Profile picture for tectonic44

Short sale, long wait. . . A few questions

Months ago, "the" bank approved a short sale on a house. Deal fell throguh because buyer lost his job just before close. On June 10, we submitted a contract on a short sale. We were told through our agent that another contract on the house just came in (may have been a ploy to get us to offer more- successful). We upped our offer to full price (decided we didn't want to loose it), and resubmitted on June 16. We were told at that time by the listing agent that we should have a response within 7-10 biz days since it was a full price offer. Short answer: he lied. Long answer: He keeps telling us to be patient, giving us updates like "Good news: the bank people just asked for some HUD form. Last time we were at this point it was 2 weeks til a signed contract." That was two weeks ago and we now find out the bank has another reason to hold off- asking for an appraisal. More recently we found out that all along we could have had a "signed contract" from the actual seller (pending bank approval) and this would take the property off of active listing. My guess is that the jerk listing agent was waiting to see if he got a higher offer before doing that. So what's the deal? What does a contract signed by the seller mean if we still need to get bank approval? Would a contract signed by only the seller take the property out of active status? Also, we just got notice from the listing agent that the bank wants to do a new appraisal. Any idea how long that might take? Also, the listing agent is now pushing us to set a new close date because the original one has passed. We would LOVE to set a close date. But, without a signed contract, we can't complete and submit our loan app. Plus we don't know when/if the bank will approve this anyway. Should we have our lawyer subit a new date or wait until we have a signed contract?
 
  • July 22 2009 - Aurora
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Answers (7)

Profile picture for wetdawgs
Congratulations tectonic44 on your "four year old new" home!  I'm glad you resolved the situation.

Yeah, I wonder why people don't read the post dates before responding either.   It looks a bit foolish.
  • May 13 2014
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Profile picture for tectonic44
Thanks for your answers. I bought my house over FOUR years ago. You're a little late to the party. Maybe it would be helpful to check the post date before replying. Also, two of you didn't even answer the specific questions I asked, anyhow! Thanks for the empathy, but READ the entire post! Lastly, it's not helpful to answer a question with more questions. Our agent was an idiot, but aside from that, at the time, barely anyone was familiar, let alone accustomed to short sales.
  • May 13 2014
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In your post you stated "our agent", then you start talking about the listing agent.  If you have your own agent, why is he/she not handling these communications?  Why did your agent not know that you need a signed contract with the seller?  Why did your agent not instruct you the process of purchasing a short sale? 

Having a contract with the seller puts you in first position for the purchase so no other offer will jump ahead of you. I am not sure what is customary in IL, but we never set a closing date until we have a short sale agreement letter from the sellers bank.  It is impossible to set a closing date until you know that it will be approved. The seller/sellers agent/attorney (whoever is negotiating the sale)  should be negotiating the sale using your offer, otherwise you are just waiting for a maybe.

Short sales are frustrating, everyone is different, but there is a process to get them done.  YOUR agent should know that process and should be advising you.  The listing agent has been hired by the seller to get them out of debt he does not represent you.
  • May 08 2014
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Most buyers I know that are interested in a short sale end up loosing their patience. Find a good Realtor with experience with short sales it will pay off tremendously. 
  • May 08 2014
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I know it is hard to wait in a short sale but it can take a year or longer to even get a reply. It is a difficult sale for everyone. you just have to have patience and the ability to manage the ups and downs that come with the process. 
  • May 08 2014
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Profile picture for Las Vegas agent
We've had such a mess here with agents that don't know how to complete this type of transactions that the association and the real estate companies have you and them sign all kinds of disclosures.
Some agent were saying that the bank had to sign the offer before they got it off the market and that was how confused inexperienced agents still are.
The way it is supposed to happen, in fact most banks demand it, the offer needs to be accepted, so if the bank is working on it, tha agent probably has a signed offer somewhere.
The hud is part of the initial package submited to the bank along with the signed accepted offer. The seller is the owner, not the bank, so once you have signatures there is an accepted contract and the home should be removed and placed on the mls as subject to short sale approval.
In my experience, if the offer presented before varied by 1 cent, the banks will have to reconsider, heck some banks start all over again. Looks like that is where you're at with the new valuation.

Good Luck

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  • July 22 2009
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When we get an offer on one of our short sale listings, we negotiate it as we would a regular contract and have all parties sign it "subject to bank approval" with a closing date of 30 days after bank approval.  The buyer completes their home inspection and submits earnest money right away.  The home is then listed as contingent pending lender approval, so other buyers may see the home and submit back-up offers, but the first buyer is entitled to the house if the sale is approved.

In our training, we learned that there is no such thing as a "pre-approved short sale" - each buyer/seller scenario is different and the market is constantly changing.  I'm not surprised to hear they asked for a new appraisal - what has the local market done in the time since they had the last one done?  Your attorney should be very familiar with the short sale process (if he's not, find one who is) to make sure your contract is as protected as possible.

Best of luck!

Laurie, The Pych Team @ RE/MAX In The Village, Realtors
  • July 22 2009
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