How Many Short Sale Offers Go To The Bank?

Short sale agents and yes, even lawyers, sometimes struggle with proper protocol regarding the handling of short sale offers. If you’re new to the short sale arena, you might not even know who is a party to a short sale. You might think the bank is a party to the short sale. I’ve yet to see a spot in the purchase agreement for a short sale bank to sign. Banks are a component as a contingency but the short sale bank is not a party to the short sale.

Even sellers get confused. I’ve had sellers ask over and over if the bank is paying the costs of the sale. It can be argued that the costs of sale are reducing the net proceeds to the bank, and that part is true. But the bank does not own the property. This is the thing people forget. The seller owns the property, and therefore the seller is paying the costs of sale. The bank is interested and approves the costs of sale only because if costs can be reduced, the bank’s check goes up.

The short sale is contingent on bank approval, but the bank does not sign the short sale offer. The bank approves the purchase offer agreed to between the buyer and seller. Unless the Sacramento short sale agent signs an agreement with the bank to get the bank the highest price possible, the parties to satisfy are the seller and the buyer. Of course, a wise short sale agent knows the bank will base, in part, the decision to approve the short sale on the BPO. This means the agent submits an executed purchase contract that will meet market value.

It’s a major mistake to believe that the short sale banks expect to receive every offer submitted to the seller. The bank wants to see the offer that is sufficient to net the bank an acceptable amount. The bank wants to see the offer that the seller and buyer have accepted. The bank wants to see the offer from the buyer who is qualified, committed and dedicated to closing the transaction. If a short sale agent sends a bunch of offers to the bank, it signals the agent is clueless, and the bank will most likely reject all of the offers.