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Short Sale

A few weeks ago we put an offer in on a short sale, it has been on the maket for over 90 days with no other offers. The asking price is 199,000. we offered 165,000. At first we got response that the owner said yes, then a couple days later we were told the bank said they wanted 171,000 so the owners did a counter offer for that amount which we agreed to.  The bank then asked for us to provide proof that we had both the financing and the down payment, which we did.  So now we sit that all the paper work has been done and everything is turned in. Any idea on what comes next? or time line?
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September 01 2010 - Omaha
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Sounds like you're moving along pretty well. getting a response and counter offer in a few weeks is quick. Some lenders don't respond for over a month. Others will ask for an unreasonable price on the counter offer. If your counter and financing is approved then the selling agent should have opened escrow. You should be moving on with your inspections and evaluations and also with finalizing your financing. Always keep in contact with your agent and mortgage person to see where you are in the process.
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September 01 2010
Did the bank order/receive a BPO (broker price opinion)?  If not, that would be the next step.
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September 01 2010
Though short sales work basically the same, each lender handles them in their own manner. It sounds like the lender is responding quickly on your offer which is to your advantage. Now the waiting game begins.

Much depends how much legwork has been done by the listing agent to get the seller's paperwork submitted to the lender and there is a lot including hardship letters, financial profiles etc. The lender does not have the final say. The lender now needs to go to the investor(s) or pool of investors for approval of the short sale. If there are second mortgages or HELOCS involved that is additional negotiation and approvals. Patience is key here. Once your offer has been accepted, and this will take the longest period of time, be prepared to move quickly. You will receive an instruction letter from the short sale lender giving you the opportunity to do your inspections and most importantly your appraisal. They generally don't give you much time and you will have to abide by their rules. I've had short sales where the lender's instruction letter gave us 2 weeks to get our inspection and appraisal done and close. If your appraisal comes in lower than your offer, you can re-negotiate. This happens frequently since there is often a long period of time between the accepted price and the time of appraisal and with prices still dropping it's very likely your appraisal could come in lower.

I generally tell my clients to expect at least 90 days for closing. As much as you want it done quickly, try to relax and let the process work through. It may well be worth it in the long run. You absolutely can't rush the process. The banks are getting better but they are still bogged down with no signs of relief. Good luck and hang in there.
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September 02 2010
This is where you hope the listing agent knows what they are doing. That the seller's have provided all of the necessary information to the bank. Some banks are fast, some are slow. But overall the timeframe has been cut down to about 30-45 days. Major banks have started using the Equator system, and this has sped up the paperwork and accountability of the banks. Local banks are much easier/faster to get final documentation and signatures. Make sure you have locked your rate with your banker so you're not stuck buying a house at a higher interest rate when the seller's bank finally approves the sale.
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September 02 2010
 
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