What is bank approved short sale?

What is bank approved short sale?

When the house you want to buy has been approved for a short sale, it means that the lender holding the mortgage has agreed to sell it at price that’s less than the outstanding mortgage amount.

How long does it take to close on a short sale after bank approval?

Mortgage lenders prefer to close short sales within 30 days or less after approving buyer offers. In fact, lenders often push for closing short sales within two to three weeks of sale approval.

What happens after a short sale is approved?

If the lender approves the offer, the short sale moves forward. If the lender does not accept the offer, the buyer may counteroffer or end the process.

Why would a bank accept a short sale?

Typically, the bank or lender agrees to a short sale in order to recoup a portion of the mortgage loan owed to them. They were much more prevalent during the Great Recession, when many U.S. homeowners were “underwater” on their home loans; i.e., they owed more on their homes than the homes were worth in value.

Will the bank take less on a short sale?

Understand that with a short sale, if the appraisal comes in lower than the offer price, it’s usually up to the buyer to cover the discrepancy. There’s little room for negotiation with the seller, and it’s unlikely the bank will lower the price at that point.

Does the bank have to approve a short sale?

Banks generally do not approve a short sale until the bank receives an offer from a buyer. Therefore, the usual way a short sale can be approved is for a buyer to submit an offer. The seller delivers the lender’s required documents to the agent. The buyer submits an offer subject to lender approval.

How long does short sale approval take?

A short sale can take up to six months to be approved because many factors can slow the process down. You might be able to reduce the time it takes to be approved by asking your agent for some information before making an offer.

How do you get a short sale approved?

Approved Short Sale

1. The selling agent lists the short sale.
2. The seller delivers the lender’s required documents to the agent.
3. The buyer submits an offer subject to lender approval.
4. The seller signs the buyer’s offer.
5. The listing agent sends the seller’s package and the accepted offer to the short sale bank.

Will a bank approve a short sale?

Which is the possible outcome for a seller whose short sale is approved?

If approved, the property will be designated as a short sale in the sales listing, and offers made on the home will be sent to the lender/seller to accept, counter or reject. A short sale home is usually sold for less than – or “short” of – the remaining amount of the mortgage loan.

Do Banks prefer short sales or foreclosure?

Increasingly, banks are offering struggling homeowners wads of cash to allow their homes to go into a “short sale” and avoid foreclosure.

What is required for short sale approval?

The terms of the new offer must match the offer that was approved and be submitted at the same approved sales price. The approval letter must not be specific to the previous buyer. The buyer must close by the date specified in the short sale approval letter or get an extension approved.

What does a bank approved short sale mean?

Approved Short Sale. Banks generally do not approve a short sale until the bank receives an offer from a buyer. The usual way a short sale can be approved is for a buyer to submit an offer and get that offer approved: Agent lists the short sale. Seller delivers lender’s required documents to the agent.

What is a “approved vs. unapproved” short sale?

1) With an APPROVED SHORT SALE the lender has already agreed to the SALES PRICE. 2) With an UN-APPROVED SHORT SALE the lender is aware of the predicament the seller is in (having to sell in a market where the value of the property is less than what’s owed on the loan). An unapproved short sale means that the lender has theoretically agreed to the idea of entertaining an offer on the property (for less than the amount owed on the mortgage). But the lender’s commitment is rather nebulous.

Can a bank back out of a short sale?

A bank can back out of a short sale if it’s unwilling to continue the process as a result of too many liens. Further, banks often have so many foreclosures and short sales in process, a lender may…

Does bank counter offer on short sale?

When a short sale bank issues a counter offer, it’s not really a counter offer. Except that it is. It’s just not the type of counter offer that most Sacramento real estate agents recognize. Confused? A short sale counter offer arrives in different forms. Sometimes it looks like Buddha, and other times you’d swear it’s sporting a black cloak and wielding a scythe.