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Would lender in Sh/Sale accept offer equal to ask price or wait for more offers. GMAC in particular

Do lenders in a short sale typically wait for multiple offers before deciding to accept?  How long would the lender wait to make decision?  Any specific knowledge about GMAC in particular?
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January 24 2011 - Gainesville
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Answers (5)

The seller gets to decide how many offers are sent (with the advice of their agent).  If the listing agent is planning to send multiple offers to the seler's bank, they probably don't know what they are doing.  If an agent doesn't know what they are doing, the short-sale is in jeopardy.


In Gainesville, only 298 of the last 656 short sales have been successful. Have you buyer's agent check out the record of the listing agent to see if the listing agent has a high percentage of closed short sales.  

This is an easy MLS search that any agent serving Gainesville should be able to do.

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January 25 2011
Greg Lydell has the correct answer to the first portion of your question.

Assuming your contract is similar to the ones we use in NC... there can only be one ratified contract.  All others must be in backup position.

Some brokers do not quite understand this, and thus, they will forward all offers to the lender.  That is unnecessary.  All offers must be presented to the Seller, but not the lender.

Either way, lenders do not care to be in a position to choose the offer.  They typically only want one... the one you and the Seller agree to submit.  At that point, they will either accept, decline or counter.
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January 24 2011
Hi there,
I've answered your questions in the order you asked them...

Q: "Would lender in Sh/Sale accept offer equal to ask price or wait for more offers."
A: What a lender will accept is not necessarily the list price. They may be willing to accept much lower...or it may be higher. I've seen both scenario's. They will not wait for more offers to start figuring out what price they will accept.

Q: Do lenders in a short sale typically wait for multiple offers before deciding to accept?
A: They'll accept without multiple offers...

Q: How long would the lender wait to make decision?
A: I've seen as short as 12 weeks and as long as 6 months for an initial decision. Any negotiating after that would obviously add more time to reach a mutually agreed upon price.

Q: Any specific knowledge about GMAC in particular?
A: Similar to other lenders...if it's just one lien, it goes quicker. It also depends on the market, the offer, the condition of the house, etc.

Every short sale transaction is different, so expect the unexpected!


Good Luck!
Ryan Halset, Realtor
Seattle, Wa


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January 24 2011
Hi!  There is a simple answer, and a more complex answer to this question.

In a SS situation, you are under a binding contract with the Seller (which is the current owner, since it has not gone to foreclosure).  At this point, other offers cannot be ratified. So, the first answer is no, there will not be multiple offers.

The lender typically takes anywhere from 2-8 months to assign a negotiator, do the paperwork and do one of 3 things... 1. Accept offer  2. Reject Offer 3. Counter-Offer  It is not that they "wait", it is simply a matter of organization and efficiency on the lender's part.


The "list" price has absolutely no effect whatsoever on the lenders approval.  The lender will approve a short sale based on comparable sales in the neighborhood.  For instance, if a listing agent "lists a property for $200,000 and you offer full price, it will be rejected or countered by the lender if the actual value is $250,000 based on comparable sales.

Have your agent do the research to make sure it is priced appropriately.  That is critical for a short sale to actually make it to settlement.  And you should also be prepared for a lengthy wait, however, GMAC is typically one of the quicker ones if there is only a first trust.  If there is a first and a second trust, then another party is involved which complicates and lengthens the process.  Also, if there is mortgage insurance on the property, then that is a 3rd party involved and all have to approve it.

Good Luck and have a great day!
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January 24 2011
Dear Marla,

It depends......   Typically the lien holder(s) will only consider those offers that fall within fair market value for the home.  It is not uncommon to see short sale listings that are well below neighborhood comparables.  The lien holder(s) are NOT required to agree to that price.  It's important to work with a knowledgable realtor that can carefuly review the neighborhood sales activity (taking into consideration the condition of the property, etc.) to help you to determine a fair offer amount.   This will provide you with a far better chance of having your offer accepted.

Other things that the line holder(s) consider is how you will be purchasing the home.  (I.e. cash, loan type, etc.)   

I wish you the best!  
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January 24 2011
 
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