You are at the mercy of the Bank Processor and their Supervisor. Today most banks are better at handling Short Sales, but still, you never know. This way people will be less afraid that they will get the run around. These days you will often see a short sale listing say something like “Bank Approved Price” or “Approval at $xxx,xxx by lender”. The bank won’t usually agree to fix anything at this point but you should still be able to back out if you find anything substantially wrong with the home. They should still allow you a fair amount of time, after all parties sign the contract, to inspect the property. If you ever consider buying a Short Sale, never spend any money until both the Homeowner and the Bank have signed the contract. Buyers would be spending money on inspections, appraisals, etc… and the bank would come back and ask them to pay more. A Supervisor, or someone who took over the file, would decide that they felt the price should be higher and just send it back. There were many cases where the banks would raise the price from what the seller was asking even after the offer came in and in some cases even after the processer had given a verbal commitment. Another being that banks were being very unreasonable with their expectations. The long time frame being only one of the potential pitfalls. For their sanity, and to protect their Buyer from the pitfalls of a Short Sale. Many Realtors were refusing to sell Short Sales. It was a very hard time in the Real Estate Market. When the economy first hit the skids it could take 6 to 12 months to finalize a contract with a bank. Then comes the part of the process that can take a while. If the offer is too low, the Seller and their listing agent may be afraid to accept it because it will deter other offers from coming in while the bank is considering the lowball offer. Since the homeowner is not getting any money from the sale, they will usually sign any reasonable offer and the Realtor will send it to the Bank. Then, when an offer comes in, both the homeowner and the Bank must sign it. Sometimes they will get two or three BPO’s. The bank will then send a local Realtor or Appraiser to the home to do a BPO (Broker’s Price Opinion).
In New Jersey, it is generally noted in the “Comments” section of the listing. It is required that the Agent disclose that it is a Short Sale. So if you are looking for a Short Sale, look no further than your local MLS. Plus, it is particularly important to have someone who has done this before on their side when going through something like this.
The Sellers almost always use a Realtor because they are not going to walk away from the home with any money either way so they let a Realtor do all the work. In this case the homeowner puts the home on the market with a Realtor and informs the bank that they are trying to sell the home and will most likely receive offers for less than what they owe. The next option that is more favorable to the homeowner is a Short Sale. Short Sales: (Should be called “Long Sales”) In rare cases it may even reduce the loan amount to keep the homeowner and their family in their home. The HARP or HAMP program will lower their interest rate and/or extend their loan term (spread their payments over a longer period of time). Sometimes homeowners will try to refinance or modify their mortgage through the new HARP or HAMP program. They are all books, but no two are exactly the same. Foreclosures are like books in a library.
Often, the mortgage is higher than the homes current Market Value. The foreclosure process starts when the owner of a home stops paying their mortgage or gets so far behind on their mortgage payments that they can’t catch up. The biggest reason people lose out on the perfect deal or buy a home that looks like a deal but turns out not to be, is they don’t have the knowledge and confidence to act when they need to act, and walk away when they need to walk away. What you learn here will give you the confidence to act fast because if you discover a good deal, you can be sure, there are other people out there, looking at that home too. In order to act fast, and not make a mistake, you need to know the process inside and out.
If you are going to go down the road of getting a “deal” on a home, you need to be able to act confidently and quickly. Here is an article that will give you an overview of all of these, and more.įirst and foremost, knowledge is power. Foreclosure, Short Sale, Bank Owned Home, Corporate Home, Fixer-upper, etc… You don’t care what it’s called, you just want it to be worth more than what you paid, when all is said and done. That’s great! Bottom line…you want to get a good deal on your next home.