I want to know if I submit a S/S contract to the bank for approval … get it approved … and then cancel my contract and replace the contract with one of equal or higher value … will the bank honor the new contract? Or are they only approving that single buyer + offer combo. My partner says they wont honor another buyer w/o approval b/c they need to make sure the buyer isnt just pulling a fast one by having a family member sell it back to them at a discounted mortgage.
I was under the impression that theyre approving a VALUE … so any offer meeting that value is acceptable w/o further review…
You’re partner would be pretty close to the truth. In my experience the lenders frown upon changing the buyer because of the reason you mentioned, but also because it is a common ‘red flag’ of fraud in short sales. If the option is change the buyer or loose the deal obviously you will want to change the buyer. If your reason for the buyer change is legit enough in the eyes of the loss mitigation rep then it can be possible.
You will have to provide a new purchase agreement and new closing documents showing no less than the original number that were accepted. If the new buyer means the lenders will net more then they will be more willing to accept the change. Be sure to impress the fact that the new buyer is a complete stranger to the current homeowner to avoid any misconceptions or impressions.