Need Some Short Sale Advice
About 6 weeks ago, I found a house (for sale) I wanted to purchase. When my realtor called prior to submitting an offer, we were told the house was being sold as a short sale and had a list price of $153,000. The house is not in foreclosure as the owner is still living there.
My offer was for $147,000. Several weeks passed by, and today, I was told that the bank wants $168,000. Can they do that? Since I don't know the outstanding loan balance, how can I be certain that $168,000 is lower than the loan balance? If it isn't, then it's not a short sale, correct?
What can I do to verify the loan balance? Am I entitled to see the forms submitted by the owner to their mortgage company authorizing the request for short sale? What guidelines would be stated on these forms? I feel helpless and this has been dragging on way longer than I had anticipated.
Thanks
Seems that this is a case of short sale interruptus.
The real estate broker probably assumed that the list price was fair, but has yet to convince the mortgagee that the list price is the as-is, fair market value. The mortgagee must think that $168,000 is the FMV.
There is still some work to be done.
You, as Purchaser, aren't entitled to any confidential information. To get it, you must be in the loop.
Thanks for the reply.
So, how would I obtain a blank copy of whatever "short sale" forms might have been submitted to the seller's mortgage company? What are the names of the forms/documents? I'm trying to see what "legalities" are stated in fine print, if any.
Generically speaking...
If a preforeclosure short sale is approved, the Seller must agree to 1) accept zero proceeds from the sale, 2) sell the home in it's as-is condition, 3) and in some situations agree to address the difference between the amount owed and the amount paid to the mortgagee at the time of sale.
You, Purchaser, have no standing in that agreement (between mortgagor and mortgagee)... you are simply new money at the table.
Thanks.
So, who ensures that the mortgage company legally meets the conditions of the short sale agreement (between the home owner and the mortgage company)? Can they "legally" counter with an amount that is above the outstanding loan balance? In that case, it would not be short sale.
The bank cannot demand more than what is owed but remember that the banks find thousands of dollars worth of fees to ad in when a mortgage is deliquent.
"So, who ensures that the mortgage company legally meets the conditions of the short sale agreement (between the home owner and the mortgage company)?"
The acceptable payoff is stated in their letter of short sale approval. This is the amount that the closing agent has been instructed to collect at closing... subject to all other conditions being met... conditions as indicated on the approved HUD1. If the final HUD1 differs materially from the one that had been approved, the mortgagee may rescind their approval and refuse to release the mortgage.
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