Central Florida Short Sales

Hi Folks. Here's an email I received yesterday from one our members at www.ShortSaleSuperStars.com. It shows the common misunderstanding that lenders handle short sales like they do REOs (foreclosures).

Hi Broker Bryant,

I read some of your comments on Short Sales Superstar. 
 
I am a potential buyer.  We have bought several properties in the past but are very inexperienced with short sales.  We have been looking for a home for a long time and have not been able to find what we are looking for until now, except that the property is a short sale and an offer has already been submitted to the lender.  So, instead of just walking away, I am hoping to learn a little more about how short sales work in the hope that we may have a chance at purchasing this house if we approach it in the right way.
 
The seller's agent has submitted an offer to the lender but the lender has not accepted it yet (I have a feeling that the seller agent is not very experienced with short sales either and just sent it to a department and has not had much communication with the lender). We are strong buyers with 60% down, a three figure salary, and pre-approved loan, but I don't know if this is even considered in a short sale. We want to make a competing offer and would have done so via the seller's agent, but the seller's agent will not submit our offer to the bank because she already has an offer she submitted and says it may sit at someone's desk for months before she hears back from them.  The lender still has not accepted/approved this offer, but the seller agent will only accept our offer as a backup offer and will not submit it to the lender unless the first offer made is declined. She tells me that you cannot submit two offers to a lender.  Is this so?

Prior to this conversation with the seller's agent it was my understanding that until the offer is accepted by the lender, multiple offers can be made and presented to the lender. I would imagine that lenders actually like and prefer receiving competing offers, is this not so?  If so, I am wondering why this agent will not submit our full price offer to the lender. Is she right to do this? Is there anything we can do about it?

My response:

The agent has more than likely submitted a contract to the lender. NOT an offer. In a short sale the lender is being asked to accept less (short) on the amount owed. They are not deciding on whether or not to accept an offer. The lender is not a party to the contract. That's between the buyer and the seller.

At this time, you can submit an offer to the seller, through their agent, and see if you can negotiate a deal and have your contract accepted as a back up. This way if something should happen to the first deal your contract would move up to the first position and then be submitted to the lender.

Submitting more than one offer or contract to the lender creates confusion. Lenders want ONE fully signed and accepted contract to work with. You have to remember they do not own the property. It's a different situation than a REO (foreclosure). END

So remember, a Short Sale contract is still a contract. We submit contracts to the lenders NOT offers. Got it?

Are you facing foreclosure in Florida?

Hi Folks. Recently I have had two Buyers balk at providing me personal info I need if they want to purchase a Bank of America Short Sale. I really do understand where they coming from but....most of the big lenders including Bank of America and GMAC are now running most of their short sales through http://www.Equator.com.

Supposedly the Equator system will help to shorten the time involved with getting these Short Sales approved. From what I'm hearing Bank of America is giving approvals in 60-90 days as opposed to the 6-9 months they were taking. That's a good thing.

The Equator system is asking for some personal Buyer info. I assume this is to make sure transactions are "arms length". If the Buyers want to purchase a Bank of America Short Sale then we have to enter the data.

The reality is it's less data than what the closing agent will want and far less than they would have to provide if getting financing.  What Equator is requiring is simply:

• Date of birth
  
• The first 5 digits of their social security number.
  
• The Buyer's address.

That's all we need. No big deal. Of course the Buyers always have the option of just not buying a Bank of America Short Sale. I just hate to see them miss out on a good deal over something so minor. What say you?

Here's the screen shot from Equator.

Hi folks. Today I want to put a different spin on Short Sales and third party approval. I've read a lot of posts and comments about the dreaded 3^rd party approval and how frustrating it is for Buyers and Buyer's agents. 

My thought on this is.........it's about time!!! As a listing Broker, my Sellers and I, have spent a lot of time waiting for Buyers to get their mortgage approval. Some took 30 days and some took 90 days. Some didn't close at all.  

When negotiating offers we relied on information provided to us from the Buyer's Lender stating they were "pre-approved" or "pre-qualified" only to find out a month later that it was all a lie. They were just writing deals and hoping to get them through. 

Doesn't this all sound familiar to Short Sales? Of course it does. The Buyer's Lender approving their financing IS 3^rd party approval. That contingency is NO different than having the Seller's Lender remove the 3rd party approval in a Short Sale transaction.

In fact, as a Listing Broker, I much prefer the Short Sale and the Seller's 3^rd party approval. It keeps me in control of the transaction. 

Things have not changed that much. It's just that now the "3^rd party approval" contingency is on the other side of the contract. Deal with it!!

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