What is "normal" for the waiting period depends on the bank. Some banks get approvals in less than 30 days, while other banks' short sales can sometimes turn around in 24 hours. On the opposite side of the spectrum are other lenders so swamped with short sale submissions, their employees may not respond promptly. The process is generally as follows after submission of the offer and a complete short sale package from the seller:.
Some short sales require additional levels of approval. If a government entity is involved, you should add a couple of weeks to your short sale approval expectations. The process can be slowed if the loan has mortgage insurance that the borrower didn't add. If you're running past days, it's possible that the listing agent or a third-party negotiator is not on the ball and is lax about calling the bank.
Calling the bank often means waiting on hold for anywhere from 10 minutes to an hour or longer—not something anyone would look forward to multiple times. An especially lengthy short sale period can also mean that the bank has internal problems, a staff shortage, or that it's lost the file a few times; this causes the listing agent to resend the package over and over again.
An extended delay can also mean that the appraisal is substantially higher than your offer, and the listing agent is building a case for a new appraiser. If you see a home languishing on the market month after month as a short sale, it's usually not the lender holding up the sale. The buyer might have canceled, which starts the entire process all over.
Unfortunately, you can't always avoid problems on a short sale. One of the hardest things for buyers to understand is that threatening to cancel an offer means absolutely nothing to the bank. It doesn't care about the property's condition, location, repairs you want to make, or an urgent matter. Your best bet—if you truly want the home—is to stick it out and wait. Actively scan device characteristics for identification. Use precise geolocation data. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories.
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While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. However, buyers and sellers can work with an experienced real estate professional to make the short sale process easier overall.
For more information about purchasing or selling a short sale home, contact an experienced real estate professional in your area. Are you worn down from managing tenants or the maintenance of properties? Is cash flow difficult, or does your property have little to no Read More.
Equity is one of those terms that gets thrown around a lot, however, it can be confusing what it means in the world of real estate. We will walk you Home Blog Jeff Cook Offers. Back to Blog Posts Prev Next. The following information can help buyers and sellers prepare for the short sale process. Short Sale Process Timeline: Sellers The timeline for selling a home as a short sale varies by state and depends on the actions of the homeowner, the actions of the bank, the various internal processes within the bank, what the difference is between the mortgage value and the value of the home, and other factors.
Approval Timeline The short sale process involves extensive paperwork sent back and forth between the bank and the homeowner. Collection of Documentation: 1 - 3 Weeks Homeowners must prove they qualify for a short sale.
Property Valuation: 1 - 3 Weeks The lender will request a property valuation, either from a real estate professional or from an appraiser. Negotiations: 1 - 3 Weeks Once the homeowner begins turning in offers to the lender, the lender may take several weeks to respond to the home buyer with a counter offer.
Escrow and Close: Up to 6 Weeks In a standard home sale, the escrow process generally takes about four weeks. Exceptions to the Timeline Some factors can complicate the short sale process, causing it to take longer than it would otherwise. Multiple Lien Holders When the homeowner has multiple mortgages on the home, lien holders must get in line to collect money on the balance owed. Lost Buyer Sometimes, buyers lose patience waiting to hear back from the bank.
Inaccurate BPO or Appraisal If the broker price opinion BPO or appraisal for the property is inaccurate, then the representatives at the bank may develop an unrealistic expectation for how much they can get by selling the home. Short Sale Rejection If the lender rejects an offer from a home buyer, then the buyer must make an additional offer, or the homeowner must wait for a new offer from a new buyer, which can add more time.
Short Sale Process Timeline: Buyers Buyers and sellers are subjected to a similar timeline throughout the short sale process. Approval Timeline The process for buying a short sale follows the steps below. Mortgage Approval: Months Receiving a mortgage approval takes most home buyers a couple of months, starting with a pre-qualification and ending with the closing of escrow and the signing of the mortgage documents.
If you're hoping to avoid foreclosure through a short sale, you'll need your mortgage lender's approval first. Though processes vary for obtaining a mortgage lender's short sale OK, once it's given selling your home is fairly straightforward. Your lender may take several weeks or longer to approve the sale.
Having a well-qualified home buyer is the best way to ensure a speedy closing in a short sale. Mortgage lenders typically consider only the highest and best offers. So a short-sale home buyer needing time to obtain a mortgage or meet other conditions can slow down the closing process. Also, if your short-sale buyer misses the agreed-upon closing date, your mortgage lender may void the sale.
Mortgage lenders prefer to close short sales within 30 days or less after approving buyer offers.
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