Ask A Buyer of A Shortsale-Did You Lock Your Rate?

Good info Midori!  Thanks for the advice!  How are you my very dear friend?

Great "warning" the qualified buyer of today may fall out of approval in 60-90 days.

However just because the rate is locked the buyer still has to get past under writing

Midori

You are correct your need to lock in the mortgage interest rate for your buyer when your working o a short sale to protect them from upwards rate adjustments.

Good luck and success

Lou Ludwig

This is absolutely "on target" advice.  Even when I warn buyers agents that a short sale may take more than 8-12 weeks to close many still seem to have clients that put a 30 day rate lock on when they submit an offer and then call me upset when they lose it.

Steve,

What do you tell the customer when it is one month short of a year and it's still not closed? Just curious. K

Midori, Some fantastic advice. I had a buyer who waited for an answer for 4 months. they really like the home, but we started looking at other homes. Their offer (the only offer) was rejected. Now my clients want nothing to do with short sales.

Very good points Midori.Time is of the essence.Locking a rate is important for 2 reasons: at least you know where you stand, second you are ready to buy the deal you want. Great Post.

Midori,

This is a great point and one that I would imagine very few people think about when doing a short sale.  Thank you for the information.

Don R.

I just reminded the buyers agent on a short sale listing we have that their pre approval expired they need to update it either way. It probably doesn't make sense to lock in if the short sale takes a minimum of 90 days. I'm not betting that the rates will change much in that time but it's the buyers decision whether or not to lock in...but the point might end up bring moot if the rate expires and the short is still in a holding pattern. We have actually gotten to this new department with more info...it's called triage...kind of like the hospital waiting room. I thought it was funny when they called it that...like a prepping area....what will they think of next?:) I keep thinking the TV show MASH.

Karen... If it's one month short of a year and they are still waiting I would ask them how badly they really want THAT specific house.  11 months is ridiculous by any standard.  Everyone involved in that transaction is going to end up in a rubber room if it doesn't close soon!

Midori- We just had that happen where a buyers agent's buyer on one of our short sale listings did not lock and now her rate went up. The short sale noteholder approved her offer, but because of this she wants to renegotiate with the seller and noteholder. Not going to happen. She and her agent should have thought of that before this, we told them that this will take a while, so be prepared to wait. We are drafting a letter to be sent to all buyers agents and their buyers regarding their role in the short sale process and what to expect. This will help to alleviate some of the problems listing agents face when dealing with buyer agents who know nothing about short sales.