How are you processing your short sales? When is it under contract?
When you receive an offer and forward to your sellers' banks are you marking these properties under contract in your MLS? As brokers are you processing checks or waiting for bank approval?
When do you consider the home is under contract? Whilst banks are supposed to be speeding the processing of short sales through their systems I am finding that it still takes a long time to get any answers. As such sellers are requesting homes stay active on the market to find alternative buyers if the original buyer looses patience with the process.
How are your MLS's choosing to react to these challenges?
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It is under contract as as soon as you have both signatures accepting the contract . . the seller and the buyer. . .
As far as contingencies. . the contract may have an attachment of a contingency like a Home Inspection. .or a THIRD PARTY APPROVAL. . same thing!
Our MLS has just instituted a new required field that indicates a home sale pending a contingency. The contingency field saves a lot of calling the listing office to determine actual status. It seems to be working well.
The sale has final acceptance when seller and buyer agree and sign the purchase agreement. Depending on the terms, the home will likely remain on the market until the contingency is satisfied, whether bank approval, sale of the buyer's home, or an inspection. Earnest money must be deposited or before the third day after final acceptance unless other arrangements are agreed to in the purchase agreement.
I am with Fernando...once buyer and seller sign off and agree, then it is contingent. Some contingencies are cleared quickly - lender approval is not so fast!
Interesting, our MLS has questions about whether it is a short sale, or needs third party approval. We also use the agent comment area for remarks.
However, many agents/brokers in our area are attatching short sale addendums that say the deal is not going to be processed till bank approval is given, so no checks are deposited and deadlines don't start counting till after the banks written approval.
In AZ, when the seller and buyer sign the contract, we remove it from Active and place it in AWC-1, which is active with a contingency that is usually a short sale contingency.
Do you find when you post them as AWC-1 that showings continue or not? Our problem is that our MLS automatically moves these listings to Pending after so many days. We currently have a listing in which the bank has not given any indication to the attorneys after 4 months whether or not they will even approve the short sale.
Since we're on the same MLS, here's what I do. When it's pending bank approval, I list it as ACT-O (Active with Other Contingency). It's not pending until the bank approves. That way, we can still get back-up offers if the first buyer backs out. This i, of course, with seller approval. I also make the buyer do inspections at offer time, not bank approval time. What happens if the seller comes back with inspection items AFTER the bank has approved a deal? You might be starting all over again . . .
I just keep an eye on my ACT-O's and flip them back after the MLS changes it to PEN automatically. A necessary pain in the butt . . .