A short sale tale

I’d like to share my recent experience with a short sale purchase, which is still ongoing.

My client decided to focus on the Queen Creek area due to the large number of REO’s (bank owned homes) and short sales that fit his budget. We found a short sale that was advertised with an asking price “approved” by the bank, but supposedly had an offer for much less under review. We submitted our own offer above the one under review, but below asking. We did not hear anything for a few days until I rechecked the listing and found the price had been increased substantially above what we thought was approved. The listing agent did not bother to inform us of the status of our offer, which obviously was not going anywhere.

A little background: In general, short sale purchases can drag on for a long time, possibly months. You submit an offer and wait for the bank to review and approve or disapprove. Generally, expect at least 30 days to get an answer. In some situations, the bank may have already reviewed offers which they rejected and determined what they will accept. These are advertised as “approved” prices, and can get faster responses.

After seeing the price increase, I checked and found that the original approved price was only approved by the first lienholder. The second lienholder would not approve unless the price was higher, thus the pricing change in the MLS. We resubmitted an offer at the higher price (still good relative to comps) and now have verbal approval for our purchase. Still waiting for the formal bank acceptance.

Fortunately, my client has a lot of patience, and was willing to wait to get a good deal. We should know soon if this will pay off. But, you never know with short sales….

Stay tuned. I will update as we get more information.