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Nothing ‘Short’ about Short Sales

March 31, 2011

I know they’re called ‘short sales’ because the selling price is short of the amount owed, but there’s nothing else short about buying one of these houses.

I currently have offers in – and accepted – on 2 houses. The first was seller-accepted in mid-February. Technically I’m the back up offer, but due to one of the many gray areas in the short sale process, I was able to raise my offer post-acceptance. So the bank gets a choice, I think, on whom they wish to deal with.

The second offer was seller-accepted on the 15th of March. I’m in first position. This was the sixth offer I’ve put in since trying to purchase a home, so my realtor and I have gotten very efficient at it. We’ve been using an app that allows electronic signatures on all paperwork.

Well, two weeks after the seller’s acceptance, the bank tells us that they don’t accept electronic signatures and want both the buyer and seller to re-sign everything. So there’s 2 weeks wasted.

Next step: BPO. Broker Price Opinion. An independent assessment, basically, of the house’s resale value. Who knows how long this takes? The first house took this step weeks ago, but I haven’t heard anything since.

Truthfully I have no idea what happens next. I think it’s such a gray area that each lender addresses short sales differently. Will my offer(s) be accepted? Declined? Will there be negotiations?

Yesterday’s client told me that they purchased their home via short sale. It took 5 months.

I had some inkling of this going in, so I started looking back in November. Frankly I’d hoped to be further along by this point. The house I’m renting is going on the market within a month; the timing is getting dicey. It would all work out beautifully if the bank would just accept my offer!

There is one thing working in my favor, though it’s no guarantee. The rental is a short sale too.

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