Financing in Racine County>Question Details

Ron & Diana…, Real Estate Pro in 53158

Why Does a Short Sale take So Long?

Asked by Ron & Diana Dahlberg, 53158 Sun Apr 29, 2012

The word, Short Sale, implies that a sale will take a short time ... at least that's what alot of buyers believe when starting to look for a home. If the Banks want to move out their inventory, why do they take so long to make a decision so the buyer can know if they will be able to move forward?

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3
Very often it is because the listing agent is not submitting the proper information up front.
1 vote Thank Flag Link Mon Apr 30, 2012
Good morning Linda:
Thanks for your response. Yes, I have to agree, that is one reason for a Short Sale taking so long. But more often than not, from my perspective, it's the Bank's policies and the lack of manpower ... I believe some agents might be inexperienced as well and not be following up on a timely basis.
Flag Mon Apr 30, 2012
lol... great question guys. one thing to remember is that it's not the banks inventory (yet). it's the seller telling the bank that they can't pay what they owe and asking the bank to take a loss so the seller can give free and clear title.
we work with a lot of short sales and working with the asset managers and banks is frustrating at best. i'm really hoping the changes being made (BOA last month and Fannie and Freddie in June) will help the process along. i have one with BOA that was in about 3 days prior to their 'changes' last month. we sat in 'stalled' position for absolutely no reason (asset manager supervisors were baffled... or so they say). we finally had to cancel the file Friday and re-submit under their new process (tomorrow). we'll see if it's all it's cracked up to be (hoping it is).
in the meantime, keeping the buyer in the deal is a full time job.
i know we are only 2 weeks in after the BOA changes but has anyone seen positive changes with the new BOA process?
1 vote Thank Flag Link Sun Apr 29, 2012
Susan:
Thanks for your response. It will be very interesting to see how things go for smoothness of the transaction in the NEW process. Like you, I've also worked with BOA and it has been extremely frustrating (to say the least) but Flagstar has been even tougher. I understand they (the Banks) are on the losing end and so they hold out as long as they can, but if the seller is no longer making payments and the transaction falls apart (buyers walk away) and Realtors never get paid for all th work they do, and the home ends up in foreclosure, it's questionable who has really lost. Just does not make for a win/win situation at all. Sad, but true. Seeing this alot in the past few years.
Flag Sun Apr 29, 2012
Nope, the word short means when the house is sold the owner will be short the needed funds to pay off the loan so the bank must approve the sale and take a loss. Banks don't like to take a loss so they are not fast to say yes. Sometimes sellers try to sell short when the bank will not even consider allowing it, they try this because they don't know what they are doing and often find a real estate agent that doesn't either or they try in "hopes" the bank will approve it and often the bank just ignores them. There are many reasons a short sale fails and they are never quick. If they were we would call them quick sales.
1 vote Thank Flag Link Sun Apr 29, 2012
Thanks Tim. Totally understand and agree with your post. Thanks for taking the time to respond. --Diana
Flag Sun Apr 29, 2012
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