Many of our potential buyers are asking this same question before putting an offer on a property. The answer we tell them is: Not Much!
With the lack of properties on the market for certain price ranges, the options of putting offers on “Approved” short-sales certainly represent an option for many buyers. However, after weeks of waiting, the buyers are still looking for an answer from the lien holders (the banks). At this point, this is where the misconception of the “Approved” word comes in.
An “Approved” Short-Sale simply means that the bank, or lien holder, has already processed most of the paperwork required from the homeowner to approve the short-sale. In many cases, the bank has also received the BPO (Broker Priced Opinion) with an estimated value for the subject property.
However, since this is a lengthy process, many times the buyers walk away from the waiting game and decide to pursue other homes. In this case, the listing agent places the property back on the market as an “Approved” Short-Sale. When a new offer is submitted by a new buyer, the lien holder still has to approve the closing and terms of the deal even if the price is exactly the same as the first offer.
Yes, the process might be a little quicker, but it is still a process that in many cases is going to take 30 to 45 days or more.
With an “Unapproved” Short-Sale, the negotiator, hired by the seller, is usually waiting for an offer from a potential buyer on the subject property to submit the “Package” to the bank or lien holder. The package contains the financial information of the current owner of the property.
In most cases, the banks are looking for financial hardship from the current owner and logical proof that selling the home at the current offer price will make more sense than proceeding with the foreclosure process on the current owner. In order to determine if the current price makes sense, the lien holder requests a Broker Price Opinion (BPO) from a local Real Estate Agent, which includes 3 Active properties on the market and 3 closed sales that shows the bank a fair market value for the next 30 days. In addition the homeowner will need to provide the bank (lien holder) with tax returns, pay-stubs, bank statements and other documentation in order to show that the seller is really in financial distress.
After all the information is reviewed, and in many cases through committees, the lien holder comes back with an answer with a price and terms for the subject property.
The short sale process certainly can take a long time, and potential homebuyers must be very patient. If a homebuyer is looking to move into a new property in the next few months, then we do not recommened that our clients pursue putting an offer on a short sale property, as there is no guarantee when the closing will take place.
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If you are interested in buying or selling real estate in Parkland, please give us a call at 954-609-0591 or send a note to the squawk.