Good afternoon, all!

 

I apologize if this is not the proper forum for my questions, as this is all completely new to me.  I am an anxious first time home buyer who just entered into a contract on a home that is a short-sale with BoA, and am really hoping for a smooth process.

 

I will attempt to be as brief as possible.  Here is the scenario....

 

Home was listed 1 week ago as a short-sale.  The seller's lender is BoA, and appears to be the only lender.  The sellers refinanced their home in October 2010, and listed it last week for $6k under what they owe.  Nothing is known as to the reason they are proceeding with a short-sale 5 months after the refinance.

 

I jumped on the property as soon as I was alerted it was on the market (this is the 5th home I have entered a bid on and gotten into contract!).  Made offer same day for $15k under the listing price.  Once offer was made, we were made aware that the sellers have an attorney to mitigate between them and BoA, in which it was disclosed that me, the buyer, would be responsible for 1.5% of the contract price towards attorney fees.  Given this new information, we decreased our offer by the cost of the attorney fees, which is less than $3k.  Contract also states sellers to pay up to 4% of closing costs, an initial escrow deposit of $1k, and 30 days for bank acceptance or I or the sellers can walk away, with the max of 120 days.

 

Given this information, does anyone have a professional opinion on how likely it is BoA will accept, or what I can expect?  I instantly fell in love with this home, and have a 'little' flexibility if they counter (as I have been reading on here that they will).  I read several posts that suggested contacting the listing agent directly for any potential additional information they may have about what the bank will want, which I did...needless to say, she wasn't very receptive and said it was unethical for her to speak with me...I didn't know that and apologized profusely....I also don't want to upset my agent, but I am positive it will.

 

I am already pre-approved with SunTrust, and my loan is currently in underwriting and should be final within the next week or so.  I am approved for a 30-year fixed VA loan and am financing 100%.  In addition, I qualify for disabled veteran benefits.

 

Should I have offered more earnest money, or increased the number of days for bank acceptance, even though I really want this to go as fast as possible?  I just want to be well prepared for whatever may come my way.

 

Thank-you  in advance to any and all responses!

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Comment by Jim Schneider on February 21, 2011 at 3:47pm

David,

as long as you are pre-approved and your offer is close to what the bank assumes fair market value is, that's as good as you can do, but the bank needs to qualify the seller as well. Usually the bank wants to make sure that the seller doesn't make enough to continue paying, or have money they can contribute to lessen the bank's loss, this is called financial hardship. Usually this is something that is outside the seller's control and unexpected, such as a layoff, reduction in pay, divorce, job relocation, or a unexpected increase in expenses like a major medical problem. I would have your agent contact the listing agent and ask for more details of what is going on, because you might be sitting there for no reason if there isn't a hardship.

Comment by Bryant Tutas on February 21, 2011 at 2:17pm

Hi David. It sounds like yo have done everything right. I do think 30 days for acceptance is being very optimistic. 90 days would be more realistic. The larger deposit wouldn't make a difference.

 

Interesting that the sellers just refinanced in October and are now applying for a short sale. Not quite sure how the lender will look at that. That's areal short period of time to default on a loan.

 

If you really want the property then sit tight and let things play out. You should have some sort of action taking place within 45 days or so.

 

Good luck to you. I truly hope you get your property. May the 5th time be a charm!!

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