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Made full price offer on approved short sale.

Last week I made a full priced CASH offer on an approved short sale. The listing agent says my offer was the only one currently submitted. She said deal was close to going through with previous buyer before he decided to walk. So most of the paper work has already been done and she says everything should go through quickly.
Now I have two question regarding this.
1) My realtor told me that the price was preapproved by the bank but Fannie Mea was the investor so they will need to give approval on the price on top of the banks approval. Is this two separate approvals? Will it take longer to get investors approval?
2) Offer was submitted 10/30. I have learned that home is scheduled to go to forclosure on 11/22. Listing agent says deal should be done before then and if not bank will extend forclosure date to let escrow close. Is this accurate? And how long will escrow be if my offer is accepted?
 Thankyou for any help.
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November 08 2013 - Vancouver
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Answers (6)

The listing agent does carry the weight of getting the forclosure stalled, although as a short sale agent we are not assigned by the bank-The seller highers us just as any seller would do when listing a property.In most cases getting the forecloser stalled can be successful especially when there is a current offer in process, but in a short sale nothing is "for sure" until you have written approval.

The difference in the $220K that came back on the BPO and the $185K approved price would tell me that the home has been on the market for a while. In the first 30 days of a listing the bank will not accept any less than 88% of the full market value but drops the percentage over time. The approved price is about 84% which is generally the lowest that they will accept.

Fannie Mae, I have been told is currently a bit back logged so it may not go as quickly as the listing agent is hopping. I would push for them to get the foreclosure date stalled now! The closer it gets to that date the more difficult it can become. Now it should be as easy as a request to the negotiator but that depends upon the bank that is servicing the loan also.

Once you get final short sale approval in writting, your escrow should proceed much like a normal transaction would. You said that yours was a cash offer so you should be able to close within 2 weeks if you want.

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November 08 2013
Each department act independently of the other.  Keep on everyone and try to get an acceptance back in writing prior to the sheriffs sale.  
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November 08 2013
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Is there a process to assure that bank will extend forclosure date. It seems it should be the listing agents responsibility as she has been assigned the property by the bank. What should I ask her to do to assure home will not be forclosed during escrow in which case i would lose what ever $ i have put into inspections and contractor estimates etc.
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November 08 2013
Don't assume anything is set in stone until you see it in writing.

Most of what you are saying sounds as though you are on the right path but:
1. Fannie Mae has a say in the price and may not like the current offer. Be cautiously optimistic.
2. You can also be cautiously optimistic about an extension of the foreclosure date but someone has to be onto the lender's negotiator on a regular basis to confirm that the right people know that there is a legitimate offer on the pipeline.

Unlike the US Congress you have to role with any roadblocks and WORK to deal with what comes your way. You are in a very similar environment so don't get bent out of shape if something goes wrong.  It's a waste of energy.
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November 08 2013
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BPO was done prior to last offer. BPO came in around $220k  Yet bank still accepted offer of $185k (which is the approved price that I have offered.) Is it more likely for the investor to not accept my offer than for the bank to not accept it? Thanks so much for ur help.
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November 08 2013
Hi Sean,

The approval process usually is two fold, and the investor on the loan is usually the one that could matter more than just the bank. If the BPO was already done, and you are pretty close to that price, then it should be a quick and done deal. Fannie Mae, given their size, may take a little longer to approve it than a smaller investor.

The bank would usually rather go through the short sale process than foreclosure, so unless problems arise the bank will probably delay the process. All short sale processes are different in length. Once you get approval from the bank and investor, it sometimes could be 7-10 days, or in other cases longer.

Good luck!
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November 08 2013
 
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