Pending Bank Approval
So you want to know what pending bank approval means? When we’re talking about short sales, you may come across the term “pending bank approval” and then you’ll scratch your head and say, ‘what the heck is a short sale?’
Have no fear because this short article is going to give you a link to let you know what a short sale is and what pending bank approval means.
Remembering that a short sale involves the seller having to negotiate with their bank to allow the sale of the home for less than what is owed on the mortgage, the term pending bank approval simply means that an offer has been made and the owner (and everyone else associated with the sale) is waiting for their bank to approve the sales price.
On our local MLS of Long Island, homes that are “pending bank approval” or PBA show on MLSLI as available which does confuse matters a bit with prospective buyers. Conversely, when a “regular” sale (a non-short sale) is put in contract, it is removed from the MLS and does not show as available (or on the market).
Now what goes in to helping a bank (of a seller) approve a short sale includes a fair market analysis of the home values in the immediate area. The bank itself will do what’s called a “Cost Carry Analysis” or CCA. The CCA is simply a mathematical form which forecasts holding costs and other factors such as how much it will cost to foreclose as opposed to allowing the homeowner to sell the home for less than what is owed.
Of course there is so much more that is involved in a short sale, but this should give you some outline as to some of the basics. As always, if you have any questions, please do not hesitate to call me.
IF YOU ARE READING THIS IN ANOTHER STATE (NOT NEW YORK) – PLEASE NOTE THAT STATES HAVE DIFFERENT LAWS REGULATING HOMEOWNERSHIP. PLEASE CONSULT AN ATTORNEY IN YOUR STATE. IF YOU HAVE ANY QUESTIONS OR WOULD LIKE ME TO REFER YOU TO SOMEONE IN YOUR STATE, PLEASE FEEL FREE TO CONTACT ME.