Stage 3

Stage 3 - Underwriting & Lender Approval

During the underwriting process , the lender will conduct a third party appraisal. The purpose of the appraisal is to help your lender determine the current "as-is" value of the home. This evaluation can take place in one or more of the following forms:

* Interior appraisal - Conducted by a licensed appraiser where interior access will be required to enter all units of the property. This will include a full report on the home's condition, comparable properties in the area, and the value.

* Exterior appraisal - Conducted by a licensed appraiser. However, he or she will not enter the property. The report will mostly include comparable homes in the area, which will determine the appraiser's opinion of price 

* Interior BPO - The term "BPO" stands for Broker's Price Opinion. Unlike a full appraisal, this is conducted by a licensed real estate agent from the local market. It's usually the less expensive route for the lender to go, as the agent does not produce an extensive report.

* Exterior BPO - This is sometimes referred to as a "desktop appraisal". This form of valuation occurs when the lender uses automatic computerized data to determine their price or when a hired agent does not enter the property. Instead, they determine their opinion of value by simply using comparable properties in the area. The home's interior condition is usually not a factor in these types of reports.

After the lender advises of their value the initial contract of sale will be reviewed. The bank will either counter, decline, or accept the buyer's offer. Typically an acceptable offer is one that is equivalent to the appraised value or a percentage of the appraisal amount. Please note, most lenders will want to see a required NET offer of 85% - 95% of the appraised figure. 

We will implement our negotiation skills to provide the buyer with several attempts to counter the lender's offer. When an agreement on the price is finally met between lender and buyer, the bank will issue an official approval letter. This letter will contain important information about the terms of the short sale such as; closing conditions, expiration date for settlement, closing costs paid by the lender, etc.

The short sale approval will allow the process to move into its final stage. CLOSING!