My girlfriend and I put in our first offer ever on a short-sale about a month ago, and it was accepted by the couple in just a couple of days. When it went back to the bank though, apparently there was not enough time to close(?) and it’s now officially going through foreclosure where it’s going to come back on the market at some point as a HUD home.
Does anyone know anything about this process, or in general how long it takes after a short sale forecloses on an FHA loan before it becomes a HUD listing? Also, I set the date to close as December 5th in the purchase offer (since we originally made the offer in mid-October). Does anyone know if that had any effect? If I had set a later date, would that have allowed the bank more time to deal with us?
It sounds like the bank is behaving as if you had not made an offer. Do you know for sure that your short sale offer was presented to the lender for consideration?
Has the homeowner talked to the defaulted mortgage group and told them that there is a short sale offer? If so, and if the offer will net more than the lender might expect from foreclosure, the bank has some incentive to approve your offer.
Did you give the bank proof of funds to close and a lender’s pre-approval letter along with your purchase offer? Did the seller ask the lender for a short sale package and provide all the documentation required by the lender for a short sale?
If you and the seller did all the right things, suggest you get with the homeowner to determine the true status of your offer. If the lender rejected the offer, would you be willing to improve it? Perhaps raising your offer a couple $K will lead to a different outcome.
If you and/or the seller dropped the ball, maybe the bank will postpone the foreclosure until you can get a fully documented short sale package into the lender’s hands.
We only assume that the correct paperwork was given to the actual lender. We made the offer pretty much strictly through our buying agent. We submitted our pre-approval letter, submitted the offer, and put down an earnest money deposit.
The next day the seller counter-offered, agreed to pay 6% closing costs, and we accepted. After that, everything (as far as we know) went off to the sellers lender for a final approval. We waited a month and a half to hear further, and were told that it was too late, and the foreclosure process was going to go through. So…I’m not sure what exactly happened.
Is there a way to find out if our offer was rejected, or what really went on? And in knowing this additional info, would you still suggest contacting the seller directly?
It sounds as if your buyers agent may have gotten a little ahead of himself in saying they accepted your offer. If they did accept it you would have a deal.
Try contacting the HUD agent for you area and asking them how long it typically takes to go from a to z.
I would suggest having your Buyer’s agent find out from the Seller’s agent what exactly happened. The Seller’s agent should have all the answers to the questions Dave presented, which would all weigh in on whether the bank would accept the offer. If the Sellers didn’t complete the shortsale package from the bank then the bank will not approve a shortsale. They need all of their documents and they basically want everything together not pieces here and there.
It probably is too late at this point, but still see what additional info. the agents can find out. Maybe the Seller could even get a lawyer involved to get the sale postponed if need be. That has been done here in PA before. I just don’t know if the Seller has the cash for that, nor do I know when the sheriff sale is. I hope you can still get the house!
I am not an specialist in short sales but the fact that the seller is agreeing to pay any of the closing costs seem like a red flag. The basic principle behind a short sale is the fact that the homeowner does not have money to make more payments. This is the theme he presents to the lender in the short sale package. So the lender may have felt that there was an inconsistency between the short sale package and the seller agreeing to pay some of the closing costs.
The next day the seller counter-offered, agreed to pay 6% closing costs, and we accepted.
Just something to think about. Have a great Sunday!
I was wondering why the Seller bothered with a counteroffer since they are not allowed to receive funds on a shortsale- unless they just counteroffered the terms of the contract. Any way, the bank would have to agree to cover the Seller’s assist which they may as long as their net amount is acceptable.
Sounds like the seller accepted your offer…but the bank didn’t. I’ve had it happen several times. Spent five months on one deal before the bank actually rejected the offer.