Q: In January, we bid on a short sale that was three lenders deep. Every time we get an update from the banks (via the listing agent) the property is “in review” with the lender.
We knew it was going to be a long process with three lenders, however it seems that it is going nowhere. We’d really like to move forward with this property but are at a loss for what we can do to get to the true status of this sale and help move it along.
Do you have any suggestions? Thank you.
A: There’s nothing you can do other than tell the lenders that they have three, five, seven or 10 business days (you decide the timeline) to decide to take your offer or not. You have to make it clear you are moving on after that period of time.
Then, be prepared to back off and start searching for another property. Short sales are notoriously difficult to get and lenders are taking up to six months (or more) to decide what to do.
When you have three lenders to deal with, it’s just not that easy to get them to step up and make a decision. Perhaps if you back away, the property will fall into foreclosure and you’ll be able to buy it more quickly and cleanly down the road.
For many people trying to buy a short sale home, these buyers find out that the “real” seller is the bank and the bank may have unreasonable expectations about the condition of the property and the price the property should or could receive.
Some lenders may even have unreasonable expectations as to who should pay the closing expenses on the sale even when the custom in the local area dictates that the seller should, or generally does, pay many or all of the closing costs.
Since you may not be dealing with a local lender and can’t communicate in any measurable way with the lender, you are left at the mercy of the employee of each of the banks to make a decision on whether to allow the short sale to move forward or not.
The best advice I can give you is to not fall in love with the property. Keep your options open and if you aren’t getting the responses you need to make the deal happen, cancel the deal and move on.