Short Sale Process: Submitting An Offer To The Seller
Just like a regular real estate transaction, if you want to purchase a home that is being sold as a short sale, your first step is to write an offer and submit it to the seller.
Questions to ask your agent before submitting a short sale offer:
- How experienced is the selling agent with short sales?
Getting a short sale to close takes a lot of time and hard work. Experienced short sale agents know the process, usually have good communication with the asset managers, and can give you an idea on the amount of time it will take to close.
In-experienced short sale agents may be in over their heads and getting the short sale to close becomes more difficult. In this situation, you may want to talk to your agent and to see if they are familiar with the listing agent. If they feel they can get it done, you may want to move forward anyways.
- What liens are there on the property?
If the property has multiple liens against it, getting the short sale approved can be difficult at best. More then likely, a property with multiple liens will take an extended amount of time to get to close, if it even closes at all.
To find a lien on a property, you can check with your local courthouse or ask a title company to do a preliminary title report. Ask your agent to help you with this task or call a title company in your area.
- Are there any other offers?
Ask the agent if there are any other offers you will be competing with. Most agents won’t tell you what the offer amount is, but knowing how many offers are on the property will give you a better understanding of where you need to write yours at.
- Has a price already been approved by the loan servicer?
If you get lucky, the short sale may already have a price the bank has approved. This scenario happens when a buyer has already submitted an offer, has gone through the approval process, but walked away before closing for one reason or another.
If the bank already has an approved price point, it can shorten the process depending on how long ago the price was approved. If it’s been awhile the bank may require you to go through the approval process again.
If all these scenarios check out in your favor, it may be a good idea to submit your offer. First, your offer has to be approved by the seller. If the seller agrees to the terms of your offer, they will then submit it to the bank for approval. Next is the approval process from the bank.
Short Sale Process: Approval Time Frame
Since getting an offer approved for a short sale is a process that requires a third party approval. It’s going to take longer then a normal real estate transaction. Here are some common questions many short sale buyers have:
- How long will the lender take to approve my short sale?
This really depends on a lot of factors. Number one is who is the servicer? For example, Bank of America is one of the worst, and it can take sometimes upto 4 months to get an approval. Wells Fargo on the other hand is a lot more organized and usually can get an approval within 30-45 days after submitting the offer.
The time frame also depends on if the bank has already approved a price. If the bank has already approved a price point, then you know where to write your offer and you can skip the counter offer process. If they haven’t approved a price they will usually order an appraisal or a BPO (broker price opinion) to be done on the property which takes more time.
- What is the average time frame from start to finish buying a short sale?
Average is usually 3-4 months depending on your qualifications as a buyer. If you have cash, once the approval from the bank is completed, you can close in a couple of weeks. If you have to get financing, depending on the type of financing you’re getting, the time frame from bank approval will be an extra 30-60 days. The longest amount of time I have seen it take to get a short sale done was 8 months while the shortest was 35 days on a cash offer.
- Do I still have time for my due-diligence timelines and financing?
Yes. Once you have approval from the bank, they usually give you a certain amount of time to do your due-diligence. You get plenty of time to do your inspections to determine if you still want to buy the home.
If your inspection shows there are problems with the home you might just have to walk away. Most short sales are sold as-is. If the problems are bad enough sometimes you can re-negotiate with the bank. They may reduce the price in order to compensate for repairs.
The bank will give you time to get your financing completed, but if you go over your deadline, you can still ask the bank for an extension. Most the time financing deadlines can be extended if you run into any problems, just talk to the listing agent and ask for an extension.
During the short sale approval process, many buyers get anxious and decide to pull out. Sometimes you just find a better home and decide you want to write an offer on that home. Other times a buyer will have no other reason then cold feet. You can withdraw a short sale offer for a number of reasons:
Short Sale Process: Withdrawing An Offer
You can walk away at anytime up until the bank accepts your offer. Once they accept your offer you can still walk away based on your financing deadline and your due-diligence period.
- How do you withdraw an offer on a short sale?
To withdraw, just contact your agent, and tell them you want to withdraw. It’s that simple. They will notify the selling agent that your offer is no longer on the table and that’s it.
- What are the possible consequences of withdrawing a short sale offer?
Really, the only consequence you will face is lost time. When you submit an offer on a short sale, you can ask your agent to put in the contract you will submit earnest money at the time the bank approves your offer. Once you submit your earnest money, you still have your financing and due-diligence deadlines to withdraw before you lose your earnest money deposit.
Once your due-diligence and financing deadlines are over, that’s when you can lose your earnest money deposit. If you withdraw after those time periods, you automatically forfeit your earnest money. It’s up to you to decide if it’s worth it to lose your earnest money. If you really don’t want to buy the home, losing a $1000 in earnest money might be better then living in a home you hate.
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Lisa I am extremely surprised about the last paragraph of this article. A buyer can just walk away at anytime in a short sale without any risk? Frankly that is absurd. Is this a Utah custom? In Massachusetts and especially on any short sale I was representing the buyer would not be able to just walk away. How does that benefit the seller in any way if a buyer is not locked into a contract? On any short sale I am working with the buyer has to put their money into escrow when the contract is signed. The offer is not submitted to the bank unless there is a signed offer as well. Lastly the buyer has to commit to waiting 90 days for short sale approval. There is a reason why I have never had a short sale not close – they are done properly!! Unsigned contracts, contracts with no buyer risk are really not contracts and usually end up a waste of everyone’s time and effort!
Bill Gassett´s last [type] ..Massachusetts Home Buyer Turn Offs
Hi Bill!
I guess that’s the difference between me usually representing the buyers and you usually representing the sellers.
Most short sale contracts I have wrote have closed, but I always write an addendum to allow the buyers to hold onto the earnest money until there is bank approval. Once the bank approves the offer price we submit the earnest money. Usually because we come in low and are expecting a counter, so the contract won’t be legitimate until we agree on price. If there is already a bank approved price, and we know what we have to offer in order to get the home, then I will have my buyers submit the deposit.
I haven’t had any short sale agents ask that we stay locked in for any amount of time around here. I guess that’s why you have over 20 years of experience! Thanks for your comment!
Wow that is absolutely amazing! I guess there are not too many good agents representing sellers in your area for short sales! If a buyer is not putting down any money why would a seller even bother signing the offer? Why not just continue submitting unsigned offers to the lender which may end up better than yours? Does not seem like the best situation for the seller at all.
Bill Gassett´s last [type] ..Home Improvements With The Worst Return On Investment
Hi Bill!
You’re right about not being a great deal for the seller, but around here we don’t really have a problem with to many short sales. Our market is small and all the agents here know each other well. All the offers I have submitted on short sales have been good offers, and the agents know that if I submit an offer with a buyer, we’re serious. I understand how frustrating it can be for a seller during the short sale process. This may be the reason short sale agents allow me to slide by without the deposit.
I made an offer to buy on short sale at the price the seller agreed to sell. There is no finance contingency. Several months later, the bank approved the sale. During those months condo fees have accumulated. Our agent tells us that the seller no longer wants to sell and would rather have the house go into foreclosure.
Can the seller back out at this point?
Frustrated.
Hi Emil,
The laws depend on your state. Here in UT, if a seller wants to back out of a contract, they have two choices. They can give back the earnest money, pay back any money spent on inspections, and pay for lost time determined by the buyer. Or the buyer can refuse the earnest money and sue the seller for the house. If the buyer decides to sue the seller, they will most likely get the home, and any costs incurred will have to be paid by the seller. It can get ugly. This is a normal transaction.
For a short sale transaction, if the short sale was approved, yet the seller backs out, it might be the same or different. One thing you have to remember, a short sale is a different process. If the seller was required to pay back money, even though the bank approved the short sale, they may not be able to afford it. If that’s the case, they may not be able to short sale, and the bank will seek foreclosure. While you’re left out in the cold. Your best bet would be to talk to an attorney and figure out your options. Also, ask your agent if there is anything you can do.
Best of luck!
Getting a pre-approved is awesome when it happens. Usually the home has been listed before…and if the bank is motivated, the process can be moved super fast.
Susan´s last [type] ..Response cached until Fri 30 @ 0:57 GMT (Refreshes in 23.97 Hours)
After 8 long months, the seller (BoA) and I have come to agreement on an offer for a short sale. Our earnest money will be cashed tomorrow by the title company. We have 60 days to close. We are applying for a 203K rehabilitation loan. If for some reason we do not get this loan, will we get our earnest money returned, as you note, if we pull out before the expected closing date? Thanks.
Hi Jodi,
It depends on the contract you have in your state. Most contracts have a clause stating if you are unable to get your financing approved, you can withdraw from the contract based on a financing contingency. I would talk to your agent, and if you don’t have an agent, I would look over the contract and discuss it with a lawyer.
Hope this helps.
I gave an offer for a short sale listing in Massachussetes. But the seller had already signed another offer the night before, I was a little late. I came to know that my offer was higher than the accepted and signed offer. Is there any possibility of getting the home? Is it possible to submit both offers to the bank?
We made an offer on a short sale through the listing agent. Seller agreed to the price, which was $5000 under the asking price of the home. The bank came back with a counter offer of $10,000 MORE than the asking price and our real estate agent is pushing us to take the offer. He also refuses to counter offer, saying that the house will appraise for much more. We are frustrated that they won’t sell the house for what it was listed for. Seems like bait and switch to me. Is this ethical? Can we get our earnest money back if we don’t accept the offer?
This is a very common situation. If you feel you don’t want to pay that extra amount, than yes you can refuse to accept or counter their offer and walk away. Short sales are many times priced below market value to entice enough buyers to receive an offer. It’s a game that some short sale agents play, and the ethical side is fishy at best. If an agent prices a home below market value, they should sale the home at that price. You can talk to their local Realtor board if you feel the agent never intended to sale the home at the price listed. Good Luck!
Is there a new law set in place whereas the bank has a limited time to either except or deny your offer on a short sale property. We waited 8 months on a short sale property through (BOA) to come back and counter $10,000.00 more than the asking price. Is this legal? so we had to walk away, also the property that we made an offer on was sitting for 2 years you would think they would want to get rid of the property not hold on to it. I think that banks are hoarding houses, for the best possible price. Which is unfair to someone that’s willing to buy it.
Good evening:
I would appreciate if you could please help me with the following question.
I made an offer for a house on short sale. My offer expired before getting any response from the bank. Does this mean when they get to my offer they will throw it away or are they going to contact me? Thank you and best regards.
Claudia
Talk to the listing agent. If you’re still interested in the property your offer should be fine. If all else fails, you can always submit an addendum to push up your dates.
I am in the situation that there was a previous offer that when through the approval process and then the buyers financing fell through. So 3 days after I made the same offer (and a month after the other ended), the bank accepted the offer. That was 35 days ago. In all my paperwork, the target date has been Aug 1st. The seller is moving out by that date, my mortgage is completely approved and ready to go, and obviously I’m anxious to close. Low and behold, can’t seem to get an answer from the selling bank on whether Aug 1st will be the day. My lawyer has contacted the selling agent, my agent has contacted her as well. Is this unusual? Is there anything I can do. I’m at T-9 days. Thanks.
can buyers back out from a short sale after the bank approves the short sale and both buyers and sellers accepted the Settlement STatement from the Bank? The buyers canceled the home inspection and two days after sent an email asking for release of earnest money. Should the seller release the money? what is the purpose of the sales contract if buyers can just walk away anytime they want to without any obligation?
The buyer was within their contingency period, therefore they can still cancel the contract and retain earnest money. As a buyer, you basically have all the cards up until your due diligence period is over. During this period of time, a buyer can get out of a contract very easily. The purpose is to ensure a buyer doesn’t buy a home that has defects or they don’t lose money if they can’t get financing. It’s unfortunate for a seller, and it really is geared towards a buyer’s needs more than a seller. I am sorry to hear about your situation, but unfortunately, you can not keep the earnest money if they are within this period in the contract. I would talk to your agent and see what they recommend.
We put in an offer on a house that is in short sale about a month ago. The bank accepted the offer..its has been a total cluster with the lending company they continually tell us they need one thing, then we get it to them and they come up with something else. In the meantime the Realtor informed us that the same bank that accepted our offer roughly a month ago is wanting to put the house in foreclosure now. Now we are being told that if the loan company doesn’t have our paperwork finished by the 16th the bank is going to put the house into foreclosure and possibly sell it out from under us. Is this legal? The bank accepted our offer just over a month ago, we are pre approved on the loan, but its FHA so we are having to jump through time consuming hoops. Can a bank on such a short time frame turn right around and put a house they accepted your offer on into foreclosure without giving you enough time to finish your loan paperwork? We live in TN is there not a time frame before the bank can do this?
Thank you Lisa. Went over the Short Sale Process of Bank of America and it says that sellers must continue marketing the property and submit to them any offer (even after seller and buyer signed the sales contract already). How does the seller’s agent update the listing in the MLS after a sales contract has already been accepted by seller and offer from buyer is with the Bank awaiting bank approval? I’d like to know because some agents won’t submit any offers anymore once there is a pending sale. Does the buyer’s agent need to update the listing as pending sale or not? If the listing needs to be updated, what information is usually provided? Thank you.
Once there is an accepted offer on a short sale it should be put to “under contract” status. The listing agent usually waits until the bank actually accepts the offer before they put it under contract. Many short sales receive multiple offers, and the listing agent will usually leave the home as active even though they have submitted an offer to the bank. The only time it would be under contract, is if the bank has approved the offer, not if the seller accepts an offer. It’s best to just submit one offer to the bank, and use the other offers as backups. Hope this helps!
Steve, this is absolutely legal. The homeowner is currently delinquent on the mortgage and there is only so much time before a bank will foreclose on the property. The problem here sounds like it’s your loan officer. This is why it’s EXTREMELY important to use a lender your agent has worked with and recommends. Lenders, just like agents, can be deal breakers in a real estate transaction if they can’t meet deadlines specified in the contract.
You have to keep in mind the bank accepted your offer based on certain dates, if those dates aren’t met, then you are in breach of contract which gives the bank the option to cancel at anytime. The time frame was specified in the contract, if the time is up, the bank can do what they want. Now, don’t get me wrong, I think it’s complete BS. You are ready to buy the property and if the bank forecloses, they lose thousands in court & legal fees to do so when they could have had their money from the short sale.
Now, there is a silver lining. If you lose out on your offer, and you really love the home, when the bank forecloses it will come up for sale again. You could buy it as a foreclosure which may save you some more money. As always, talk to your agent and find out what they can do. Also, I don’t recommend this all the time, but maybe you can switch lenders quickly and get your paperwork approved quicker? I know it’s only 8 days, but if your file is already put together, some lenders can get it done if they have in house underwriting. Best of luck!
Hi Liza,
Should the seller’s agent put in MLS a “Contingent NO Kick out” to show that there is an offer on the property? Or should the agent not put anything until the Bank approves the offer? Does the system fins the agent if the listing has not been updated? It seems that when agents see that there is an offer they don’t want to waste their time anymore putting an offer. Is it legal to put a clause in the sales contract that buyer cannot back out unless there is a problem with the house and the seller will not repair and if they back out at that point, the earnest money will be forfeited?
Jun – As a sellers agent, it is their duty to sell the home for the highest and best price with the best terms for their client. Every MLS has different rules and regulations, I would not be able to answer your questions about what status the offer needs to be put under. The only way for you to know this is to talk to your agent about the MLS rules of their association.
Here in our area, we don’t have to put “Under Contract” officcially until the offer is accepted by the bank. We can take as many offers as we want on the property even though the bank is reviewing an offer. This is to protect our sellers as short sales many times fall through with the first buyer. I always say, the first short sale offer is likely not the last one.
Yes, some agents don’t want to waste their time, but you have to remember, it’s their buyers interests they are looking out for. Not all buyers can wait the 30 to 90 days for a bank approval on their short sale offer. They may not have the luxury of waiting out a banks shenanigans to approve their offer.
All contracts real estate agents use are approved by their boards and local attorneys which are in compliance with state law. What is legal in your state is not legal here. However, keep in mind Realtors can not write legal contracts, we can only use our state approved forms with addenda. This is a question for an attorney that I can not answer.
So I supposedly got the “verbal” approval from the seller’s bank on Aug 4th. However, they have still not provided the paperwork my bank needs for the close out amount. Was told I would have last Thursday end of day. Now it’s Tuesday and I’m told it just needs a agent negotiator signature. Does this sound right?
i placed a bid on a home for 13,000; same agent told me she had listed it for 18,000. same agent wrote up the bid, collected a 250.00 money order for title search… she had now told me that the bank denied my bid (end of conversation) i asked for my 250.00 back. am i entitled to my money and shouldn’t she present papers showing the denial from the bank. i just received the “contract” from her today and under closing cost and settlment expenses any money should be responsible at closing; had the bank accepted my bid.
Kathy – Yep, it’s a real pain in the butt dealing with banks in a short sale negotiation. They have their own time-frame and there really isn’t much you can do about other than wait for them to get their act together! It’s quite annoying and I am sorry you have to deal with it.
You paid for a title search before your offer was even accepted? That seems odd to me. I’ve never seen that before. Why did you pay $250 for a title search before your offer was accepted? It depends, you should have gotten either a counter offer or a rejection, but sometimes the seller won’t respond at all and the contract dies. I would contact the agents broker if you think something fishy is going on.
Hi. My husband and I put in a offer on a short sale a little over 2 months ago. Seller bank came back with counter offer about a month ago which we accepted. Since then, we have still not gotten approval. They keep asking us for document after document (like bank records). And today they called our lender and yelled at her because our pre-approval letter did not state that we had the funds to close. Does this sound right? We don’t even know what our closing costs are going to be… We have given an ernest money deposit and I don’t really see why they need to see everything else–they aren’t our lender… Are they even supposed to contact our lender like that? Our lender pre-approved us for the offer, so what’s their problem?
Why haven’t you gotten approval? Is your loan fully approved and ready to go? To me this seems like your lender may not have your file completely finished and ready to close on time, is this correct? I do know that the bank has access to your lenders information, and it’s not uncommon for them to contact your lender about the status of your loan. Usually you have 30 days to get your loan completely finished after your offer is approved by the bank. When is your settlement deadline? A Pre-Approval is basically useless in today’s market place.
The only way you can know 100% sure that you can get approved for a loan is to go through underwriting. A pre-approval just means based on the information you supplied to your lender, he could approve your loan. However, sometimes during the approval process and underwriting, something unforeseen happens that could stall your loan approval or make you ineligible altogether.
One thing is certain. You need to find out when your deadline for loan approval is, and make sure your lender is doing there job to get it approved by that time. This sounds like your lender is behind to me.
We don’t have 3rd party approval yet, so our broker is telling us we can’t do anything yet. It’s been incredibly frustrating because it seems no one we’re dealing with knows what they’re talking about :-/ Currently we do not have a settlement date agreed upon becausr the original settlement date in the contract expired and it was extended to ’30-45 days after 3rd party approval’
Sorry if I may have been unclear in my previous post. Even though we accepted the counter offer, we still have not received 3rd party approval. They seem to want to know that we have all funds for closing (an amount we can’t know yet) before they give us official 3rd party approval. Most frustrating is we think we do have enough funds for closing and so does our lender. Our lender also doesn’t understand why the seller agent needs that information at this point.
Hi Lisa,
I have sorted through the above comments and was unable to find a applicable situation to mine so here goes. After waiting several months on a short sale offer and finally receiving the approval from the 3rd party and the contract was written, the seller’s bank has given the okay to close, and we (the buyer’s) have come to the title company and signed the final documents as well as handed over the check for closing costs, and the seller has signed, the keys are normally issued within 24-48 hours form what I understand (correct me if I am wrong, this is what I was told by my agent).
An entire week has gone by and still no keys. As the buyer in this transaction I am extremely frustrated for several reasons. One: once we signed the documents and paid the closing costs we gave notice to our landlord that we would definitely be out by September 1st, two: we have signed our kids up for the new school they will be attending, therefore we have had to drive them to and from our current home which is not even remotely close to the future neighborhood, and last but not least we are way past any deadlines that were outlined in the contract that, from what I understand, could only be modified if all parties agreed. We are not only past the date of getting our earnest money check but through all this delay the BPO expired 2 days after signing (the day we should have gotten our keys).
My question to you is are there any legal obligations this negotiator has to abide by at all? My agent tells me that because it is a short sell there is no deadlines for the third party, however I feel like a contract is a contract that anyone has to abide by.
I fell like we have no rights at all…
Thank you so much for your help.
If you have a fully executable contract and you have met all the contract terms, you should be able to take possession of the home as long as it has clear title. This is an odd situation and I don’t think I can give proper advice. I would definitely take your agents advice. One thing, has the bank agreed to everything and you already closed on your side? Have your funds been dispersed?
My boyfriend and I put an offer on a Short Sale home about 1 month ago. The sellers came back after just 2 weeks and accepted the offer. We have not hear back from the bank yet, but it has only been 1 month. We were told and quite aware about how long a short sale can take. We are in no hurry anyways. If the sellers signed the contract and accepted our offer, but the bank has not yet, Can anyone else come in an put a bid on the house?
If your offer was submitted to the bank, then no. However, the seller can accept multiple offers and submit multiple offers to the bank. Usually banks only like to deal with one offer, so this is unlikely. If your offer was accepted by the seller, then you should be in first position. A sellers agent should inform you if you are in a backup position or first position, so I would talk to your agent and have them double check that you are in first position.
My Husband and I had put an offer in last week on a home.The home was listed at 299,000. The day before we put the offer on the house, it was dropped to 289,000. We offered the seller 270,000. The seller accepted the offer. Here is my question. The sellers had a previous offer of 285,000. That offer was accepted from the bank, but the buyer walked away because it took the bank to long to come back with an answer. So it was put back on the market. So question # 1 I take it that this is now what they call an approved short sale(meaning the seller submitted all their hardship papers and a bid was accepted). My big question is, once it is an approved short sale, I am told when you make an offer, they do not take as long for the bank to come back, due to previous communications with the bank, with that being said, can you tell me in an approx, how long will it take for them to get back to me and my husband, since it supposidly it does not take as long??? Also if they were going to get 285K, will they accept 270K. I really just want to know how long we have to wait for an answer on an approved sale.
Once the bank approves a sell price, they usually stick close to that price. I don’t know if you will get $270k accepted, but of course it doesn’t hurt to try. Time-frame is usually within a month if it’s already been approved, but I could be wrong. It all depends on the banks current workload. I would expect it to be less than a month to hear something back from the bank, although I would be expecting a counter offer, unless the house’s value has decreased by $15k since the first offer was approved.
it droped from 299K to 289K, if they want 285K why would they drop it to 285? is that a tactic to intice others??
Opps 89K, that is only a 4k difference
How long does the seller have an approved short sales listed before the bank starts to foreclose. I am sorry to ask you all theses questions, but you seem to have answers, that nobody else has. Thank You
About your price dropping comment, yes it’s a well known tactic by listing agents to underprice short sale listings to entice offers quickly. As short sales are a timely process, the best way to get the ball rolling and submit an offer to the bank to get the short sale approved, is to get an offer as quick as possible. The bank will usually counter at a higher price which gives the sellers agent a price to advertise as an approved short sale. It may not be ethical, but it does help the sellers agent’s client get a better chance at getting the short sale approved before a foreclosure.
About the foreclosure, that is completely random. It can take years, or it can take months. It all depends on if the seller is behind on payments and how long they are behind. Some short sales, the sellers aren’t even behind on their payments, they just can’t sell the home unless they go short sale. Usually if the seller is trying for a short sale, the bank won’t foreclose, but if to many offers fall through, the bank could end up foreclosing on the property.
Thank you for your quick response, i know where to come to get some quick answers, I guess I am just anxious as it is just a week yesterday that our offer was submitted to the bank. I think we may start looking at other homes. You have tought me a few things. I know now that even though their first offer fell through at 285K , it is a probability they will not except 270K (our highest offer). I am learning how this short sale market works, and i am begining to think it is not worth the stress. We thought we were a shoe in with the house just sitting there a year now without being sold. Even if the seller is ok with our offer I guess the bank holds all the cards and has all the monety to hold out! Again thank you for your education and taking your time out for some of us clueless individuals.
If it’s only been a week, I would give it more time. What I say on the internet is general, you should really consult with your agent, they know your market way better than me. Give it some time. If you really like the house, you never know what can happen. Let the bank respond to your offer, and if you don’t like it walk away.
Yes I completley understand what you say is general. I will wait a month, i do really love the house, we are just going to look to see if we can find a back up. so after the month is up we can go in on another. Lisa Thank you again, just for simply taking your time out to answer some of the questions that left me confused!!
Hi Lisa, me again.. well its been a week and some things have changed. Again I am seeking your advise.
The bank still has not come back. My agent said something to us in the effect that a BPO was going over to the house. We were told this was an approved short sale, why would a BPO be going to look at the home? is it because they are considering the offer we made at 270? ok that was my first question. Here is the dozy and reason I think this whole deal will fall through, but maybe you can make me understand it.. here goes. This house for over a week now has been in attorney review. I understand the house is now on the very urge to forclose. Contract was standard, in our contract it stated thet the buyers be responsable for CO, we alredy know that that would be up to us, no problem there. we had asked that before inspection gas and electric be turned on, they came back with NO that would be up to us, so we agreed, because they are walking away from this house if we wanted proper inspection then we would have all that turned on. NOW here is what my husband and I do not understand and refuse to do . The sellers attorney is asking we get the home inspected 10 days of attorney review. If we have not received approval from the bank, why would they think we are just going to get an inspection before our bank accepts our offer. Our attorney went back and told them this we would not due. Can you explain to me. Why the Sellers attorney wants us to pay for an inspection when we were not approved yet??
hi Lisa
the seller’s bank came back to me with the counter offer which i did not even try to bargain with. my attorney said it would take 3 to 5 business days for te short sale approval, then she said 3 weeks at the most. it has now been 5 weeks, and still no reply. needless to say i have been waiting for the deal to go through for 9 months since i signed the contract. i have already paid for an inspectina and appriasal. the seller’s bank is wells fargo,
any insight on why it has stalled at the last step? i am not able to get any info
thank you
Hi Iana,
That is pretty wierd as once you get a counter from the bank, it’s usually a quick process. Did you accept their counter offer? If so, you are technically under contract, which means you should be able to move forward? If the bank isn’t responding, I would have your attorney get on the phone everyday until you talk to someone who knows what’s going on. Basically, you need to bug your agent daily to get them to call the lender everyday until something happens. 9 Months is ridiculous!
It’s a way for the sellers agent to protect their client. If they get the inspection done before the bank approves the offer, then they can possibly get a lower price if their are problems with the home. It could also benefit you as you would be able to negotiate your repairs into any counter offer. Since you know what needs to be fixed already, you can just tell the bank the next buyer will need the repairs anyways, and so you have bargaining power. However, if you already agree to a price and then get an inspection, you would not be able to re-negotiate with the bank. In my opinion, an inspection prior to getting your offer accepted is a great way to negotiate a better price and get those repairs paid for.
If the home is sold as is, how is it you negociate the price? We do not intend to accept a counter, we went in out our highest. From our prospectic we feel if the bank does not except our offer and we will not counter, plus we have to pay to turn on utilities to get inspection, we feel we could be throwing away 500 bucks. Besides that, we have also seen another home, a straight sale that would be a cryng shame slipped through our fingers if we lost that waiting on the short sale. SOO confused.
Does it help to know that we were told, that the sellers are on the very verge of a forclosure. They could possibly go into forclosure during this process.
If the sellers attorney comes back and says ok you can do the inspection after 3rd party approval and we accept, can we walk away during the waiting period of 3rd party approval.
Hi Lisa
I accepted a counter offer from the seller’s bank. it has been now 5+ weeks, and no news. my attorney called me yesterday stating the seller had two mortgages,and the banks are not able to agree between the two. my attorney also told me that i had an otion to cancel or wait (no idea how long). in the meantime i hae already paid for an engeneers report, appraisal, and my 60 days interest lock period is winding down. is there anything i can do?
thanks
Lana
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