Can a short sale offer be accepted by a bank?

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Can a short sale offer be accepted by a bank?

Just because a listing is advertised as a short sale doesn’t mean it will be a short sale. It means the listing agent and the seller hope it will sell as a short sale and that the lender will accept the offer. How likely is a bank to approve a short sale?

How does a short sale work in real estate?

Short sales happen when a bank agrees to accept less than the amount of the mortgage the seller owes to the bank. The home could appear to be above water, but if after the fees to sell are deducted, plus the mortgage, the funds are short, then it falls into short sale territory.

Do you have to be in foreclosure to have a short sale?

Contrary to popular belief, sellers don’t need to be in foreclosure or have fallen behind in making mortgage payments for a short sale to occur. 3  A short sale agent who has sold hundreds of short sales can give you a sense of whether your short sale offer will be approved. Other agents might not have that ability.

How to choose the best price for a short sale?

The trick to choosing the offer price of a short sale is to figure out how much the bank will want, based on a BPO agent’s opinion of value. Your offer price needs to be reasonable. The bank may or may not allow a discount for waiting for short sale approval.

Short sales happen when a bank agrees to accept less than the amount of the mortgage the seller owes to the bank. The home could appear to be above water, but if after the fees to sell are deducted, plus the mortgage, the funds are short, then it falls into short sale territory.

Why does a bank not approve a short sale?

If the bank has sold the mortgage to another lender, the bank has no authority to approve a short sale because it has released the asset. Although the seller may continue to receive statements from the bank, the bank might be servicing the loan but not own it.

Contrary to popular belief, sellers don’t need to be in foreclosure or have fallen behind in making mortgage payments for a short sale to occur. 3  A short sale agent who has sold hundreds of short sales can give you a sense of whether your short sale offer will be approved. Other agents might not have that ability.

Can a seller with two mortgages accept a short sale?

In some cases, the seller may have two home loans that need to be paid off. For example, the seller might have a primary mortgage plus a home equity loan. If the seller has taken out two loans, both lenders must agree to accept a short sale. 2 

Why did the bank reject my short sale?

The negotiator could suspect the seller won’t move back, so the negotiator doesn’t have to reject the short sale — the seller will do it by refusing to move. The bank could demand a seller contribution the seller cannot afford to pay. It is not unusual for a bank to ask the seller for additional money, above and beyond the sales price.

When does a bank order an appraisal for a short sale?

Notify Seller. After an appraisal is ordered, the bank will notify the seller that the bank would like to proceed with the short sale. But the bank won’t order an appraisal until the seller has submitted a purchase offer made by the potential buyer and the bank thinks the offer is viable.

Can a bank accept a short sale on a home?

A lender will only accept a short sale if you can show both an inability to repay the loan and that the proceeds from a sale of the home could not fully repay the amount the owed. Once the bank approves a short sale — and you and the bank sign papers to this effect — the home goes on the market.

Why are so many banks rejecting short sale offers?

The list price of a short sale home generally has little bearing on the actual price a bank may accept. The list price may be too high to attract an offer or too low for the bank to accept. Some agents advertise short sales at unbelievable prices, hoping a buyer will be enticed to submit an offer.

Why is the price of a short sale too low?

Short Sale Offer Price is Too Low: Banks will request an appraisal, sometimes several appraisals, and may also order a BPO. When the listing agent submits the short sale offer, the agent should also include a comparative market analysis that justifies the price in the short sale offer.

Can a bank put a lien on a short sale?

While it’s possible — and even common — for banks to short sale homes with liens against the title, these liens often mean a much more lengthy and complicated short sale process. When a bank or other lender and the mortgagee agree to sell a property for less than the amount owed against it, the transaction is referred to as a short sale.

When does a bank allow a short sale?

Short Sale When a homeowner runs into trouble paying his mortgage, the lender may allow the home to be sold in a short sale. In a short sale situation, the bank has agreed to let the home be sold for less than what the current owner owes on the property. The sale will be “short” of the owed amount.

What happens if you dont bid on short sale?

If the auction does go on, it might behoove you to attend if you truly consider this your dream home. But don’t be surprised if the bank opens with your offer price. If someone matches, you can bid upward if the place is really worth it to you. If no one matches it, the bank may then drop the minimum until it gets bids.

Short Sale Offer Price is Too Low: Banks will request an appraisal, sometimes several appraisals, and may also order a BPO. When the listing agent submits the short sale offer, the agent should also include a comparative market analysis that justifies the price in the short sale offer.

How long does it take for a short sale in San Francisco?

Since the lender holding the seller’s mortgage evaluates the offer, it can take weeks before it is accepted, rejected or countered. In San Francisco, the average short sale takes between 60 to 90 days from the date the offer is presented to the lender to the date the sale is approved.

Can a bank accept a short sale offer?

The bank has already done the math if it’s considering a short sale offer. It’s already looked at its pooling and services agreement (PSA) and it’s determined whether it will make more money from foreclosure or from a short sale. The bank already knows the answer to this one.

Where can I find bank owned homes in Florida?

Contact our foreclosure brokers directly. Use the map below to find REO bank owned properties in Florida. Listings are updated on a daily basis so you will always have good options of bank owned homes.

Who is responsible for short sale of home?

In a short sale, the lender accepts less than the amount the borrower owes on the loan. Since a short sale is a method of preventing foreclosure, the homeowner is responsible for finding an agent and placing the home on the market.

When to accept a short sale from a real estate agent?

The bank already knows the answer to this one. That said, a short sale agent can show the bank the direction their local markets are moving. It might make sense to accept an offer this month over next year, for example, if home values are falling. But for the most part, banks aren’t interested in the opinion of a local real estate agent.

Why did I get a counter offer on my short sale?

Here are a few reasons you might have received a counteroffer from your lender: The lender doesn’t want to approve the short sale: Yes, it is possible the lender, for whatever reason, has concluded it would be in the best interest of the bank to foreclose.

What makes a home fall into a short sale?

Short sales happen when a bank agrees to accept less than the amount of the mortgage the seller owes to the bank. The home could appear to be above water, but if after the fees to sell are deducted, plus the mortgage, the funds are short, then it falls into short sale territory. Two loans or one loan may encumber the property.

How does a short sale work in a foreclosure?

A short sale enables homeowners to stay in the home until the sale is completed. A foreclosure forces homeowners to vacate. While a seller typically pays all real estate agent commissions and other closing costs, in a short sale the seller pays nothing; the lender or bank foots the bill. The short sale process

What do you need for a short sale?

To assess whether to approve your short sale, your lender will require you to submit some paperwork, including your offer letter as well as a “hardship letter” explaining why you can no longer make your mortgage payments, along with financial documents such as income statements or medical bills to back that up.

Who are the parties to a short sale?

There are more parties to a short sale —the sale of a home that results in the lender receiving less money than it is owed—than the buyer and the seller. There are also the listing agent and that lender. Do not forget about them.

Do you have to negotiate with seller for short sale?

Instead of negotiating with the seller alone, as is the case with most traditional sales, short sale negotiations must be approved by the lender, too. The addition of another party to appease makes the process a bit more laborious. In order to negotiate a short sale, respective buyers will need to know how to work with both homeowners and lenders.

How is a short sale approved by the lender?

Therefore, the usual way a short sale can be approved is for a buyer to submit an offer. The process will usually play out something like this: The selling agent lists the short sale. The seller delivers the lender’s required documents to the agent. The buyer submits an offer subject to lender approval.

This is how a typical short sale goes: Agent lists the short sale. Seller delivers lender’s required documents to the agent. Buyer submits an offer subject to lender approval. Seller signs the buyer’s offer. Listing agent sends the seller’s package and the accepted offer to the short sale bank.

Can a bank decline a short sale offer?

Many lenders only accept short sale offers that approach the fair market value of the property, so a bank may decline a significantly lower offer, even if the homeowner has already approved the offer.

What should I send the Bank for a short sale?

Send a reasonable and fair close-to-market value offer. Sometimes banks will tell you that they want a higher sales price based on a broker price opinion (BPO).

How to have the best chance of short sale success?

To have the best chance of short sale success, the seller should be in regular contact with their lender (s) and the buyer should present a reasonable offer. Consumer Financial Protection Bureau.

Just because a listing is advertised as a short sale doesn’t mean it will be a short sale. It means the listing agent and the seller hope it will sell as a short sale and that the lender will accept the offer. How likely is a bank to approve a short sale?

Can a short sale be used to avoid foreclosure?

A homeowner can use a short sale to avoid foreclosure and lessen the impact on his credit report. Foreclosure is the legal way a lender enforces a mortgage loan and typically results in the homeowner’s losing the house. A short sale is considered a pre-foreclosure transaction, and the lender must issue approval.

When does a home fall into a short sale?

Short sales happen when a lender agrees to accept a home sales price that is less than the balance of the mortgage. 1  It might look like the sales price is high enough to cover the mortgage, but if it fails to sell for enough to cover the mortgage plus the fees for selling the home, it falls into short sale territory.

How long does it take to get a short sale approved?

Getting a short sale approved can be a long process. They can be completed in as little as a month or could take up to a year to be finalized. Many factors can influence this time table including a lender’s experience dealing with short sales, whether the seller has already been approved for a short sale and the number of lenders involved.

Can a signed contract stop a short sale?

Other times, some banks have a policy where they won’t seriously consider any short sale offer unless the home has first been slated for auction, as peculiar and frustrating as that scenario might seem. A signed contract, by the way, won’t stop a foreclosure auction because the bank’s action supersedes it.

Why does a bank take a short sale offer?

It means the listing agent and seller hope it will sell as a short sale and the bank will take the offer. The list price of a short sale home generally has little bearing on the actual price a bank may accept. The list price may be too high to attract an offer or too low for the bank to accept.

Short sales happen when a lender agrees to accept a home sales price that is less than the balance of the mortgage. 1  It might look like the sales price is high enough to cover the mortgage, but if it fails to sell for enough to cover the mortgage plus the fees for selling the home, it falls into short sale territory.

Can a bank foreclose on a home during a short sale?

Sometimes, banks foreclose during the short sale process simply because they believe the owners are trying to delay eviction. Other times, some banks have a policy where they won’t seriously consider any short sale offer unless the home has first been slated for auction, as peculiar and frustrating as that scenario might seem.

Can a short sale agent help you sell your home?

That said, a short sale agent can show the bank the direction their local markets are moving. It might make sense to accept an offer this month over next year, for example, if home values are falling. But for the most part, banks aren’t interested in the opinion of a local real estate agent.

What happens when you get a short sale approval letter?

If the approval letter is specific to a buyer, then the short sale listing agent may need to request a new short sale approval letter, which could restart the whole process. Banks generally do not approve a short sale until the bank receives an offer from a buyer.

This is how a typical short sale goes: Agent lists the short sale. Seller delivers lender’s required documents to the agent. Buyer submits an offer subject to lender approval. Seller signs the buyer’s offer. Listing agent sends the seller’s package and the accepted offer to the short sale bank.

Who is involved in a short sale negotiation?

Instead of negotiating with the seller alone, as is the case with most traditional sales, short sale negotiations must be approved by the lender, too. The addition of another party to appease makes the process a bit more laborious.

What happens when a short sale is approved by the bank?

The buyer waits anxiously, maybe for months. The agent finally receives the short sale approval letter. If the buyer hasn’t canceled the offer during the wait, the sale is completed. If the seller can show the bank that a short sale is a better option than a foreclosure, then the bank will approve it.

Short sales are a complicated process. The wait for short sale approval can be very long, and sometimes buyers lose patience. Another little quirk about short sales is the fact they are sometimes priced under comparable sales. Some agents list them low purposely to attract multiple offers.

What’s the difference between approved for short sale and third party review required?

What is the difference between a short sale listing that says “approved for short sale” and “third-party review required”? “Approved for short sale” means the bank has already determined that the homeowner qualifies for a short sale and has approved the request to sell the property at a reduced price.

What happens if you have a short sale on a house?

If you see a home languishing on the market month after month as a short sale, it’s usually not the lender holding up the sale. The buyer might have canceled so the entire process started over. Unfortunately, you can’t always avoid problems on a short sale.

Can a seller back out of an accepted offer on a house?

No, the seller can’t back out of escrow based on the results of an appraisal. If the appraisal is higher than the sale price, the seller can’t nix the contract to pursue a better offer — unless they have another valid reason. The seller can’t call off the sale because the appraisal is lower than the purchase price either.

What kind of mortgage does SunTrust Bank offer?

SunTrust offers standard and unconventional mortgages, refinancing and other loans. While its application terms and requirements are unclear, its online application makes it easy to get started if you need a mortgage. Looking to refinance your mortgage? See which lender is best for you! What is SunTrust?

What should I look for in a short sale?

Many banks will discount the price a little from market value, but an offer should be reasonable and close to comparable sales if it’s going to be accepted. You might also ask your agent to check out the short sale listing agent’s track record as well.

Do you have to sign a short sale addendum?

Your agent might send you a document that you know you’ve already signed, but forms such as an arm’s length affidavit, a short sale listing addendum, or a short sale contract addendum are constantly being tweaked and changed by the bank’s lawyers. The version you signed might be outdated by the time you’re close to short sale approval.

What happens when you short sell a stock?

When you short sell a stock, you borrow the shares, sell them on the market, and then collect the proceeds as cash. For example, let’s say you want to short sell one share of ABC Bank because you think the stock value will fall. You borrow one share of ABC bank for $100 and sell it for $100, which is credited to your account.

That said, a short sale agent can show the bank the direction their local markets are moving. It might make sense to accept an offer this month over next year, for example, if home values are falling. But for the most part, banks aren’t interested in the opinion of a local real estate agent.

The trick to choosing the offer price of a short sale is to figure out how much the bank will want, based on a BPO agent’s opinion of value. Your offer price needs to be reasonable. The bank may or may not allow a discount for waiting for short sale approval.

What’s the difference between a Reo and a short sale?

Known as real estate owned, REO properties occur when a home has been foreclosed on and the bank has taken back possession. The difference with a short sale is the homeowner is selling the property, but the lender has final approval on any offers made. In this situation, the bank is the lender, not the seller, and must approve the offer and sale.

Can a bank not want to foreclose on Your House?

The Bank Doesn’t Want to Foreclose on Your Freaking House! As you fight to keep your home after defaulting on your mortgage payments, it can feel like the bank is completely unwilling to work with you, that they actually want to foreclose on you and take your home.

Do you have to bid higher than the list price on a short sale?

Get the listing agent to level with you about the interest in the property. If it has already received a number of offers, your bid may need to be priced much higher than the list price. If the seller has already accepted an offer and sent that offer to the bank, you may be wasting your time trying to buy that home.

Many banks will discount the price a little from market value, but an offer should be reasonable and close to comparable sales if it’s going to be accepted. You might also ask your agent to check out the short sale listing agent’s track record as well.

How long does a bank have to review a short sale request?

Banks must review short sale requests within 30 days and have a maximum of 60 days to make a decision. The goal is to speed up the short sale process and reduce the number of foreclosed homes.

Short sale listings are typically priced under market value to entice potential investor. However, that doesn’t mean the bank will actually accept the lower price. As an investor, it’s important to compare similar properties in the area and get comparable prices.

How much can you offer under list price for short sales?

The short sale bank will hire a Broker Price Opinion agent and pay that agent less than $100 to produce a BPO. Bear in mind, though, neither your offer price nor the BPO agent’s price could have any basis in market value. You cannot hang your hat on the list price of a short sale .

How long does it take for a short sale to be approved?

The waiting game is the number one drawback for real estate investors when making short sale offers. While some may be approved within a couple weeks, the majority of short sale offers take months to be approved or rejected — sometimes longer. The last tip for investors when making short sale offers is to simply wait.

Who is the listing agent for a short sale?

The short sale listing agent represents the seller, not the bank. The short sale listing agent also wants to sell that home quickly. The price the short sale agent deems is market value might be right on the nose or it could be deceivingly low.

Can you rent out a house for a short sale?

Lenders go over your financial documents with a fine-tooth comb before agreeing to a short sale. Income from renting out the property must be declared, putting the lender on notice that your income has increased and you may not be in a position of hardship. This might invalidate your request for short sale approval.

Since the lender holding the seller’s mortgage evaluates the offer, it can take weeks before it is accepted, rejected or countered. In San Francisco, the average short sale takes between 60 to 90 days from the date the offer is presented to the lender to the date the sale is approved.

When is a good time to short sell a property?

If you own other investment properties that are reflected on your tax returns, it might be a good time to consider short selling all of them at one time. Just take that hit now. Don’t spread it out. W2, 1099 or other proof of income.