There are some ads in real estate publications that show approved and unapproved Minnesota short sales. Some buyers are confused as to which of these they should choose.
The approval of Minnesota short sales usually takes such a long time that manybuyers give up. The reason is that lenders do not usually approve a short sale without receiving an offer from buyers. For this reason, some agents reflect a low price in the comparable sales just to attract offers. However, banks usually accept a price higher than what is listed because sellers pick the higher priced offer.
There are several steps taken before the actual approval of a short sale. Here are the steps:
- Minnesota short sale agent lists the sale.
- Agent receives from the seller the documents required by the lender.
- Buyer submits an offer to the lender for approval.
- The listing agent sends the package, including the accepted offer and HUD, of the seller to the bank.
- Buyer waits on approval, which can last for more than a month.
- Once approved, the agent of the seller is informed and will in turn inform the agent of the buyer.
- If the buyer finds another property during the waiting period, the buyer’s agent will inform the listing agent.
- Transaction will then be cancelled by the buyer.
- Listing agent will have no choice but to put the property back to market as an approved short sale.
Typically, this is how a short sale is approved. In most cases, Minnesota short sale properties are offered to the market while they are in the second step as an unapproved short sale. The approved short sales are those that reached the ninth step specified above.
There are buyers that still cancel the approved short sale even when they do not wait. Other reasons for cancellation include:
- Low appraisal, possibly due to HVCC, and bank refuses to approve lower sales price.
- Buyer is not qualified for loan or is not willing to comply with the funding conditions of the lender.
- The property requires several repairs but the bank won’t pay for the cost of repairs.
Typically, the offer from the buyer should match the terms of the approval letter of the short sale. Once it matches, the short sale is considered closed.
