Chance Gates' Blog

So the lender has given permission and accepted that the house is going to be sold for less than the mortgage. The house price has been determined and the house is now on the market.  The homeowner has turned in all of the necessary paperwork, talked to lawyer and accountant to make sure there would be no litigation or tax liabilities. The homeowner also understand selling the house this way is going to damage their credit, however not near as damaging as having the house foreclosed on.

After a few showings hopefully an offer comes, now this is when the experience of the agent really gets tested. The agent needs to run the numbers and make sure asking price will match the lenders bottom line, or the lender will turn the offer down. Once again the net to the lender has to be within a certain percentage of the market value. The lender will hire someone to determine the market value by comparing sales of similar houses in the neighborhood.

The offer is high enough to satisfy the lender.  The homeowner will then sign the offer and accept it. Then the offer and acceptance will be sent to the lender for third party approval, which can take up to 90 days or more. Title can be opened at the point so when third party approval comes, the house can be sold in 30 days or less.