Typically, when you buy a home, you negotiate the price and terms with the owners.
In a short sale, the bank is taking a loss because the sale price is smaller than the loan. The owner does not have a final say because they do not have the resources to fully satisfy the loan. So, in those cases, the lender, a 3rd party, has to approve the sales price.
So, when they say the sale is subject to 3rd party approval they mean it is subject to bank approval on price.
That is exactly what it means.
April 10th, 2010 at 7:43 am
could be junior lien holder. Could be
property other partner [could be
owned by a joint owner/tenant in common
partner]
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RE broker
April 10th, 2010 at 8:22 am
It means that the seller is not the decider in accepting the offer, they may be signing it, but because they owe more than the offer will payoff, the lender(s) involved need to approve of the sale since they will be paying the commissions and reducing what they will accept to release the liens.
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April 10th, 2010 at 8:35 am
COULD BE A 3RD. PARTY OWNS IT AND THE ONE YOUR BUYING IT FROM COULD JUST BE A SALESMAN.
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April 10th, 2010 at 9:21 am
You negotiate with the seller, but the "third party" is the bank or finance company that financed the original purchase. If they don’t approve the short sale (they are taking a loss) then the deal is off.
It could also be subject to a secondary lien holder, but the above would be the most common.
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April 10th, 2010 at 10:09 am
Typically, when you buy a home, you negotiate the price and terms with the owners.
In a short sale, the bank is taking a loss because the sale price is smaller than the loan. The owner does not have a final say because they do not have the resources to fully satisfy the loan. So, in those cases, the lender, a 3rd party, has to approve the sales price.
So, when they say the sale is subject to 3rd party approval they mean it is subject to bank approval on price.
That is exactly what it means.
References :
real estate broker
April 10th, 2010 at 10:44 am
95 % of the time it will be the bank that is approving a short-sale which will ALWAYS be the primary lien holder and NEVER a junior lien holder.
The reason it’s never the junior lein holder is because in a short-sale, the second mortgage always gets paid or the title cannot transfer.
Third party approval never refers to the bank doing the financing on an original sales contract. Even though they must review the contract, they don’t approve the sales price, only the appraised value (because they loan on the LESSER between the appraised value or the sales price on the home).
Joint tenants/tenants in common are OWNERS and are NOT third parties.
Banks doing original financing DO NOT pay the Realtor fees/commissions…that comes out of the seller’s funds on the HUD at closing and are dispursed by the closing agent.
The other 5% is from an estate manager, trustee, etc, that has to approve the sale.
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