Is an “Approved Short Sale” easier to buy?
Question: Is an “Approved Short Sale” easier to buy? I’m looking at a home in Tampa that says approved short sale – can close fast…is this true?
Answer: Not so much. Short Sales are approved on a case-by-case basis. A lender will approve or decline a short sale based upon a specific contract for a specific buyer. If you see a home marketed as an “Approved Short Sale”, you need to know that this is a Realtor marketing term used to convey the impression that it might not take 3 months for the lender to decide on an offer.
Most Realtors use the “Approved Short Sale” term to signal a home had a previous offer and the lender eventually responded with an acceptance or a counter offer. There is a common belief that the next buyer’s offer may have a quicker decision from the lender. In fact, we have had dozens of cases where the lender starts the process over again (with new requests to the seller for updated account statements, a new BPO, and a new negotiator).
If an agent is marketing a home as an “Approved Short Sale”, they are saying that the seller has had a previous offer and the lender went through the process of:
#1) Evaluating the seller’s hardship
#2) Ordering an appraisal or BPO (broker price opinion)
#3) Assigning a negotiator
#4) Analyzing the facts against the guidelines
#5) Presenting the offer to the “investor” who owns the note
#6) Responding to the offer.
If that buyer does not close on the property, the seller’s agent then knows that the lender has accepted the seller’s hardship; and that (at one time) the lender has agreed to a price. This is comforting, but it is not a guarantee that the process will be any faster, or that they will accept the same price the next time an offer comes along.
When a new offer comes in, especially if more than a week has elapsed, most lenders start the process over again by:
#1) Requesting updated financial info from the seller
#2) Ordering an updated Appraisal or BPO
#3) Assigning a new negotiator
#4) Analyzing the facts against the guidelines
#5) Presenting the new info to investor
#6) Based upon current business conditions / policies, the investor decides to accept or counter.
For help navigating the short sale process, contact Team Bohannon at Coldwell Banker today.
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