Subject to 3rd party approval

[TeamBenya]

Originally Posted by Senior Loan Officer

This means that the home is set up for a short-sale, and the sales price has to be approved by the lender/bank. And yes, you can get good buys on short sales.

Not necessarily. 3rd party approval means they need the bank approval to sell. it does not necessarily mean that it is a short sale, although any short sale DOES requires 3rd party approval. I basically means the owner is behind on the mortgage. Hopefully they have negotiated short sale terms, but all that depends on how well they are communicating with the bank and how skilled their realtor is in negotiating short sales.

[Prommie]

subject to 3rd party approval means the owner(s) owe more to the bank then the value of the home and can not afford to contiune to pay the mortgage due to a hardship homeowners are placing their homes on the market for sale. If a contract comes in , it is then submitted to bank for approval- The OWNER IS STILL in Prcession of title- It is NOT owned by the bank- Most banks takes 6 months to give an answer although I have seen deals close in 30 days- But the bank is NOT the owner- It's a long process- and patience is key

[TeamBenya]

Originally Posted by Prommie

subject to 3rd party approval means the owner(s) owe more to the bank then the value of the home and can not afford to contiune to pay the mortgage due to a hardship homeowners are placing their homes on the market for sale. If a contract comes in , it is then submitted to bank for approval- The OWNER IS STILL in Prcession of title- It is NOT owned by the bank- Most banks takes 6 months to give an answer although I have seen deals close in 30 days- But the bank is NOT the owner- It's a long process- and patience is key

Not quite. Third party approval can also be subject to construction liens, estate sale approvals, or even the approval of a reloxation company. any number of situations where someone other than just the listed owner is due a cut of the proceeds may be a "third party approval" situation.

In the current real estate market, "3rd party approval" is the typical phrase used for short sales, but the third party is not exclusively a bank, it can be a variety of situations. Although seeing it in reference to a short sale is most common, it is not the only instance in which the term may apply.

[Prommie]

Originally Posted by TeamBenya

Not quite. Third party approval can also be subject to construction liens, estate sale approvals, or even the approval of a reloxation company. any number of situations where someone other than just the listed owner is due a cut of the proceeds may be a "third party approval" situation.

In the current real estate market, "3rd party approval" is the typical phrase used for short sales, but the third party is not exclusively a bank, it can be a variety of situations. Although seeing it in reference to a short sale is most common, it is not the only instance in which the term may apply.

it's a common word used in all forms of sales- typically - based on the question purposed from the original posting-
as an agent in The State Of NJ- with most of my deals based on subject to 3rd party approval- I thought I would referrence - the proper definition- to clairfy-
Short- Sale- Loss Mitigation-
In real estate, a short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold.[1] In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank's loss mitigation or workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Many Short Sales leave a deficiency balance for which the Mortgagor / Borrower is still liable. In 99% of all cases it is not a settlement-in-full. A deficiency balance will remain as a potential liability for the Mortgagor / Borrower. The bank's opportunity of pursuit of a deficiency judgment will vary from state to state

Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower's financial situation. An important thing to know about a short sale is that it has to be handled by a real professional who knows how to work these deals. Most realtor's don't even handle short sales. The reason is that real estate short sales are a complex, tedious, and a time consuming task.

A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on the most economic way for the bank to recover the amount owed on the property. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. A bank will typically determine the amount of equity (or lack of), by determining the probable selling price from a Broker Price Opinion BPO or through a valuation of an appraisal. For the home owner, advantages include avoidance of a foreclosure on their credit history and partial control of the monetary deficiency. A short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.

Short sales are common in standard business transactions in recognition that creditors are not doing debtors a favor but, rather, engaging in a business transaction when extending credit. When it makes no business sense or is economically not feasible to retain an asset, businesses default on their loans (called bonds). It is not uncommon for business bonds to trade on the after-market for a small fraction of their face value in realization of the likelihood of these future defaults