Submit A Short Sale Proposal

submit a short sale offerShort sale is the process of selling the mortgage property blow the market price. Until the homeowner is making the mortgage payments, banks are pretty happy and even don’t want to talk about the short sale. But, if someone is unable to make the mortgage payments and wish to proceed a short sale, banks get anxious and want to recover the maximum amount.

When the banks feel that the security for a mortgage is in danger or there are chances that seller may be delinquent and stop making the mortgage payments, then they are much interesting in talking about the short sale to reduce the loss. Sometimes, the fact a home is underwater is enough to induce a bank to consider a strategic short sale. But most of the time the bank wants the seller to have a hardship, in addition to negative equity

Authorization to Talk to Short Sale Bank

Banks are not going to talk anybody for a short sale. There are no chances if some straight away calls the bank and start talking about the short sale. They will simply reject any discussion and the reason behind this rejection is that they need a proper third party authorization signed by the owner. Unluckily, the borrower has no other option except allowing a complete access to the personal information to a stranger that will discuss his loan with a short sale bank.

It does not mean that you are not allowed to send a direct offer to the short sale bank by yourself because you could. The bank is simply unlikely to contact you directly and might route the offer back through the listing agent.

Why the Short Sale Bank don’t talk directly to Buyer’s Agent?

You will have to find the experienced agent who can draw a short sale offer for you. The short sale agents want to be paid for their services. The most common way a buyer’s agent gets paid is by the listing broker. The REALTOR® Code of Ethics states how agents are to interact with each other, and a buyer’s agent cannot go around or obstruct with the business of a short sale listing agent. 

It means that you will have to draw up your own offer or contact a short sale lawyer who can write a short sale offer for you. You don’t need to worry about all the details and simply write a letter to the short sale bank with along with a hardship proof and a preapproval letter indicating the price that you would like to pay.

Finding the Short Sale Bank to Submit Your Offer

It is possible that you may need to do your own property search of the public record all by yourself. It is quite easy to find out that which lender originally made the loan for purchase of home, but many loan are sold again and again. However, nowadays, most of the records are kept in digital formats at the courthouse or Country Recorder’s Office to make it easy for accessing later on.

Why the Seller is Involved in a Short Sale

The main thing is that the seller is the owner of the home and the bank is simply a secured debtor. The bank does not do the short sale; it simply approves the short sale and its payoff. It is the seller that conducts the short sale and therefore it has to find the most potential buyer to close a short sale. Sellers generally have little incentive to try to get the highest price possible. Listing agents are reluctant as well, due to fallout from HVCC, because they know that the price a buyer will pay is not always the price a buyer’s lender will approve. The lower prices are always a problem among buyer’s lender.

When a seller receives a second offer form buyer, the seller knows that submitting that offer to the bank will be starting the process over, and the seller don’t wish to start from the scratch. Therefore, sellers normally request to keep that offer as a backup offer. There may be multiple offers at the same time, but the bank will be proceeding only with the highest one. In case of a short sale banks try their level best to recover the maximum amount so they simply reject the offer with low price.

The banks want to recover the market value from a qualified buyer. If you want to make a direct offer to the short sale bank, then you should offer all cash and more than the listed price. Banks prefer to go with buyers who are willing to pay a huge down payment in the form of cash. Making a strong proposal for buying short sale will increase the chances that bank will consider you offer. It is better to hire the services of a short sale consultant because he will be guiding you throughout the process and will save your form any kind of complication.