Making a Short Sale Offering on a home in Southeast Oklahoma.. Read on.. #6
The Phil Leng Team has written a great series on making an offer on a short sale listing. This is the sixth in the series and I appreciate them allowing the post to be reprinted here for my clients.
Help! I’m Making an Offer on a Short Sale Listing!! #6
Help! I’m Making an Offer on a Short Sale Listing!! #6
How can the bank ruin our sale?
If the bank has to forbear any money, then the bank is defacto in charge of the sale.
If your offer on the property is for an amount that does not fully pay off the underlying mortgage or mortgages, then the bank is involved in the sale.
The seller still owns the property, so your offer is to the seller.
However, the seller has no equity. No money in the game. The seller will sign your offer, then it has to be presented to the bank (or banks) to determine if the bank is willing to lose the amount of money required to close.
1. The bank has to determine the price it will accept. It is almost always higher than the asking price.
2. The bank sets the time line. Although there is a new promise of short sales from start to finish in 60 days, the normal time to do a short sale has been 90 days or more.
3. The bank works over the seller to make sure they do not have money to contribute to the sale.
4. The bank can add a deficiency judgement against the seller as a condition of sale.
5. The bank can deny your request for seller paid closing costs to help you with the purchase.
6. Ultimately, the bank can foreclose on the house before the sale is consummated.
So, although your offer on a short sale listing is to the seller, the bank is the ultimate determiner of price, timing and conditions of sale.
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