Profile picture for emceer

Short Sale Offer Question

I made an offer on an Approved Short sale with the approved price being $155k. I offered $155k + 3% closing. The Banksaid right off the bat they will not cover closing but the official approval comes from the investor(s) and we've been waiting 3 months for approval or a counter. I then asked my Real Estate agent if we get a counter offer back at $155 if we can counter back with $159k and include the closing costs. She said the bank would most likely not want to do that becuase it's extra paperwork for the bank and they would not do it. Does that make sense? I would walk if the bank is not willing to work on either offer.
  • January 21 2012 - Orlando
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Answers (14)

If you do attempt to counter, you may well end up waiting another three months only to find out the investors won't budge.

Personally I would prefer to work with a bank that owns the mortgage rather than a pool of investors.
  • January 21 2012
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Profile picture for Dave Matthews
Short sales are not an easy or quick process.  You would probably have been better off to bid the 159,000 to begin with rather than the percentage. 

If you are getting a really good deal and you don't have anything else to bid on, I would say keep waiting.  If there's something else you're eyeing, you need to weigh whether to wait for this short sale or to move on. 

Short sales generally blow through your "good until" dates so it's fairly easy to walk.

Good luck.
  • January 21 2012
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Short Sales can be a lengthly process and the short sale terms are subject to the investors approval.  If a buyer is submitting an offer that is different from the investors approval,  it usually has to be resubmitted for final approval of the new terms by the buyer.  If you like the home and don't have another option, it doesn't hurt to see what the final approval will be. The great thing is you can walk away if you do not agree.
  • January 21 2012
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Accept the offer and enjoy the house you want.
  • January 21 2012
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Profile picture for emceer

I can walk, but my Escrow is tied up, about $3,000.

My lease is also up in April, but I can go month to month if I need to look again.

I'm not absolutely in love with the house, but do like it. Perhaps becuase we've been let down after losing so many other houses to cash buyers our heart is no longer in it and we can't get excited anymore.

My realtor will not show me anymore houses until we get closer to the 3 month date of Feb 9 for my contract to run out. Honestly other than her having access to lock boxes and calling to follow up she has been of no help. She's always trying to push her "friend's" house on us or a Keller Williams home. We go online, find a home, call her and she shows it to us. Nice girl, very new but she' just trying to get her commssion it seems. So if this does not work out we're finding a new realtor.

Other realtors may be discouraged working with a buyer who is already so far along in the proccess.

If I bid on another home, I could only afford to put down $500 in escrow so it won't be a strong bid.

  • January 21 2012
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Profile picture for Rita Walker
Were you not talking on November 8th, that no one would take your offer?
Was this offer in at that time?
I am curious, are you still using the same agent?
Usually the seller wants 1000.00 presented with offer.
  • January 21 2012
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Profile picture for Cindy Quinton
Maybe she senses your frustration with short sales and is trying to redirect you? (I sense it)

Why should she spend time out showing you additional houses if there is no way you could make an offer because of your pending offer?

I can't imagine a single reason she wouldn't want your deal to go through...she doesn't make a dime, recoup any gas money, have a penny to show for her hours of showing you houses and writing up offers until you are able to close.

One question, am I reading this correctly? You are trying to purchase a home in the range of $155,000 and only have a cash reserve of $3,500? I understand there are ways to do it, but aren't short sales often as is? So all of your offers have had a closing cost concession written in? I'm just a casual observer, just wondering...
  • January 21 2012
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Your offer is contingent on the bank agreeing to the sale.

Since the bank has not yet given their approval, you should be able to request a cancellation of the purchase agreement and get your earnest money refunded.

In the future, have your agent write an addendum that states your earnest money will be paid when (and only when) your receive bank approval. This is how it is currently written in the short sale contracts in Minnesota.
  • January 21 2012
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One strategy may be to submit the $159,000 and 3% closing cost contribution offer now. That way you do not invest more time waiting for the inevitable rejection that you believe is forthcoming and then starting the process over. The investment group may consider this at the same time they are evaluating your current offer and you may save a little time.

My experience is that if you are lucky emough to find an already bank approved short sale that is is best to submit an offer exactly in alignment with the terms of the current approval. Otherwise there is little advantage time wise to a bank approved short sale vs. a typical short sale because the evaluation process begins anew.

Good luck.
  • January 22 2012
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This is one of tne reasons why I recommend to my buyers not to get involved on short sales. There are plenty of good private sales That are just as good deals. Most private sellers in my market are willing to pay closing cost and dont make a big deal of paying for needed repais and do not wait more than a few days to act. If you ca not leave without the house, take the offer, if no go elsewhere.
  • January 22 2012
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I do many short sales. The investors do not like to pay closing costs. Going back and countering is going to slow the process down. It could add another month before approval. The earnest money should only be given once there is a bank approval in place.

  • January 22 2012
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I have done several short sales. The bank has almost always counter offered.  At that point you A) can accept their counter B) walk away or C) counter their counter.  It wont take another 3 months.  Once there is someone with a pulse on the bank's end, it should move right along from there.
  • January 22 2012
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Profile picture for Paul Tsiotis
No, it does not make sense.  Unfortunately, we are at the mercy of the bank and the individual negotiator assigned to the file in most short sales. Once the bank agreed to a price of $155000, that's exactly what they mean.  Your offer should have included a 3% addition to the price if you were asking that for closing help.  When the agent lists the approved price, that is a net price to the bank.  It does not include any closing costs.  That must be compensated for in the offer.  
To change the offer now could probably mean more months of waiting.  Sorry to be the bearer of bad news but that's how it is.  
  • January 23 2012
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Profile picture for Ofe Polack
I would wait for the bank's response, at that point you can make a decision.  Short sales are not for everybody, their are frustrating at best and lengthy.  If you do not get this property maybe you should be looking at properties that are not short sales.
  • January 24 2012
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