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If we put in an offer on a short sale and put money down, how long would it take to approve/disapprove of the offer? If not accepted, would we get our money back? If so, how long would it take to get that money back?
If we put in an offer on a short sale and put money down, how long would it take to approve/disapprove of the offer? If not accepted, would we get our money back? If so, how long would it take to get that money back?
I suggest you use a Realtor who understands and has experience with short sales; the same goes for the Real Estate attorney you hire.
Without knowing more details about the transaction, commenting on a timetable is not possible.
Yes, you would get your money back if your offer is not accepted.
A bank needs to approve a short sale, because they are going to take a haircut on the debt (which they are very reticent to do these days, who owns the debt might be an issue). Sometimes a bank might have pre-approved a short sale with the "home-owner" before they are listed as such.
I bought REO in 2008 in FLA; in REO the title of the property is with the bank so whatever needed to be written off has been written off. The bank loves to get a cash REO deal because it takes a property off of inventory. I have yet to see a fairly priced REO on long island (they are all bad deals). I did not want to be in time-limbo with a bank as to whether or not they would accept an offer.
You might want to frame your offer to a timeframe and/or make offers on multiple properties.
This is from Bank of America from the Sellers perspective (since they are driving the process - bind to the bank);
We'll complete the evaluation process, reach a decision and get back to you in approximately 30 calendar days after your real estate agent has submitted the offer to us. During that time, we'll work to gain approvals. Even if you’re pursuing a short sale with us, in most cases there’s a third party, known as the investor, who has ownership of the loan. We’ll need their approval in order to finalize the short sale.
We'll also work to determine the fair market value of the property. A professional appraiser will perform a valuation of the property at no charge to you. He or she will consider the sale price of other houses of similar size in your neighborhood.
Once the fair market value is determined, we may make a counteroffer. It's not unusual for potential buyers to withdraw offers all the way up until the closing, so during this time, we encourage you to continue marketing the property.
When all necessary parties have accepted the offer, we'll provide you with an approval letter releasing the house for purchase.
NEVER buy a short sale home. It always ends up being a bad decision. People who claim to know a "friend" that made a good deal buying a short sale home are lying. Don't trust those lying SOB's or any other a-hole who claims to make money off of short sales. Its all a scam.
NEVER buy a short sale home. It always ends up being a bad decision. People who claim to know a "friend" that made a good deal buying a short sale home are lying. Don't trust those lying SOB's or any other a-hole who claims to make money off of short sales. Its all a scam.
Don't be stupid.
I don't agree; you always want to buy "in distress." It also costs nothing to make an offer, or to make any offers.
The problem is there is a spread in perception. The perceptions have to be within 20% of each other or you are wasting your time. As you can see from the "Bank of America" quote I referenced; the bank is going to make sure their ask is within +/- 20% of the price based on "NYS Licenced Appraisals." The appraisals are based on past sales so they allways be inflated to the current bias.
The only perceived "bargains" I have seen recently was a $385,000 trashed salt-box house near a main road with an illegal basement that needed a total gut in Plainview that was searching for a cash sale. The starting bids on Maltz Auctions - Maltz Auctions are also "bargains." Both those "bargain" sources for cash buys are still VASTLY inflated. I am sure the Maltz auctions get bid up to absurdity.
The DISTRESS timing is not present on LI; even when the properties go into distress en masse (which they will) ; you still have the taxes and debt of the municipality. Cleaveland comes to mind where you can buy a brownstone mansion in good condition for $240,000 but the taxes are $20,000 to $30,000. (because the city is broke, it had the same expenses when that house was worth an inflation adjusted $1,000,000 in times past.
I guess we lucked out with ours. The hardest part about the short sale was the wait. We went 3 months without hearing a peep from the (sellers) bank but once we did things moved fast and we closed within weeks. You can put a time frame to receive your down payment back. There is no set time as to when a bank will respond. A lot of that will depend on the bank and the competence of the seller's realtor and attorney.
currently in the process of trying to buy a short sale house. i'm already hating the process of it and i am ready to move on and never look back at this. my husband is a banker and quite familiar with the process and ensured me that short sale turn around are 3 months or less. the seller's agent doesn't seem like she's knowledgeable about short term sales and it's not going smooth at all.
Tried buying a short sale and it hadn't gotten approval for over a year. We eventually pulled out of the deal and went for another house. Money was back in our pocket soon after, but we did lose some on inspection costs.
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