank will foreclose.
We are now living in a very similar house in a better neighborhood for us. This was also a short sale, but the owners had already gone through bankruptcy, so the 2nd lien holder couldn't go after them.
Buying a short sale is a very long, emotional process. If you have enough patience, don't fall in love with any house you don't own, and have nerves of steel, you can make out very well.
Listing agents will list short sale properties below market value to get an offer ASAP. Remember, one of the things that the seller needs in order to start the short sale process is an offer. The process can take weeks or take months. Only about 10% of short sale ever closed back in 2008 and early 2009, now that percentage is up to 25-30% as banks are realizing it's cheaper to do a short sale than it is to foreclose. I have submitted several offers on short sales and have had no luck. The chance of closing also depends on the listing agent's experience doing short sales and have motivated they are.
Listing agents will list short sale properties below market value to get an offer ASAP. Remember, one of the things that the seller needs in order to start the short sale process is an offer. The process can take weeks or take months. Only about 10% of short sale ever closed back in 2008 and early 2009, now that percentage is up to 25-30% as banks are realizing it's cheaper to do a short sale than it is to foreclose. I have submitted several offers on short sales and have had no luck. The chance of closing also depends on the listing agent's experience doing short sales and have motivated they are.
Maybe it's in our favor then that our offer was competitive based on the comps (we think it's fair market value and then some). Also, all communication with the bank is being handled by a lawyer instead of agents. Don't most short sales fail because the buyer pulls out? Or is it mostly because of bank non-acceptance?
The chance of closing also depends on the listing agent's experience doing short sales and have motivated they are.
no truer words spoken. its a BIG PLUS if the listing agent and their staff are well schooled in closing short sales. there are enough little timebombs that can go off anywhere along the long process but a good agent knows what to look out for and can minimize potential potholes before they may develop by being proactive.
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