Kablina asked:


My husband and I are planning on putting a bid for a house that is a “short sale” home. I guess it is pre-forclosed…the bank now owns it. Is it true that it can take 1-4 months for a response on whether or not the bank approves the bid? The realtor guy said that they have to answer within a week. We live in Pasco county florida. Thanks

We are lookin to bid 145,000 on a 169,000 listing.

Raul

5 Responses to “Short sale homes.Help me out here?”

1. newmexicorealestateforms on January 26th, 2009 2:33 am

   A short sale is a sale in where the lender is willing to take less than what the original loan and or value of the property was. However the bidding process can raise the value of what the lender is willing to accept. Therefore the lenders like to have the bidding process open as long as possible with the hope that the bidders will phsychologically convince themselves to up their bids in the hope they will be successful in acquiring the property.
   Ask the realtor to tell you when the bidding will be closed and you should hear an answer on your bid within one week from that date.

2. alterfemego on January 29th, 2009 4:01 am

   Yes it can take that long. Another thing, on a short sale there is very little room if any to negotiate. The bank is trying to recoup the mortgage balance plus expenses of selling. So if you think you are going to steal the home, I’d give that idea up right now. If you think the him is in good condition (you had better have an inspection!) then offer full price. It might also help to get you an answer quicker!

3. Landlord on January 29th, 2009 9:38 pm

   It could easily take that long. But he should have also told you to expect either a refusal or a counter offer of 169k.

   Short sales are already below value and the banks in CA are not accepting lower offers. I have made several.

4. glenn on January 31st, 2009 4:09 pm

   If it is a short sale, the bank does not yet actually own it.

   The borrower is about to get foreclosed but still owns it. Every time you ask the least little question the bank requires that the owner and a committee at the bank be involved. So an offer has to be presented to the owner- he probably signs that he will agree to it subject to the bank agreeing to reduce the loan payoff. The bank will look for data that shows them the current value of the home, data that shows them if the seller has assets they can go after to help pay the short fall, and they want to know that no fraud has been involved here (a brother-in-law is not trying to buy the property in the short-sale for instance). So it can take a long time.

   The bank is not under any pressure to answer you quickly, they can always just decide to foreclose instead.

5. JT on February 3rd, 2009 6:53 am

   If the home is a short sale then the bank doesn’t own it yet. If the bank owns it then it has already been foreclosed upon. There is a difference between the two from your perspective.

   With a short sale you’ll submit an offer to the seller who will then submit it to the bank. It can take quite a while for the bank to accept or reject the offer because they need to get quite a bit of documentation such as a statement from the seller showing that the seller has a financial hardship and cannot make payments, a Broker Price Opinion estimating the value of the home, list of repairs needed, etc. This can take some time and once they are submitted to the bank then the bank still has to approve everything.

   If the bank already owns the property then it has already been foreclosed upon and none of the paperwork mentioned above will be required since the bank is the actual seller and not the former homeowner. You would submit your offer directly to the bank, though possibly through an agent representing the bank, and they would make the “accept or reject” decision. With a bank owned property, sometimes called REO or real estate owned, the decision can be made fairly quickly and escrow closed quickly as well. I highly doubt it would take 4 months for a decision. I would guess 30 days or less for a decision and another 30 days for closing if it is accepted.

   If the “realtor guy” is your agent then perhaps he wrote a 7 day period for acceptance into the offer. In other words you submit the offer and the bank has 7 days to respond or the offer is void. That tactic may or may not work. The bank may just take their own sweet time.

   With regard to your offer amount, I think every bank is different and each property decision is handled differently. Florida has been hit harder by the real estate downturn than other areas so I would think that any lender there would want to unload their REO property quickly before the market gets worse. If the property needs repairs or is difficult to mange for the bank then they will most likely not want to hold onto it long either.

   Your offer of $145,000 sounds reasonable. Keep in mind also that if you are not emotionally attached to this particular home the market may continue to deteriorate over the next 6-12 months and values may come down even further. So, waiting may not be such a bad idea either.
   Good Luck!