by Michael Ertem
Many People do not know how short sale process work, even after Real Estate Crisis in 2008. A Lot of agents who represent Buyers are confused; often buyers are looking for direction, and not every short sale listing agent knows how to do a short sale.
Banks will approve short sales for two reasons:
The seller has a hardship, and the mortgage is higher than the home's current market value
What are some hardships that Lenders accept?
Banks are not in the business of giving up mortgage obligations at rock-bottom pricing. The bank will want to receive market value or less depending on the market conditions of that market. Listing Agent may set the price lower than current market value to receive multiple offers which makes the approval process easier or faster.
Seller, or current homeowner still accepts the offer and then Listing agent forwards following documentation to the current lender or Lenders if there are more than one encumbrances on the property
It is important that the short sale package is complete to eliminate any delays. If package is not complete, Lender may not even entertain the request at all until complete package is submitted. Approval process varies lender to Lender. It is very important that the listing agent to regularly communicate with the bank and keep careful notes of the short sale process. It is common that Buyers are usually not patient enough to wait for the approval process if it takes longer than expected and threaten to cancel the contract.
Buyers threats usually do not have any effect for lenders' timing or the way they process. If buyers are not patient, perhaps a short sale may not for them.
Following is a typical short sale process at the bank:
If Buyer cancels during the approval process, it is OK, Once approval is obtained, backup offers can be entertained at the approval level.
I cannot emphasize enough the importance of the complete package for a successful approval process. At Northern Crest Realty, we will make sure with the timelines and completeness of the package as well as determined follow up.