Buying a short sale condo. approval letter received but close date is 11 days away!!!!

I waited and waited 4 full months and now the wait is over for my short sale purchase.

I finally got the short sale approval letter from the lender Ingdirect (first mortgage holder)and citibank (2nd mortgage holder).

Now the hurdle is:

1. they gave us a close date of 05/10/2012, 11 days from today!!! my agent is requesting an extension, if not it will be $100 per diem charge per day.[

Whomever handled the short sale request should definitely request and extension; the process took so long and with everyone optimistic this is not uncommon; but try and get an extension until 5/31. The fact that there are two short sales involved make this double the hassle to coordinate

2. the shortsale letter does not have my name on it as a buyer, will that cause a problem?

Most short sale letters used to refer to an associated sales contract but more and more I am seeing generic short sale approvals that contain the bottom line of what the lender requires and any other parameters. As long as the parameters meet your loan approval the loan Underwriter should not have an issue.

3. my pre approval is with Quicken Loans, my agent is asking me if I want a second opinion on my loan as he does loans too (he thinks he will be lower on the gfe), is this normal that a real estate agent represent me and do my loan as well?

If you already have an approval in place, unless there are problematic conditions, that would customarily be the fastest conduit to get you closed; and after waiting four months time is now a major factor at this point. If you were to question and compare fees the time for that really should have been when you first applied for financing. There are a few lenders I know who are very fast but that means 2-3 weeks, not 10 days. (I do not know what Quickens fees are so cannot comment.)

Some of the larger Real Estate companies have ownership inteerst with Mortgage Companies and those Realtor's do get pressured to direct you to obtain financing through their associated company. With those larger companies it is not uncommon and they are required to disclose those business relationships.

4. lastly, seller has a tax delinquent of $xxxx small amount which I am prepared to pay but will it create an issue?

From an Underwriting standpoint the seller is responsible to present clear title. The short sale paperwork should provide some leeway between selling price and net to the sellers lender where the seller can cover their own liabilities. Any monies you pay the seller is really something an Underwriter would want included in the purchase price (as it would be considered a cost to you). You should really consult your attorney on this question.

-Adam

Quote from vinz : 1. they gave us a close date of 05/10/2012, 11 days from today!!! my agent is requesting an extension, if not it will be $100 per diem charge per day.

It's all up to how efficiently the lender operates but you're no more special than 100s other applicants they're working on all at the same time. So if you really want this property, prepare to pay the penalty. Or request an extension like you mentioned. I don't understand why banks can't give you 3 more weeks when you had to wait all this time.

Quote from vinz : 2. the shortsale letter does not have my name on it as a buyer, will that cause a problem?

Why not? Make sure your name is on the binding contract.

Quote from vinz : 3. my pre approval is with Quicken Loans, my agent is asking me if I want a second opinion on my loan as he does loans too (he thinks he will be lower on the gfe), is this normal that a real estate agent represent me and do my loan as well?

It's not usual but it is possible. Make sure he discloses this and more importantly shop around. Don't just take his words for it. Compare the numbers on the GFEs from big banks, credit unions, mortgage brokers, etc.

Quote from vinz : 4. lastly, seller has a tax delinquent of $xxxx small amount which I am prepared to pay but will it create an issue?

This should have been taken care of by the seller, his agent and the banks. I don't know why you would voluntarily pay something that the seller owes.

What area is this condo in? Is this deal that great? Don't get too attached and be ready to walk away. There are literally tons of GREAT deals out there even if you let this one go.

Quote from tiedyed1 : I waited and waited 4 full months and now the wait is over for my short sale purchase. I finally got the short sale approval letter from the lender Ingdirect (first mortgage holder)and citibank (2nd mortgage holder). Now the hurdle is: 1. they gave us a close date of 05/10/2012, 11 days from today!!! my agent is requesting an extension, if not it will be $100 per diem charge per day.[ Whomever handled the short sale request should definitely request and extension; the process took so long and with everyone optimistic this is not uncommon; but try and get an extension until 5/31. The fact that there are two short sales involved make this double the hassle to coordinate 2. the shortsale letter does not have my name on it as a buyer, will that cause a problem? Most short sale letters used to refer to an associated sales contract but more and more I am seeing generic short sale approvals that contain the bottom line of what the lender requires and any other parameters. As long as the parameters meet your loan approval the loan Underwriter should not have an issue. 3. my pre approval is with Quicken Loans, my agent is asking me if I want a second opinion on my loan as he does loans too (he thinks he will be lower on the gfe), is this normal that a real estate agent represent me and do my loan as well? If you already have an approval in place, unless there are problematic conditions, that would customarily be the fastest conduit to get you closed; and after waiting four months time is now a major factor at this point. If you were to question and compare fees the time for that really should have been when you first applied for financing. There are a few lenders I know who are very fast but that means 2-3 weeks, not 10 days. (I do not know what Quickens fees are so cannot comment.) Some of the larger Real Estate companies have ownership inteerst with Mortgage Companies and those Realtor's do get pressured to direct you to obtain financing through their associated company. With those larger companies it is not uncommon and they are required to disclose those business relationships. 4. lastly, seller has a tax delinquent of $xxxx small amount which I am prepared to pay but will it create an issue? From an Underwriting standpoint the seller is responsible to present clear title. The short sale paperwork should provide some leeway between selling price and net to the sellers lender where the seller can cover their own liabilities. Any monies you pay the seller is really something an Underwriter would want included in the purchase price (as it would be considered a cost to you). You should really consult your attorney on this question. -Adam

seller is unable to pay for the tax lien and seller is moving out of the country. I know this because as it turns out seller is a friend of a friend. I went ahead and just factored the tax amount to the purchase price which is still a good deal for me anyways.

Quote from shop77 : It's all up to how efficiently the lender operates but you're no more special than 100s other applicants they're working on all at the same time. So if you really want this property, prepare to pay the penalty. Or request an extension like you mentioned. I don't understand why banks can't give you 3 more weeks when you had to wait all this time. Why not? Make sure your name is on the binding contract. It's not usual but it is possible. Make sure he discloses this and more importantly shop around. Don't just take his words for it. Compare the numbers on the GFEs from big banks, credit unions, mortgage brokers, etc. This should have been taken care of by the seller, his agent and the banks. I don't know why you would voluntarily pay something that the seller owes. What area is this condo in? Is this deal that great? Don't get too attached and be ready to walk away. There are literally tons of GREAT deals out there even if you let this one go.

seller is unable to pay for the tax lien and seller is moving out of the country. I know this because as it turns out seller is a friend of a friend. I went ahead and just factored the tax amount to the purchase price which is still a good deal for me anyways.

my name is on the signed purchase agreement but on the shortsale approval letter, the bank just say "buyer".

for me it is a great deal as this is approved at $175k and the comps go from $160k to $250k. there are only 2 other units for sale nearby that are listed as $190k and $200k shortsale pending.

even with the tax amount, price would be $178k

http://www.consumeraffairs.com/fi...tgage.html

Quote from cavan : http://www.consumeraffairs.com/fi...tgage.html

saw that but almost every lender has some kind of negative feedback as well. what do you do?

There's no way you can close this property in 11 days and the banks know this. Perhaps they are only interested in cash offers.

In case you do get an extension, make sure you hire a reputable real estate attorney in your area to do a thorough title search. The seller couldn't pay the taxes on his property so who knows what other liens might be on the property.

I still don't understand why the seller didn't take care of all the liens and how the banks still agree to short-sale the property knowing this could become an obvious issue.

I strongly recommend that you buy a buyer's title insurance which is not required or automatic but it can/will protect you from most title issues. Also keep in mind some liens would not show up on title searches and will not be covered by the title insurance. That's why I'm telling you if you are not comfortable with anything you see/hear, be ready to walk away.

Check out homepath.com to see if they have any other comps in your area? These foreclosures might be less complicated and problematic than this short-sale one.
Also I have used zillow.com in the past to compare loan options. It's free and easy. Unless you're closing with one of the giant banks, I would not too worried about who closes my loan since most of them will in turn sell to a big bank within a month of closing.

Quote from shop77 : There's no way you can close this property in 11 days and the banks know this. Perhaps they are only interested in cash offers. In case you do get an extension, make sure you hire a reputable real estate attorney in your area to do a thorough title search. The seller couldn't pay the taxes on his property so who knows what other liens might be on the property. I still don't understand why the seller didn't take care of all the liens and how the banks still agree to short-sale the property knowing this could become an obvious issue. I strongly recommend that you buy a buyer's title insurance which is not required or automatic but it can/will protect you from most title issues. Also keep in mind some liens would not show up on title searches and will not be covered by the title insurance. That's why I'm telling you if you are not comfortable with anything you see/hear, be ready to walk away. Check out homepath.com to see if they have any other comps in your area? These foreclosures might be less complicated and problematic than this short-sale one. Also I have used zillow.com in the past to compare loan options. It's free and easy. Unless you're closing with one of the giant banks, I would not too worried about who closes my loan since most of them will in turn sell to a big bank within a month of closing.

Thanks for the advice!

I searched homepath, none for sale in the area I'm buying. title insurance is one of the things required by my lender so I'm covered there.

seller has been paying HOA and other utilities, only tax is due to ensure clear title.

The mortgage holder typically will sabotage the short sale to discourage others from attempting one. I'd be very interested to see if this ever closes. 9 out of 10 short sales do not. Please keep us posted!

Quote from dealgate : The mortgage holder typically will sabotage the short sale to discourage others from attempting one. I'd be very interested to see if this ever closes. 9 out of 10 short sales do not. Please keep us posted!

I have seen other ingdirect shortsale approvals with more than 1 month time before close date. not sure why they are doing this. maybe you are right about them trying to sabotage the deal, which is sad because I like the place and it suits my shelter needs right now. we will see what happens, if situation gets worst, I will have to walk away and just find a regular sale or even reo.

update on my shortsale purchase journey:

my agent wanted to match what Quicken Loans for was giving me which is 3.75% for 15 year fixed 20% down.
I shopped around again using costco finance and got in touch with 3 other lenders and chose RMC vanguard for 3.00% 15 year fixed 20% down.
my mortgage shortsale buying journey continues.

update on this shortsale property, 05/10/12 is the foreclosure sale date and the lender decides to not give us an extension and went ahead to foreclose this property. I am disappointed but frankly, it seems like there will always be deals in real estate no matter what year you are buying

for future reference, any taxes owed by the seller should come out of the banks net. You should not be paying for this. It's common for taxes to be owed, since the seller can't pay the mortgage, they most certainly can't pay the taxes either.

I bet the short time to close was caused by one of the banks dragging their heels. I had an offer on a short sale where the 1st bank approved and gave 30 days to close. The 2nd bank didn't approve until a week before the 1st's approval expired, and then wanted us to close in 3 days!