Bank Approved Short and FHA loans (loan, approval, financing, property)
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If a property is listed as Bank Approved short sale, does that mean it is definitely approved by the bank or can realtors just word things that way if they want to? Do FHA loans cover short sales? If so, is there generally a lot of trouble getting a bank approved short sale approved via FHA?
The banks could really careless what loan you do as long as your lender can get it done. As for the wording of "bank approved short sale", that just means the seller has gone through some hoops and they qualify for a short sale. It doesn't mean the asking price of the property has been approved or that your offer with be approved. You still have to submit an offer that meets the bottom line number the lender wants to accept.
As FalconheadWest said - it doesnt necessarily mean anything. It could actually mean that the price WAS accepted but a previous buyer fell out of contract for whatever reason. But even in these cases, the bank may or may not be OK even if the same exact offer came in.
Bottom line - if you go with a shortsale, expect AT LEAST one month for approval by the bank and 45 days for the financing to be worked out.
The approving bank may not care that you are using an FHA loan, but the seller might. FHA loans require certain things be in working order. Generally a short sale is sold "as is". The seller probably doesn't have any money to make the repairs (if needed) and the bank may not want them to come out of their bottom line. So it may make a difference if you offer is up against a non-FHA loan offer.
The approving bank may not care that you are using an FHA loan, but the seller might. FHA loans require certain things be in working order. Generally a short sale is sold "as is". The seller probably doesn't have any money to make the repairs (if needed) and the bank may not want them to come out of their bottom line. So it may make a difference if you offer is up against a non-FHA loan offer.
If a listing agent is doing his/her job, he knows what will go FHA and what won't so the advertising in the MLS will/should state such information.
All banks consider short sales. FHA and VA have a preapproval program in place. Conventional loan want you to have an offer first, even though HAFA doesn't say that.
If you are getting FHA financing, and it's an FHA loan you may save some money with your appraisal, by using the one assigned.
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