When a normal real estate contract is written, the buyer requests a close of escrow date, which is typically dependent upon multiple conditions being met. There are a lot of people involved, a lot of documents involved, and contractual time lines to follow. Normally, that time frame is somewhere around 30 to 45 days. In the case of FHA financing, it’s on the longer end. In the case of a cash purchase, it can be as quickly as Title can complete their work, or simply a matter of days.
When a buyer writes an offer on a Short Sale, there is no close of escrow date. Instead, the close of escrow date typically reads, “See Short Sale Addendum.” In the Short Sale Addendum, you’ll see on line 38:
Close of Escrow: Close of Escrow shall occur thirty (30) days or _________ days after delivery of Agreement Notice.
The Agreement Notice is the letter that your lender(s) provide upon reaching an agreement to sell for less than you owe on the property. According to lines 22-23 of the Short Sale Addendum:
Agreement Notice: If Seller and Seller’s creditors enter into a short sale agreement, the Seller shall immediately deliver notice to buyer (“Agreement Notice”).
Once the letter(s) reach the buyer, even though there has been initial contract acceptance by the seller at the start of this process, for the purposes of the contract time lines, we consider this the date of contract acceptance. Technically, we have already had an executed contract during the entire negotiation period, with a Short Sale contingency.
In most of the short sales that I have listed, I make sure the buyer and seller understand that we are going to fast track this to closing within 21 days of the Agreement Letter receipt. I do this on line 38 of the Short Sale Addendum because 9 times out of 10, the agreement letter affords us only 30 days to close, and the last thing we want is to run up against the expiration of this letter, coupled with a potential impending Trustee Sale date. And, since we’ve had so much time for the buyer to sit around and basically do nothing, it’s assumed that the financing documents are already in order. This is why it is critical, buyers, to have all of your documents ready to rock at your lender so when the agreement letter arrives, your lender will be able to push forward.
The Squeakiest wheels are typically caused by buyers’ lenders not having everything they need to proceed. While most transactions outside of the short sale world are relatively smooth, even with all of the turbulence the transaction can experience, COE in a Short Sale is more of a balancing act and must be taken very seriously. Lenders don’t like to bend once they’ve made their decision.
Good article. Wish I would have read this earlier. My daughter is buying a short sale and now her bank (chase) does not have all of the papers needed. Tried to extend it with the sellers bank (bofa) but the rejected it and I guess you can't talk to someone as it is all submitted through the web. Seems like a really stupid system and I don't understand why bofa will not extend it jsut for a couple days. I feel sorry for their client the seller.
Jon Griffith's real estate news and market updates. Information that you can use to get ahead. (480) 463-4062 Is this email not displaying correctly? [1]View it in your browser. (Note: If you believe you received this message in error, or it does not apply to you, please accept my deepest apology for sending it. I've made it very simple to remove your address with a single click and my feelings won't be hurt if you unsubscribe.) Links: 1. http://us1.campaign-archive2.com/?u=c3a02bd33c21a022090a61224&id=041e78964d&e=6e35ca53ab The Bank is Taking My House! Is this a true statement for you? If it is, there's hope for your situation. When you go too long without paying your mortgage, your lender exercises their right to call your loan due and payable in full, and they issue a Notice of Trustee's sale. This notice is public record, and its design is to let you know that in 91 days, your house will be put up for auction, and the result will be a big fat "F" on your record. It's frightening and can be very embarrassing, but you must know that you are not alone, and I can successfully help you remedy the situation through what's know as a Short Sale. If this person is you, I _want_ to help you. Don't be afraid to ask as many questions as you wish. [2]The Most Expensive Homes on the Market Links: 2. http://realscottsdaleliving.us1.list-manage.com/track/click?u=c3a02bd33c21a022090a61224&id=4b129fe5f7&e=6e35ca53ab I love looking at luxury properties, and every once in a while I poke around the MLS looking at dream-homes. Today I looked up homes that exceed a list price of $10 Million and I found 15 beautiful homes, three of which are north-east of the Loop 101 in Scottsdale, and the remainder nestled smack dab in the middle of Paradise Valley. If you're up for a few moments in dreamland, check them out here. Chateau de Vie Homes I recently launched a new website called [3]ChateauDeVieHomes.com to offer real estate and Homeowner's Association information to local Chateau de Vie residents. Links: 3. http://realscottsdaleliving.us1.list-manage.com/track/click?u=c3a02bd33c21a022090a61224&id=196e8d3eed&e=6e35ca53ab [4]Like on Facebook [5]Follow on Twitter [6]Forward to a Friend Links: 4. http://realscottsdaleliving.us1.list-manage1.com/track/click?u=c3a02bd33c21a022090a61224&id=6d343d456b&e=6e35ca53ab 5. http://www.twitter.com/RealScottsdale/ 6. http://us1.forward-to-friend.com/forward?u=c3a02bd33c21a022090a61224&id=041e78964d&e=6e35ca53ab Read More [7]Real Scottsdale Living [8]Chateau De Vie Six Links: 7. http://realscottsdaleliving.us1.list-manage.com/track/click?u=c3a02bd33c21a022090a61224&id=076903e98c&e=6e35ca53ab 8. http://realscottsdaleliving.us1.list-manage2.com/track/click?u=c3a02bd33c21a022090a61224&id=e9ae247946&e=6e35ca53ab Property Search [9]Search Homes Links: 9. http://realscottsdaleliving.us1.list-manage.com/track/click?u=c3a02bd33c21a022090a61224&id=b5876a139a&e=6e35ca53ab Jon Griffith REALTOR® HomeSmart Real Estate T: (480) 463-4062 F: (602) 535-3848 I don't just _list_ short sales. I _close_ them. Ask me how today. Jon's [10]Pick of the Week Links: 10. http://realscottsdaleliving.us1.list-manage.com/track/click?u=c3a02bd33c21a022090a61224&id=54a5f4c5bc&e=6e35ca53ab Historic homes in the Coronado District offer charm that is unparalleled in any other part of the valley for the price. This week's pick is a wonderfully remodeled 3 Bedroom, 2 Bath single family home on 11th Street. [11]follow on Twitter | [12]Like on Facebook | [13]forward to a friend _Copyright © 2011 Jon Griffith, All rights reserved._ You are on this list because a) you asked to be, b) I like you, c) you're not the intended recipient and for that I apologize, d) you've used my services in the past and I appreciate you. Links: 11. http://www.twitter.com/RealScottsdale/ 12. http://realscottsdaleliving.us1.list-manage.com/track/click?u=c3a02bd33c21a022090a61224&id=3a075cf28f&e=6e35ca53ab 13. http://us1.forward-to-friend.com/forward?u=c3a02bd33c21a022090a61224&id=041e78964d&e=6e35ca53ab _Our mailing address is:_ Jon Griffith 10601 N. Hayden Road #I-100 Scottsdale, AZ 85260 Email Marketing Powered by MailChimp http://www.mailchimp.com/monkey-rewards/?aid=c3a02bd33c21a022090a61224&afl=1 [14]unsubscribe from this list | [15]update subscription preferences | [16]view email in browser _IMPORTANT NOTICE: _ Neither Jon Griffith, Real Scottsdale Living, nor HomeSmart are associated with the government or your lender(s). Even if you accept this offer and use my services, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating. Links: 14. http://realscottsdaleliving.us1.list-manage.com/unsubscribe?u=c3a02bd33c21a022090a61224&id=78007828b8&e=6e35ca53ab&c=041e78964d 15. http://realscottsdaleliving.us1.list-manage1.com/profile?u=c3a02bd33c21a022090a61224&id=78007828b8&e=6e35ca53ab 16. http://us1.campaign-archive2.com/?u=c3a02bd33c21a022090a61224&id=041e78964d&e=6e35ca53ab
What's a bit strange is that her lender (Chase) doesn't need anything from the lien holder on the property. The relationship is between the lien holder and the owner, not the new lender. Bank of America uses a system called Equator to facilitate the deadlines and paper trail associated with the short sale. It's actually working better than it used to. Bank of America, provided the offer meets the Broker Price Opinion that had to have been conducted on the property when your daughter submitted the offer, should extend the sale, as it is in their best interest to do so. If they don't, it's probable that the listing agent isn't fighting hard enough to prove the value, or the offer is actually too low for their threshold. The problem is common that their threshold is inaccurate based on bad data. Thanks for the comment, by the way.