Weddingbee boards

If it's a short sale, it matters a LOT whether the asking price is a number that has already been approved by the bank (which is sometimes true if another buyer already went through a lot of negotiation and then pulled out, or just if the seller is organized) or if it's just a number that the current owner has picked.  In the Bay Area, you often see houses advertised with a price that the owner has chosen just to get a lot of people to look at it, but which is very unlikely to actually be accepted by the bank.  If the bank has approved the price, though, the process will go quicker (although I would imagine it will still be more complicated than a normal sale).

This may be obvious, but a short sale is not the same as a foreclosure, where the bank itself already owns the property and has agreed on the asking price (although foreclosures present difficulties of their own if you want to negotiate the price at all).

I bought a short sale - we put in the offer late December 2008 and purchased mid march 2009 - so that was about 3 months. If the docs were in to the bank before we had made an offer the process would have only been one month - that was when they finally stopped allowing offers to be made. Yes, it can be a long process - but well worth it in my opinion. Make sure your realtor puts an "any reason" clause so you can back out at any moment. Our theory was, put an offer on the short sale and we still looked around while waiting.

From what I understand the realtor can put whatever stinkin price they want on MLS - that 10k reduction was in hopes of starting a bidding war and to prove interest in the house to the bank rep so they don't send it into foreclosure while it's on the market and the owner isn't making payments.

@cait - small world - the same thing happened to us, one pipe leaked and we ended up settling the situation between the two of us instead of involving the bank. We were already going to KILLZ the floors and install new carpet and they paid for the ceiling and pipe repair.

@His - The bank reps have to estimate if the neighborhood is going to recover and the home price would go up making the bank more money VS what tax deductions they make selling it at a loss (capital gains loss) VS cost of maintaining the home (paying realtor/HOA/taxes/etc). In my opinion, it takes so long because banks have the capital to sit on homes in good neighborhoods that they know will quickly bounce back in value, and the short sales that people want are typically in good neighborhoods, hence why you hear people complain about waiting a long time. A good example of this was a house we put an offer on, for 5k less than asking. It sat on the market for 7 months with no offers (this was while the stock market was still crashing so we were like the only people out there) but was gorgeous and needed little work. The bank was actually Fannie Mae. The FM rep wouldn't budge that 5k and the comparable homes in the hood lead us to believe it wasn't worth it. They accepted an offer for 2k less than we offered 2 months later - with no offers in between ours and the people who bought it. I know this because the week before we closed on our house our realtor called telling us the Fannie Mae rep would consider our offer again if we wanted to resubmit. My point is - Fannie Mae gambled that by their estimation they could make more money on the home by waiting. They lost.